CUBA: Food Imports Worsen Trade Deficit

By Dalia Acosta Reprint | | Print |

Dalia Acosta

HAVANA, Jun 6 1997 (IPS) - Cuba must increase food production in order to resolve the deficit in the trade balance currently hampering the reactivation of its economy, after the nineties brought with it the worst crisis since the 1959 Revolution.

Last year, Cuba invested 699 million dollars in food on the international market.

Sources in the Ministry of Agriculture said Cuba bought 300,000 tons of rice, 135,000 of beans, 38,000 of powdered milk, vast quantities of fats and other foods from abroad in 1996.

Much of the imported food could be produced in greater quantities within the country, concluded this Ministry in statements given to the local press.

In 1995, a meeting of economists had concluded that “we can not think of reactivating the economy without increasing food production and a achieveing a better use of energy resources allowing us to freeze the present levels of imports.”

Cuba’s minister of economy and planning, Jose Luis Rodriguez, said that prior to the crisis, in 1989, the country was already importing 57 percent of its proteins and 51 percent of calories consumed.

During 1989, the Caribbean country invested a billion dollars in buying food abroad, a figure which fell to 500 million in 1992, one of the worst years for the Cuban economy this decade.

Food, fuel and medicines constituted more than 60 percent of the total Cuban imports in 1996, a spending profile which the experts claim must be radically changed.

Sources in the Centre of Cuban Economic Studies (CEEC) indicated that between 1992 and 1996, Cuba’s purchases abroad hit an average of 2.567 billion dollars, or around 234 dollars per head.

Last year, Cuba registered trade worth 5.661 billion dollars, including 1.966 billion of exports and 3.695 billion of imports.

And the income from exports only covered 70 percent of imports last year.

Cuban economists said if the fundamental basis for recovery from the crisis is to keep increasing exports, Cuba is running the risk of having an “overheated” economy.

Official predictions for this year gave growth of 11.5 percent of imports to 12 percent of exports and a foreign trade deficit of some 1.9 billion dollars.

Experts and authorities agreed the core of the problem was the high levels of imports of goods which do not directly result in economic reactivation or, as in the case of fuel, do so inefficiently.

The Agriculture Ministry asked the producers for an increase in the various agriculture and livestock sectors, like the tubers, vegetables, grains, rice, meat and milk.

At the moment a ministerial commission is travelling the provinces to evaluate the deficiencies in food production and to ask for greater efficiency from the State and private farmers alike.

The authorities are hoping the same level of resourcing, much reduced over recent years, can somehow fund a lift-off in the sector, increasing production and efficiency.

The agricultural sector grew by 30 percent last year with barely eight percent of the fertilizers, 15 percent of the chemical products, half the machinery and two thirds of the fuel used in 1995.

Cuba’s Viceminister of Agriculture Alfredo Gutierrez said the use of pesticides had fallen 60 percent on the last decade, the use of tractors had fallen from 75,000 to 35,000 units and the use of oxen had increased to more than 400,000 animals.

Official sources attributed last year’s sudden jump to efforts to seek more efficient economic management, as a result of profound transformation in s the sector as part of the economic reforms initiated in 1993.

The Ministry of Agriculture plan to reactivate agricultural and livestock production includes the attraction of foreign capital, the creation of basic production units, the allotting of plots of land for production and the opening of markets based on supply and demand.

Up until May, 14 mixed ventures using foreign capital were operating in various branches of the sector, and another 40 were in various phases of negotiation and implementation.

The creation of the basic agricultural production units and the provision of lands for production uses, from 1993 onwards, helped restructure the way the Cuban countryside is held and managed, a plan the experts believe will counteract the inefficiency of the big State companies.

The Cuban report to the Food Summit, held in Rome in November, said these measures led to 42 percent of the State land passing into the hands of co-operativists and individual farmers.

At the end of last year, 67 percent of the farming land was in the hands of the non-State sector.

However, experts and authorities agree the restructuring of property had not yet had the expected result of significantly reducing the level of imports.