AZCUBA: Sugar for Growth?

Daisy Valera

HAVANA TIMES — It would seem the issue of Cuba’s sugar industry is caught up in an endless process marked by intermittent stages of silence and controversy. As of the close of November last year, with the start of the 2013-2014 harvest, we appear to be entering a boisterous, propagandistic period.

Officials of course kept quiet in 2010, when the production of the sweetener reached an all-time low. There’s also been no mention of the fact Cuba has had to import sugar from countries like Colombia to cover the island’s minimal internal demand of around 9,000 tons of the product.

Luckily, the catastrophic harvest of 1970, which promised to amass 10 million tons of sugar (when it was known the country’s sugar refineries had an overall processing capacity of only 7.5 million), is a bitter memory that imposes quotas of moderation on official pronouncements.

Though the times of massive mobilizations are apparently behind us, the government has not yet renounced its triumphalist publicity: some days ago, Cuba’s official newspaper Granma trumpeted that the Argeo Martinez sugar mill in Guantanamo had achieved an industrial yield (sugar per cane) of 10.80, surpassing the planned 8.49 and evincing an upward trend.

It also does not seem accidental that Havana’s Ruben Martinez Villena Gallery should be holding a nostalgic exhibition titled Azucar (“sugar”) from January 15 through February, displaying propaganda posters from the 70s and 80s. In the posters, we read such phrases as “Leave no stem on the sugarcane, leave no sugarcane on the stem” or “Sugar for Growth.”

AZCUBA, the Cuban company directly subordinate to the Council of Ministers which replaced the Ministry of Sugar (MINAZ) in 2011, is being called on to lift sugarcane output and raw sugar production off the ground.

To ensure the economic sustainability of the industry, once the country’s locomotive, officials are now laying their bets on its diversification and its potential for energy generation and ethanol production.

Even if it manages to develop such projects successfully, AZCUBA will still be facing significant obstacles.

During the sugar industry re-sizing of 2003, Cuba dismantled or sold as scrap metal half of the 110 mills that were still in operation in the year 2000. Today, there are only 49 in operation, most of them using obsolete equipment and machinery.

The destruction of these mill complexes condemned thousands of workers and farmers, many with decades of experience in the industry, to a permanent “dead time.” Now, re-inserting a great many of these workers (many of whom are currently employed in other sectors) into the industry becomes nearly indispensible.

In addition, Cuba’s current sugarcane yield barely exceeds that of 40 tons per hectare, while the international average is approximately 60 tons per hectare. Given the poor quality of Cuba’s cultivable lands (in 2009, Ministry of Agriculture experts reported that more than 70 % of these lands had low fertility levels), it does not seem that this situation will improve in the short term.

Then there’s the money paid cane growers per pound of raw sugar for export made from their harvests: a mere 2 cents the pound, when the international average is over 16. Such remuneration, needless to say, does not even remotely meet expectations.

The goal set for this year’s harvest is 1.8 million tons of sugar, a figure that would have been a joke 30 years ago (and could well prove unreachable today).

The management of AZCUBA does, at least, appear to understand that the overhaul of a few trucks used to take sugarcane to the mills or the purchase of some harvesters are very shy measures.

AZCUBA, born of Cuba’s recent economic reforms, is a company leaning towards the privatization of the sector, in ways that would have been unthinkable for its predecessor, the Ministry of Sugar. Currently, it is renting out the Cienfuegos’ 5 de septiembre complex to Odebrecht, a Brazilian conglomerate.

If such a trend continues, it may soon make it impossible for the official discourse to continue to refer to the fact that, before 1959, 34 percent of the sugar mills in the country were owned by foreign companies.

Daisy Valera

Daisy Valera:Soil scientist and blogger. I write from Mexico City, where Havana sometimes becomes so small that it disappears. However in others, the Cuban capital is a city so past and present that it steals your breath.

21 thoughts on “AZCUBA: Sugar for Growth?

  • January 24, 2014 at 4:37 pm

    It doesn’t matter as long as the offer grows faster than the demand as is the case. The fact is that sugar as commodity has lost 2/3 of their value since 1959 and that even without all the mismanagement from their leadership it would play a relatively minor role in their economy today.

    Also, I’ve never said that Cuba’s economic failure was caused by the loss value of sugar. Their failure was exclusively caused by the parasitic economical dependency on the eastern block and their collapse.

    What I explicitly said is that the lack of development in the industry was a side effect of said dependency and made things even worse, because everyone else learned to live with their lower margins by improving efficiency and lowering costs, while for Cuba was a BIG, instant shock and with their obsolete technology they were in no condition to react quickly enough, even with their arbitrarily low man-power costs

  • January 24, 2014 at 2:41 pm

    The current glut of sugar on the world market is a recent development of the last 2 years. Prior to that the demand had grown substantially for the past decade, and quite steadily over the past 50 years. Other small producers (Australia, Thailand) were able to increase their productivity and lower their costs by investing in new technology and by carefully managing their cane fields. Cuba failed in both those counts.

    The large growth in sugar production and consumption over the past 50 years is proof that the price of sugar, (which would have affected everybody) is not a key factor in Cuba’s failure.

    In constant dollars, adjusted for inflation, Cuba’s 2008 gross domestic product was 5% of its 1958 GDP 50 years earlier. There is a reason for such a spectacular collapse in national wealth and it has nothing to do with the price of sugar.

  • January 24, 2014 at 1:25 pm

    I just stumbled across this quote confirming your last comment. In a speech on September 28, 1966, Fidel Castro directly denounced scrutiny of the government’s sugar industry policies where economic and financial analysis fell under the suspicion of carrying seeds of disloyalty:
    “A financier, a pure economist, a metaphysician of the Revolution, would have said: “Careful! Don’t lower those rentals by one cent, because financially, because economically, because pesos more, pesos less.” Those persons have a peso sign in the head and want the people also to have a peso sign in the head and in the heart. And if we want a people that get rid of the peso sign in the mind and the heart, then we must also have men who free their thought of the peso sign”
    (Cuba Socialista, No. 62, October 1966).

  • January 24, 2014 at 1:09 pm

    Why are your comments about MY comments and not about the topic? BTW, I am more of a California middle-of-the-road Christ

  • January 24, 2014 at 11:56 am

    Moses, why do all of your comments sound like a Oklahoma right wing christ worshiper wing nut or a Florida Batista Cuban?

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