Sancti Spiritus, Cuba Farmers Tell State: No Pay, No Milk

The province faces a milk shortage.

Debts to ranchers reach 150 million pesos in just three months. They say: “There is no milk because the state company doesn’t pay”.

By 14ymedio

HAVANA TIMES – The debt to milk producers of Sancti Spíritus reached 150 million pesos in just three months. Alberto Cañizares Rodríguez, director of the Dairy Products Company, told this to the newspaper Escambray, which published a report this Monday on the huge amount of non-payments in the province. The director minimizes the issue and states that “from January to July, more than 100 million pesos were paid.” ($1 USD = 350 pesos)

The fault, he sustains, is the 200 million pesos owed in turn to this company “mainly by the business group Comercio Sancti Spíritus, Complejo Lácteo Habana and Lácteo Artemisa.” Cañizares, in addition, complains of being the one who has to suffer the consequences and puts the blame on the ranchers who don’t deliver the milk.

The industry, he says, paid for 27 million liters, seven million of them at the increased price of 70 pesos for “overcompliance,” and not everything agreed was delivered. “They say: ’There is no milk because the Dairy doesn’t pay’, but last year I paid month by month and they stopped giving me the rest of what was contracted, 10 million. They almost wanted to shoot me for owing them for two months, but they didn’t question anyone about their own debt.”

The provincial newspaper has spoken to some of the cooperatives, and the situation leaves no room for doubt. There were 159 productive bases and 1,147 producers in eight municipalities who were owed money. Cabaiguán, Trinidad, Sancti Spíritus and La Sierpe accounted for 62%.

Manolo Emilio Estrada Valdés, from a cooperative in the latter municipality, says that in the second half of last year they were only paid in November. “That caused a lack of motivation, because 80% percent depends on livestock production; sometimes we us three, four liters. They tell you: Today I had to sell the milk to buy a liter of cooking oil’. You talk to them and they respond, but it’s impossible. The cowboy doesn’t understand. What he needs is for you to pay him; if not, he leaves,” Estrada concludes.

The producers of the Ramón Puerta cooperative, in Banao, were owed 800,000 pesos for four months. For the José Martí cooperative of Sancti Spíritus it was even worse, with 1,738,000 pesos owed. The Raúl Gómez cooperative, of Yaguajay, didn’t see a centavo for four months.

The municipal delegates of Agriculture in La Sierpe and Sancti Spíritus recognize the seriousness of the situation and point out that in these cases the producers’ motivation crumble. They only make an effort, logically, when they receive payment. Erit Lezcano, director of the dairy company in Managuaco, has even taken the precaution of resorting – “by strategy” – to revolving credit, but even so it can fail, since the entity did not have money at the end of the year to lend.

“The financial situation of a company may have to pay is not resolved with revolving credit. They give you money initially, but to continue getting it later you have to have a line of credit. And if you have a financing deficit, the bank charges interest, but that creates more debt. You would have to find another line of credit to pay for production,” says Carlos Luna, general manager of the company Obdulio Mortales.

Escambray questions the authorities and directly accuses them of deceiving the producer and public opinion itself. “When milk began to be scarce and to run out in December, Escambray inquired about possible debts; both the Livestock Subdelegation and the management of the Dairy Company stated that they did not exist,” it asserts.

Deibi Casanova Pérez, a specialist in the sector, affirms that these debts were not “covered,” but “there were problems with the money they owed. This was explained to the producers, but at first the Dairy did not speak very clearly to them.

“They did not speak to them clearly: what does that mean, that they lied to them? ” exclaims Escambray. The specialist denies it and says that it was explained, but that the information takes longer to arrive than the rumors.

The president of the National Association of Small Farmers (ANAP) in Sancti Spíritus, Eidy Díaz Fernández, asks the authorities to be as clear as possible, because when there is, as was the case, uncertainty, everything is worse. “They can tell us if it’s 15 days, it’s 15; if it’s 20, 20, but not deceive us to commit to continue delivering until the solution arrives. We must ensure that nothing is owed and seek credibility among the company, the farmers, so that those who do not comply today will, and the justification cannot be non-payment,” she alleges.

Alberto Cañizares Rodríguez, despite the devastating testimonies, continues to take cover and defends himself by attacking. “My national group says that I can’t take the 70 pesos to cover the basic family basket, because they subsidize me only up to 38 pesos, but if I say that I’m not going to give the children that milk, they shoot me. You have to take it, although for each liter of subsidized milk I lose 7 pesos, because to collect it, put it in the industry, prepare it and send it to the town it costs me 45, and in the 70 I lose more than 30. Last year with the blackouts we had a lot of losses. More than 400,000 liters of milk went directly from the field to the pigsty and arrived coagulated,” he says.

The complaints, argues the provincial newspaper, forced an intervention, and “some subsidies” were delivered with which October was paid in December, and November was paid in January. At the beginning of the year, Bandec delivered a credit of 1.2 billion, of which 280 billion is for the first four months and with which January has been paid. But “by bank dictates, with a one-year credit, the previous month cannot be paid, so December, until a week ago, was on standby. February has already gone into default, and March is close behind.”

The director of Finance and Prices explains that the Dairy has debts with the bank, so to approve this year’s credit, the central office must authorize it. “If they manage to recover in those four months, then they would approve another one.”

The authorities claim that they are trying to find solutions at the national level, but the money does not arrive, and, in addition, they have to pay those who over deliver but can’t charge the defaulters, says the director. She complains that they don’t pay the fine and that the only alternative is to go to court, something that they always try to avoid.

In Sancti Spíritus there should be milk, says Escambray, even for medical diets, “a kindness that in other provinces was extinguished,” but the truth is that it ends up going to the informal market, where “the producers get paid instantly and better, since there the liter is quoted at up to 150 pesos and cheese at 600.”

Translated by Regina Anavy for Translating Cuba.

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