Cuba's Agriculture after the New Reforms: Between Stagnation and Sustainable Development

One of the twenty-first century’s main challenges for some Latin American countries will be solving the agrarian problem. Cuba is facing this challenge by implementing an unprecedented reform. In 1993, almost all state agriculture was transformed into self-managed cooperatives. A three-year study of the resulting changes was recently completed with the fruitful collaboration of Hannover University, in Germany, and two scientific centers at the University of Havana.1

The study's aims were to analyze the transformations' socio-economic effects to date and the obstacles they have faced;  to identify the social actors involved;  and to reveal, along with the new cooperatives' potential for solving Cuba's historic agrarian problems, the continuing restraints on realizing that potential. The following text introduces some of this study's results.2

Background

From the 1750s to the 1800s, with the growth of a plantation system, Cuba developed an economic model based on export of primary products. Its imprint is felt even today, not only on the island, but in other Caribbean countries. Tobacco, sugar, coffee, and slaves were, for over 150 years, their main commodities exchanged in the world market. The new model of accumulation that took shape at that stage of the colonial era was both agrarian and semi-industrial.

The plantation economy's basic trait was a chronic shortage of rural labor.  Due to its high cost, free labor was absent, and there was no mass of small owners that could be expropriated. The solution was massive introduction of slaves. Another of the model’s main traits was an increasing need to import food and durable goods. This brought about an historical deficit in foodstuffs. Cuba’s would be an agrarian economy, but not a peasant one.

During its republican stage, Cuba found no economic alternative to these enormous agrarian estates, a bind worsened by injection of United States monopolies and capital. The crux of this legacy, transferred in January 1959 to the victorious Revolution, continued to be the issue of land, combined with a labor force left redundant after the sugar harvest, and dependence on imported foodstuffs and durable goods. Agrarian reforms of 1959 and 1963 consolidated state predominance in exploiting the land and introduced large-scale production patterns which¾mainly to profit from the existing infrastructure¾emphasized sugar. After 1963, and under the axiom "More state property means more socialism," over 70% of the agricultural sector was turned over to the state, and the vast majority of this sector's workers became salaried (Aranda 1968; Valdés 1990).

Significantly, the Revolution’s agrarian reforms, instead of distributing land, turned tenant farmers, sharecroppers, and squatters into owners (Pino 1999). Vast colonial and "neo-colonial" estates were quickly replaced by vast state-owned farms, which of course differed from their predecessors in their social nature (Valdés Paz 1997). Production was organized on a Fordist model and "Its immediate consequence was to expand and strengthen a high-consumption agricultural model in increasingly bigger productive units devoted to mass production under a strong, vertical management regime" (Figueroa 1996, p. 11).  As of 1990, before the new reforms, the average size of state farms devoted to sugar and citrus was about 10,000 hectares,3 while farms devoted to animal production and rice were, on average, over 20,000 and 30,000 hectares, respectively (Nova 1997, p. 36).

These state-owned farms were characterized by massive mechanization, introduction of science and technology, use of chemicals, specialized production, as well as by their excessive size. Production increases under these conditions were achieved by concentrating machinery, equipment, and supplies.  Labor shortages were supplemented by mass mobilizations of urban workers.

Among this system's most significant deficiencies was that increases in production were much lower than expected relative to the technology and the infrastructure.  From 1975 on, the productivity of agriculture, in terms of both land and labor, declined steadily (Nova 1997, p. 40). The inability of state-owned enterprises to generate profits became a heavy burden on the state budget, which subsidized losses.  Agriculture made no leaps toward creating the basis for relative independence in staple foods.

Furthermore, when Cuba joined the socialist international division of labor in 1972, it specialized in producing sugar and citrus fruit, in exchange for cereals and other foodstuffs. By the end of the ‘80s, around 60% of arable land was devoted to export crops, with just over 40% to food production. This left approximately 0.14 hectares per capita of cultivated land for domestic consumption. When Cuba was unable to meet its specialization goals, it became dependent on imports to meet people’s needs. Thus, in the early 1990s, 55% of calories, 50% of proteins, and 90% of all fats consumed in Cuba were imported (Figueras 1994). This dependence has not yet been broken.

With the collapse of East European socialism in 1989, the so-called programa alimentario (food program) was set up to replace food imports with domestic production (Deere 1993). The main objectives were to reduce dependence on food imports, increase self-sufficiency, and guarantee an adequate supply of calories and proteins. In the early 1990s the food program did not essentially modify the basis, structures, or functioning of the agrarian economy’s performance and management. Vertical subordination and centralization of plans and programs were not only kept but expanded, so that the state sector encompassed 83% of the arable land (Figueroa 1996).

However, the food program’s ambitious goals did not materialize. Areas earmarked for cultivation were left idle for want of necessary resources. Official sources admitted that, after 1992, inputs fell to one-fifth of previous levels. Mass mobilizations were to compensate for acute rural labor shortages. Meanwhile, deficiencies in distributing harvests arose.  The media revealed that only a third of harvests was reaching the retail network, while another third rotted in the fields, and a third went to the black market. This made agriculture the economy's most heavily subsidized sector, so that "With the Food Program, the cornerstone of the state’s economic strategy in the sphere of domestic economy failed" (Mesa-Lago 1995, p. 62).

Thefood program's failure led to a shortage of agricultural produce that could not be totally cushioned by imports. Supplies ensured by the ration card became minimal. People were forced to resort to the black market, which grew as quickly as did Cubans’ discontent (Burchardt 1995; González 1995). The worsening situation demanded a structural change in agriculture. The moment for what some experts have called a "new agrarian reform" had arrived.

Cooperativism Without Cooperatives

A new chapter in the island's agrarian history began September 15, 1993. A proposal made by the Political Bureau of the Communist Party, which later became a law, initiated a restructuring of the framework for Cuba's agriculture. Basic Units of Cooperative Production (UBPCs, after their name in Spanish) were created within the 735 state-owned sugar-cane farms and the 835 other agricultural enterprises.

Main elements of decree-law No. 142 of September 1993 turned a fundamental portion of state farm land over in free usufruct on long-term leases to workers’ collectives, which were also granted the basic means of production required for them to take on their responsibilities.  Members could autonomously share gains and choose their leaders, but must negotiate production plans with the state farm enterprise.  The basic aims of the UBPCs were: to attain substantial increases in agricultural production;  to lower costs, attract workers to the agricultural sector;  help stabilize the labor force,  improve rural living standards, facilitate solutions to problems like housing and access to social services, and move toward eliminating agricultural subsidies.

UBPCs have rendered possible a meaningful reduction in size of state-owned farms devoted to agriculture. Their average size varies from 800 to 1000 hectares. This, together with other forms of land tenure, allowed a mixed economy to emerge in the island’s rural sector. The state sector has kept only 33% of the cultivated land, whereas "42% of the land, 90% of the sugar-cane production, and 60% of production other than sugar-cane” are concentrated in the UBPCs (Valdés Paz 1997, p. 185).4

UBPC members organize their work, decide how the available equipment will be used, make use of subsistence areas, and sell surplus production once contracts with the state have been fulfilled. Production plans are negotiated with the state-owned enterprises within which the UBPCs operate, and they buy and sell their contracted products at prices set by the state.  Some analysts assert that, with these transformations, "…the huge sector of state-owned farms was, in fact, privatized" (Deere 1994, p. 3). However, the state reserved the right to "…dissolve any UBPC…according to economic or social interests determined by the Government" (Gaceta Oficial 1993).

Nonetheless, the UBPCs have contributed to democratizing the organizational structures of agricultural production.  Each UBPC administrative board has to be periodically ratified by elections, in which 75% of members participate. Many analysts think these elections may make it possible to overcome the inefficiencies that have burdened Cuban agriculture. They are certainly a response to the limited resources currently available to agriculture, and they contribute to cutting losses in that sector.

Agricultural markets were set up throughout the country late in 1994 as a logical follow-up to this decentralization (Carriazo 1994). These markets opened new opportunities for UBPCs, which could use them to sell surpluses not included in agreements with state-owned enterprises.  More recently, they were authorized to sell an important portion of their main crops in this way, thereby increasing their economic earnings.

Still, dualities in the very identity of the UBPCs¾halfway between state entities and true cooperatives, between commercial and production units¾have been reflected in their performance. More than seven years after their creation, their overall profits are still inadequate.  It is estimated, however, that from 1994 to 1999, UBPCs devoted to sugar-cane and other crops received on average 260 million Cuban pesos a year in state assistance, whereas by the year 2000 that amount had been reduced to approximately 50 million (Millares 1999). This is encouraging.

Studies by several multidisciplinary researchers (EER 1996; 1998) show that the varied obstacles to transformations in Cuba's agriculture can be divided into three main dimensions: transitional, sociocultural, and structural.

Transitional obstacles are those due to changing from mechanized production and management to a labor-intensive and self-managed mode of production. This requires a consolidation and accumulation of experience that may take years.  Among others, such obstacles presently include:  lack of managerial know-how;  slowness in assimilating new technologies;  introduction of labor-intensive techniques;  institutionalizing neworganizational plans;  and the improvement and stabilization of administrative boards. Yet experience to date indicates that many of these limitations are being overcome and some general lessons are being learned.

Sociocultural obstacles reside in the behavior patterns of UBPC actors. These cooperatives stemmed from a government directive from above, not from organic and evolutionary developments at the base. The combination of "from above" and "from below" elements is reflected in the slow change of behavior on the part of participants trying to develop the processes that the new entities require.

These sociocultural circumstances fostered a widespread paternalism, not fully eliminated by state management, since it does not yet acknowledge the autonomy indispensable to these cooperatives. The compliant habits of UBPC administrative boards in accepting state control and interference are undeniable. It has been emphasized, with good reason, that "one of the most serious problems has been the impossibility of swiftly changing the mentality of the parties involved in the functioning of the UBPCs¾their producer-members as well as state officials. The latter do not easily renounce prerogatives and functions bestowed upon them by the previous administrative organization, and the former do not feel they own what they produce" (Carranza, Gutiérrez, Monreal, 1995, p. 46).

As former specialized and salaried workers, who participated in the division of labor, new UBPC members lacked not only a culture of self-management, but also the time needed to become capable of adapting to the methods of production and to the intensity of work required by cooperative organization. Many UBPC members still perceive no relation between their personal expectations and the cooperative’s economic results.  Others think it would be better to continue being salaried workers or small independent producers.  Economic consciousness and rationality are frequently absent. In other words, cooperative members often continue to feel they are salaried workers instead of true owners of their production. The island’s high urbanization, the countryside's less attractive sociocultural conditions, and the lower prestige of agricultural work also conspire against stability in the UBPC labor force.

Structural obstacles to UBPC functioning are presented by the lack, at middle and macroeconomic levels, of meaningful change in the roles of state institutions (Rodríguez 1999). In the state's transformation from main producing agent and central manager into regulator of economic processes, changes in the agrarian sector have so far been formal rather than real. The state's direct or indirect control over production, purchases, marketing, and allocation of inputs is excessive;  it has maintained a monopoly in, or at least dominance over, these activities.

The state buys UBPC products at low prices, but sells production inputs and services at high prices. It is now evident that these mechanisms hinder productivity (González 1998). This disproportion undermines one of the UBPCs’ aims from their inception—to stimulate work thus increasing productivity.  No connection between productivity and income can be made, due to the state’s monopoly over prices.  Absent material incentives, there is no interest in increasing production.         

These structural hindrances to UBPC operation have been moderated by measures strengthening the infrastructure and means of transportation, thus facilitating the cooperatives’ access to agricultural markets. The authorization of UBPCs to buy from independent producers and from consumption and services cooperatives (CSAs) has opened new sources of income through marketing, while pushing parasitic middlemen out of the marketplace.

The system for allocating inputs is another structural hindrance to UBPCs.  Several observers have pointed to the absence of deregulated markets for intermediate industrial goods and capital goods, and the state’s virtual monopoly regarding supplies (Bu Wong 1996). Broad circles of experts and academic gatherings have acknowledged that this resource allocation process is not consistent with the variety in forms of cultivation, with the proliferation of economic entities, and with the autonomy that, at least according to government laws and regulations, has been granted to UBPCs.

A final factor among the structural obstacles to UBPCs has to do with the lack of representation for their members’ personal interests. While cooperative members own the means of production (except the land), they are organized as salaried worker-members of the Agricultural and Forestry Workers' Union. At the same time they come under the Ministries of Agriculture and Sugar. Being at once co-op members, owners, and proletarians subordinated to state institutions¾yet lacking formal associations representing them as independent producers¾they have no way to express independently their concrete interests.

Cuban Cooperatives: The Basis for a Sustainable and Sustained Development

The transformations in the agricultural sector, and the type of mixed economy that seems to be emerging, have not yet adequately responded to Cuban agriculture's historical problem of labor shortages and dependence on imports to feed the people. Yet given the profound economic crisis in which the new cooperatives were created, and in which they have had to function, the stabilization and partial achievements of the UBPCs over almost a decade are notable. To consolidate this success and make it irreversible is, in our opinion, the main challenge facing Cuban society.

One possible path lies in establishing more flexible economic mechanisms. Pricing and supply systems should tend progressively toward supply-demand relations. Coupled with this, the rationing of food products could be gradually reduced, and subsidies replaced by direct assistance to lower-income sectors. Were current mechanisms for allocating technical and material supplies to be replaced by direct purchases from a retail network, each UBPC could itself determine which specific supplies it needs. Letting administrative control give way to the market, and attaining a market-based exchange rate in the medium term, seem to be the paths UBPCs should follow in the near future.

High prices remain a critical issue in agricultural markets. Experts hold that these prices can be lowered in the medium term only if supply is expanded.  With their enormous productive capacity, UBPCs could play an extraordinary role here (Nova 1996). Once the UPBCs' problems with low efficiency and productivity are resolved, their sales in agricultural markets could also increase, allowing solution of their current problems with deficits and profitability.

Another sensitive issue burdening UBPCs is their degree of entrepreneurial autonomy. New possibilities in this realm include being able to decide to cooperate with external entities. All units that accumulate funds should also be authorized to invest them. Results of some attempts at self-management based on free usufruct of land have not been encouraging, as in the Yugoslav case (Brus, Laski 1989; Burchardt 1996). On the other hand, Chinese and Vietnamese experiments with up to 50-year usufruct contracts for state-owned land, with the right to short-term leases and to transfer via inheritance, have helped solve food problems in those two countries.

In light of these positive and negative socialist experiences with land use, it seems useful to grant UBPCs the right to decide how their land will be used. Cuba's Agricultural Production Cooperatives (CPAs, after their name in Spanish), first formed in 1976 when groups of private producers pooled their means of production (including land), could be the model for the establishing such autonomy.  The UBPCs' political autonomy is rarely debated, but their self-management and democratic functioning have, in my view, been decisive in their relative success. The cooperative movement ceases to function when collective owners lack autonomy and when these same owners¾on an equal footing among themselves¾find that their democratic participation in management is restricted. It seems advisable that the state be less interventionist, that UBPCs enjoy broader and more transparent legal assurances, and that spaces to create their own more diversified organizational structures be opened. This would foster a public culture supporting cooperativism. The key is balance between the cooperatives’ expectations and their potential. Thus, overbearing guidance would obstruct their consolidation and delay their economic and social self-assertion;  yet, on the other side, excessive autonomy would lead to disorder and would undermine the principles of the cooperative movement.

In balancing the latent conflicts generated by the new cooperative arrangements, between producers' private interests and their responsibilities to society, economic efficiency must not be the only criterion emphasized. One must also take into account the political goal of spreading "…self-management as an alternative path for socialization" (Valdés Paz 1997, p. 203).

Nor should one forget that UBPCs function within local and regional frameworks. They thus need to achieve a more rational scale of production, diversification of crops, creation of networks for direct local sales, and the authorization of services linking cooperatives to other local enterprises¾all of which would facilitate their integration into the policies and strategies of municipal governments.  There would then be a synergy between the UBPCs and local community development. The resulting new local economies could be the bases not only of sustainable and sustained development, but also of a new socialization within Cuban society. An immediate positive effect would be to strengthen the social and political legitimacy of the Cuban regime (Burchardt 1999; Dilla 1996).

The cooperative process engendered by UBPCs could, then, in turn engender other organizational forms within the framework of the entrepreneurial reform already underway. However they are ultimately characterized, these changes in economic management will leave their mark on the island’s political and social fabric. Promoting cooperatives is a genuine option in transforming enterprises that seek real autonomy, increased productivity, and social commitment. An effective Cuban cooperative movement would foster a more just social distribution and  democratization of the economy and society.

There are other advantages to successful development of agricultural cooperatives. First, their guarantee of a stable food supply at prices the majority of Cubans can afford, would have positive psychological effects on consumers. At the same time, higher salaries and better working conditions in agriculture would attract the unemployed, obviously with dynamic and direct impacts at local and regional levels. Expanding cooperative forms, extending decentralization, and creating new communities of small farmers, would all tend to repopulate the countryside and halt the unwanted migration to the cities (Valdés Paz 1997).

Thanks to the creation of the UBPCs, a collective and self-managed economy has been extended to a large section of the population.  UBCP members constitute a little over 10% of the employed labor force, and UBPCs as a whole affect over one-fourth of the country’s inhabitants. If this sector prospers and is more fully integrated, it would turn into an influential social group that could not be ignored. Consolidation of such a large group directly engaged in material production could block imposition of specific political interests by influential minorities, and would tend to balance relations between rural and urban areas (Burchardt 1999).

To summarize, the path laid down by recent changes in the Cuban agricultural sector, and the changes coming in a foreseeable future, reinforce the claim that:

If agricultural production for domestic consumption and export are not revived and made profitable, it will be impossible to speak about overcoming the economic crisis or about restoring a healthy domestic financial situation… This reform is basically aimed at diversifying economic forms of production and productive agents, at altering the scale of productive entities, at introducing and expanding a low-input and labor-intensive agriculture, at opening the market, and at generating new incentives capable of stabilizing and attracting the necessary work force for this sector. Financial and participatory autonomy and self-management are key to the rationalization and economic viability of Cuban agriculture. This is definitely the preeminent approach to solving the two main difficulties that afflict the country: the food problem and the shortage of hard currency (Figueroa 1996, pp. 18-19).

Scholars studying Cuban reality call the transformations in agriculture Cuba's "Third Agrarian Reform."5  But while the "mixed economy" emerging in types and forms of land tenure and cultivation in Cuba evoke such expansive phrases, there are also unavoidable questions.  Among these are the state’s direct and indirect control over this sector, and the lack of a clear  institutionalization that legally validates the transformations.  There have been no transparent regulations for land usufruct, for ownership of specialized crops (tobacco, coffee, cocoa, etc.), or for making the implemented measures irreversible.            

No analysis of problems facing Cuban agriculture and the UBPCs can ignore the perils of deterioration of Cuba's agrarian environment. Of the island’s 14 provinces, 11 show some symptoms of desertification; 14% of the soil contains too much sodium;  the soil in more than 1.5 million hectares is arid, semi-arid, or sub-humid and dry;  29% is affected by erosion;  37% is inadequately drained;  41% has low fertility, and 64% lacks sufficient organic matter. Undesirable brush covers more than 1.3 million hectares (Díaz 1997).  A sustainable agrarian economy cannot ignore these grave ecological problems.

A radical reorientation is needed, then, if the current potential of the island’s agrarian policy is to be realized.  Since we now know that Cuban cooperatives are viable, the challenge is above all one of political will. Whoever desires for twenty-first-century Cuba a link between economic efficiency and a system which favors humanity, society, and the environment¾in ownership relations defined by participatory co-management¾must promote the so-called "Third Agrarian Reform" and render it irreversible.

Hannover, April 2000

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Notes

1. Participating institutions were the History Department at Hannover University, which has a long tradition of extensive cooperation with African and Latin American countries; and the University of Havana's Rural Studies Team (EER) and its Center for Studies of the Cuban Economy (CEEC).

2. The article reflects results of the research project "The Transformation of Cuban Agriculture Since 1993," headed by the author, sponsored by the Volkswagen Foundation, and presented at the meeting of the Latin American Studies Association (LASA) in Miami, Florida, March 2000.

3. 1 hectare equals approximately 2.47 acres.

4. Percentages of total land under cultivation, according to the various kinds of tenants on the land, are:  UBPCs in sugar cane:  22%;  UBPCs in other crops: 20%;  Agricultural cooperatives (CPAs):  10%;  State-owned agricultural enterprises: 27%;  People's Power: 2%;  Farms run by the military:  4%;  Credit and Service Cooperatives (CCSs):  11%;  Private producers and new producers: 4%  (Colectivo de autores, 1995, pp. 56-57). 

5. The first agrarian reform consisted of the measures taken in 1959-1963, at first creating cooperatives and then consolidating agricultural production in state farms;  the second was in 1977, creating the agricultural production cooperatives (CPAs), and the third was of course the law of 1993 creating the UBPCs.