Cuban agriculture ripe for reform

HAVANA, Jan 31 (Reuters) Emma bought a bunch of five plantains and two tomatoes for herself, and a white flower for her saint.

''Nothing is cheap here,'' the retiree said as she looked at unaffordable tropical fruit, vegetables and pork at a Havana farmers market.

In Cuba, where the state controls 90 per cent of the economy and the average wage is 367 pesos a month plus full benefits, residents are complaining bitterly about food prices.

As the country enters a period of transition due to Cuban leader Fidel Castro's illness, authorities are well aware they must quickly reverse a food production decline in the last two years that has caused many produce prices to double.

Acting President Raul Castro, who temporarily took over the communist government from his brother six months ago, has put food supplies at the top of his agenda.

At a session of Cuba's legislature in December, he criticized the state bureaucracy for arrears in payments to private farmers who provide 60 per cent of Cuba's produce and called for economists to study the food supply problem.

Cuba watcher say Cubans will put up with almost anything except an empty stomach.

A crisis after the collapse of the Soviet Union in 1991 and the loss of billions of dollars in subsidies from Moscow have left many of them haunted by memories of hunger.

Cubans have had a ration book for subsidized food since 1962.

But they complain that today's monthly ration of 10 eggs, a few pounds of sugar, rice and beans, a bit of meat or fish along with some cooking oil and a daily bread roll, is barely enough for a week.

Cuba cannot feed its population, and food imports have doubled to almost 2 billion dollars in two years including grains, chicken, beans and powdered milk bought from its longtime ideological enemy the United States under an exception to US trade sanctions.

'DIABOLICAL CHAIN' One third of Cuba's agricultural land is cultivated by worker cooperatives and one third by private cooperatives and small farmers, though the state usually dictates what crops they should grow and buys most output at fixed prices.

Farmers have to fulfill production quotas for the state before they can sell their surplus to farmers markets through state supply centers.

''I'm not sure who, but someone in this diabolical chain from farmer to market is taking my money every month so I can barely eat,'' snapped an elderly Olga Machado at a market just blocks from Havana's Revolution Square.

A head of garlic was selling for 5 pesos, a pound of tomatoes for 6 pesos and pork for 35 pesos a pound, or more than three day's average pay.

There was no beef or milk for sale. These are rationed for children, who are entitled to two pints (litres) of milk a day through age 7, and the disabled, who pay next to nothing for meat when it is available.

Experts said the lack of incentive in the prices paid by the state is a major hurdle to raising output.

''How can a farmer produce 100 liters of milk for 1 dollars? He tells the state to get lost and produce the milk itself,'' said a European agronomist working in Cuba for a nongovernmental organization. ''In fact, most of the milk for the children is imported in powder.'' State television commentator Ariel Terrero recently said produce production fell by 20 per cent in 2005 and 10 per cent last year.

''Really, agriculture is in the dirt,'' he said.

Since Raul Castro began running the government, measures have been taken to pay farmers on time, improve the collection of produce before it rots in the fields and increase what the state pays for some products, Terrero said.

SHIFTING THE BLAME Cuba's agricultural problems are not new, but the focus on bureaucratic inefficiency is.

Where Fidel Castro might have blamed high food prices on middlemen and accused them of getting rich at the expense of the state, his brother blamed the state produce agency.

Raul Castro told urban farmers this month that, provided their output was high and prices reasonable, it did not matter how much they earned.

''That is a very important change in focus. Until now the producers had been blamed,'' said the European agronomist.

He said small private production in urban orchards, a project promoted by Raul Castro a decade ago, had succeeded in raising output, besides paying wages four times above average.

But he was skeptical that the same model could be applied to all Cuba's agriculture.

Cuban-American economist Carmelo Mesa-Lago, a professor emeritus at the University of Pittsburgh, said tweaking the state agriculture system and increasing prices paid farmers are cosmetic moves, as Cuban agriculture ''is still under state control and there is a serious lack of incentives.'' Mesa-Lago advocates capitalism to solve the problem, but he believes freeing cooperatives to decide what to grow and how much to charge, as is the practice in China, would be a step forward.

REUTERS SY RK0900