AGRICULTURE-CUBA: ‘Mini-Harvest’ Bolsters Sugar Ministry Projections

By Patricia Grogg Reprint | | Print |

Patricia Grogg

HAVANA, Dec 11 2003 (IPS) - After a dismally low 2002-2003 harvest that ended in June, Cuba’s Sugar Ministry was optimistic this week at the start of the traditional December ”mini-harvest”.

The Dec. 10 to 31 harvest, the second harvest since Cuba carried out a profound restructuring of its sugar industry, one of the pillars of the economy, is expected to have a high yield.

Sugar Ministry officials have already predicted that output in the 2003-2004 season – which the December ”mini-harvest” kicks off – will be higher than the 2002-2003 output, although they did not confirm unofficial reports that the yield stood at just 2.1 to 2.2 million tons.

”We aren’t infallible,” a sugar industry official told journalists, pointing out that it was a huge challenge to harvest the sugar this year with limited resources amidst the complex transformation of the sugar industry that began in early 2002.

Only 23 sugar mills will operate during the ”zafra chica” or mini-harvest. The rest of the 70 mills left after the restructuring process – out of a previous total of 156 – will operate from January to April.

The projections of a strong mini-harvest are based on the fact that the amount of sugar cane planted per hectare is 21 percent higher than during the last harvest.

In addition, the necessary reparations of machinery were almost complete several days prior to the start of the mini-harvest.

Sugar industry officials said one of the main objectives of the 2003-2004 harvest is to cut production costs to 3.5 or four cents a pound, as global prices currently stand at around six cents a pound.

A one-cent difference in cost can lead to the loss of millions of dollars, Vice-President Carlos Lage pointed out earlier this month.

The restructuring of the sugar industry was made necessary by the low international price of sugar. Cuba now only plants sugar cane on the best land, and only the sugar mills with the top performance were left in operation.

In addition to the 70 sugar mills that are still operating, there are 14 devoted to the production of sugar industry by-products, which are aimed at incorporating added value to the industry’s exports.

Only 38 percent of the land under the jurisdiction of the Sugar Ministry is still planted in sugar cane, and the remaining 62 percent is now dedicated to the cultivation of vegetables and lumber plantations.

The Sugar Ministry hopes the restructuring will save between 40 and 60 percent of the expense involved in maintaining the original 156 sugar mills.

The Sugar Ministry has set for itself a ceiling of four million tons of sugar a year.

A document explaining the need for the drastic overhauling of the sector stated that producing sugar at a sustainable cost requires yields of at least 54 tons per hectare.

Juan Triana, director of the governmental Centre of Studies of the Cuban Economy (CEEC), said ”poor yield per hectare” has been one of the main obstacles to achieving higher production levels in the sugar industry, which accounts for 40 percent of Cuba’s exports.

”The highest yield was obtained in 1989, when production climbed to 64.1 tons per hectare. But since 1992, sugar cane production has not surpassed 40 tons per hectare,” Triana stated in a report on economic performance in the first half of 2003.

Cuban authorities believe that with the current installations and more cost-effective production, it will be possible to meet domestic demand – which amounts to 700,000 tons of sugar a year – as well as the country’s international commitments in the 2003-2004 season.

The 2002-2003 harvest fell short in covering domestic demand, and Cuba was forced to import an unspecified amount of sugar from Brazil and Colombia.

The government’s strategy for the sugar industry is also focused on strengthening the sugar by-products sector, which includes the use of sugar cane waste products to generate electricity, the production of fine liquors that sell well in Europe, and the production of products like animal feed, citric acids, and glues.

Diversification of the sugar industry is considered the most feasible short-term strategy for getting around the slump in the international price of sugar, which has been overtaken by tourism as the leading foreign exchange-earner in this socialist island nation.

Expatriate remittances are the other major source of hard currency.

Analysts say the low international prices and the current global stocks of 63 million tons of sugar have put the sugar industry in an extremely complex situation.

To that is added the protectionist practices of industrialised countries, which subsidise inefficient production of sugar beets, and which use import quotas.

”Losing a market is terrible for any producer nation, and that makes the system a tool of political pressure,” said an expert who cited the example of the United States.

The United States, one of the world’s biggest importers of sugar, limits its imports by setting quotas, from which Cuba has been excluded since the 1960s.

For the 2003-2004 sugar-marketing year – which runs from October to September – Washington has set an import quota of 1.117 million tons of raw sugar from the rest of the world, including 126,000 tons from Central America.