Cuba’s Bitter-Sweet Sugar Harvest

Fernando Ravsberg*

Sugarcane cutters. Photo: Raquel Pérez Díaz

HAVANA TIMES —Today, Cuba’s sugar industry has the same production levels it did at the beginning of the twentieth century and, during the last harvest, even produced less than planned. That said, it is also true that after reaching rock-bottom, over the past five years it has experienced an average growth of 13%.

The sugar crisis began in the 1990s, when sugar prices dropped below Cuban production costs and the government decided to shut down most refineries and to use sugarcane fields to grow other crops, relocating workers to other sectors.

“The dismantling of the industry has come at a high cost in terms of personnel. Many left to work in other sectors. Now, we’ve had to get some of them back and train new people,” Luis Galvez, director of the Sugar Research Institute, tells us.

Liobel Perez, PR chief for Azcuba, adds that this is one of the reasons why four sugar refineries are in critical condition. Those refineries were responsible for “70% of the sugar that stopped being produced.”

That, however, is not the only reason. The start-up of operations at 11 other refineries was also delayed because import companies were unable to secure the replacement pieces needed to begin repairs on time. There is very little time for such repairs.

Sugar production has grown consistently over the past five years. Photo: Raquel Perez Diaz

“You plan your harvest and, when the rains start, you have to stop, because that makes production inefficient,” Liobel Perez insists, adding that “for us, it is better to fulfill the plan by maintaining efficiency than to meet the goal at the cost of financial losses.”

This is the complaint heard from many State companies forced to purchase supplies through extremely slow and inefficient State import companies, which also employ many corrupt officials who are more interested in securing illegal commissions than in the wellbeing of these companies.

Another problem faced by the sugar industry is financing. For 2 years, foreign partners have been looking for credit to retrofit a refinery, but banks still hesitate out of fear of multi-million fines from the US.

There is however also an “internal blockade” in Cuba, brought about by the far-too-rigid norms of the island’s current economic model. Galvez emphasizes that “if we had a bit more flexibility to approach the markets that prove convenient for us, this would help us a lot.”

To make matters more complex, experts explain that producing sugar alone is not profitable today, forcing Cuba’s sugar industry to also produce alcohols, bioenergy and cattle feed.

Sugar prices forced the government to shut down dozens of refineries. Production plummeted and has not managed to recover. Photo: Raquel Pérez Díaz

The head of the Sugar Research Institute explains that “combining the production of sugar with that of biomass and alcohols does not require the use of larger plots of land, because we use the lower-quality juices to ferment alcohol.”

The first energy-producing refinery with foreign investment is a “British joint venture bio-electric Company in Ciego de Avila. This entails an increase in cane production in the region, required to produce enough biomass.”

The production of biofuels is a pending enterprise. Experts are very careful in their replies on this point: “We are producers. Sector policies are defined by other entities. But, if they were to tell us we have to produce biofuels, we’re ready for that.”

It is a delicate issue. Fidel Castro criticized bio-fuels, declaring they would make the price of food skyrocket. Though time ultimately proved him right, the result is that Cuba must pay more for imported food products without the benefits afforded from selling such fuels.

This week, it was announced that new norms that would afford State companies greater autonomy would be implemented in 2017, meaning these companies will remain tied hand and foot for another 18 months. Put in Marxist terms, Cuba’s current relations of production continue to stifle its productive forces.
(*) Visit the website of Fernando Ravsberg.

2 thoughts on “Cuba’s Bitter-Sweet Sugar Harvest

  • “government decided to shut down most refineries and to use sugarcane fields to grow other crops” That would be Marabu.
    ” import companies were unable to secure the replacement pieces needed to begin repairs on time.” That would require not only advance planning but implementation of said plan.
    ” extremely slow and inefficient State import companies” Holding state agencies accountable requires investigations which are not initiated unless failures are reported, which never seems to happen in the official media.
    ” forcing Cuba’s sugar industry to also produce alcohols, bioenergy and cattle feed.” Use of biomass, left over cane from juice extraction, into a fuel or feed is called efficient use of one’s resources. Why sell a basic resource like sugar if there is demand for a value added product such as alcohol, candy and preserved fruit?

    Just thinking out loud here.

  • Another example of why these Central Control and Command government business ventures don’t work. Having the Government bureaucrats run business directly has never worked particularly well. Taxes and efficient regulation can give the state all the control it needs while maintaining incentive and productivity. Cuba can’t move away from the old failed Soviet Union model fast enough.

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