If the Model Isn’t Working, What Hope Is There for the Copy? / Dimas Castellanos
In the second half of the 18th century Creole capabilities along with the effects of the English occupation of Havana and the Haitian revolution created favorable conditions for turning Cuba into a sugar powerhouse. Land owners understood the importance of rapidly developing the island’s agriculture before Haiti could recover. It was necessary to look to the neighboring island not only with compassion, said Francisco de Arango y Parreño, but also through political eyes. As a result Cuba became the main producer and exporter of sugar in the world.
Sugar production, which in 1860 was 447,000 tons, had reached 1,400,000 by 1895. In 1919 it exceeded 4,000,000. In 1925 it reached 5,300,000; in 1952 it was 7,200,000. In 1970, after a colossal effort that disrupted the entire Cuban economy, 8,500,000 tons were produced. After that, it began to decrease to the point that in 2001 it was no more than 3,500,000, a figure lower than that of 1919.
To reverse the decline General Ulises Rosales del Toro was appointed to head the Ministry of Sugar (MINAZ). The Sugar Industry Restructuring initiative and the Álvaro Reynoso Project were also implemented. The goal of the former was to achieve 11% output (to extract 11 tons of sugar for every 100 tons of sugar cane); the goal of the latter was to produce 54 tons of cane per hectare (according to the UN’s Food and Agriculture Organization the world average was 63 tons).
The results of both projects led to 2.2 million tons being produced in 2002, 2.1 million in 2003, 2.52 in 2004 and 1.3 million in 2005 (a 40% decrease from the previous year). Results for 2006 and 2007 were similar to 2005. 2009 saw a slight increase to 1.4 million tons (the same as in 1895). The figures hit a low point in 2010 when only 1.1 million tons were produced. The annual average over ten years has barely topped 1.8 million tons. The harvest in 2011 remained below 1.3 million tons.
In response to its failures, MINAZ was replaced by the state sugar monopoly AZCUBA. With the two major factors that led to significantly reduced production on everyone’s minds, the organization made sure to plant enough cane and at the outset managed to secure almost all the necessary resources it had contracted for the 2012 harvest. Nevertheless, it was still only able to fulfill a target of 1,450,000 tons, and even then it did not meet its target date. Finally, in December 2012 — the beginning of the current harvest — AZCUBA decided to pool its accumulated knowledge and proposed a production quota of 1.7 million tons of sugar (20% higher than the previous harvest). It also announced that a majority of its factories would close before May to avoid the negative effects from that month’s heat and rain, factors which reduce the quality of sugarcane.
Difficulties quickly mounted. By the beginning of February there was a production delay of 7.8%. By the middle of March the state-run press noted that most of the thirteen sugar producing provinces would have to continue refining operations past the target date in order to be able to produce 1.7 million tons. By the end of March production delays had reached 18%. At the beginning of April the country was refining at 65% of its normal capacity due to a shortage of sugarcane. Cienfuegos and Artemisa provinces have reached approximately 90% of their goals. Matanzas has a shortfall of 30,000 tons while Villa Clara, Santiago de Cuba, Holguín, Las Tunas, Granma and Mayabeque are milling at 60% of normal capacity. At the end of May it was discovered that Camagüey, one of the provinces that had hoped to fulfill its quota, was lagging behind. Now, in late June, the end of the current harvest has still not been announced.
Results from the Uruguay central sugar refinery in Sancti Spiritus province, which for the last six years has fulfilled its technical economic quota, produced 8,000 tons more than the previous year and achieved an 11.95% rate of gross economic output, the highest in the country.
In summation, a change of management, the Sugar Industry Restructuring initiative, the Álvaro Reynoso Project, the closure of some one-hundred sugar factories, the reallocation of a large percentage of fields reserved for sugar cultivation to other crops, the replacement of MINAZ with AZCUBA and a varied package of economic and structural measures have not been sufficient to raise the per-hectare production of sugarcane or planned industrial output.
The 2013 harvest suffers from the same problems as those that preceded it: late starts, sugarcane shortages, low agricultural and industrial output, transportation problems, inadequate maintenance, industry-wide breakdowns, poor repairs to agricultural equipment, aging raw material, lack of spare parts, poorly trained personnel, administrative incompetence and high per-ton production costs, among other factors.
Although twenty years is nothing according to the popular tango anthem by Carlos Gardel and Alfredo Lepera*, in economic terms it is long enough to know it is time to get rid the current model. Whether discussing the obsolete or the updated version, it simply does not and cannot work. This is because economic issues remain subordinate to ideology. State ownership of property predominates and the system of economic planning has no relationship to reality, having been copied from the Soviet model. The situation is similar to that of Cuba at the end of the 18th century when solutions imposed by Spain were no longer appropriate given the changes that had occurred on the island. Francisco de Arango y Parreño summed it up nicely when he said, “If the model no longer works, what hope is there for the copy?”
Havana, June 3, 2013
1 Ponte Domingo, Francisco J. Arango y Parreño; estadista colonial cubano, Edición del Centenario, Havana, 1937, p. 27.
*Translator’s note: A reference to a line from Volver, a popular 1934 tango by Argentinian singer and composer Carlos Gardel and lyricist Alfredo Lepera.
Published June 17 in Diario de Cuba