Will Cubans Benefit from a Cap on the Price of Rice?

By Glenda Boza Ibarra (El Toque)

HAVANA TIMES – The fact that there is often not even rice on the Cuban table is yet another sign of the worsening economic—and productive—crisis on the island. During other periods of scarcity, this grain had been the only dish for many families.

The magnitude of the crisis is such that even the buffet of a five-star hotel in Varadero can be without rice.

When rationed goods have been scarce or disappeared, rice had always been available in varying amounts. However, the crisis in Cuban rice production—and imports—has reached unprecedented levels. The price per pound has exceeded 300 Cuban pesos on the informal retail market and is sold for 290 pesos in wholesale markets.  (An entire monthly pension for many Cubans can barely buy 5 pounds of rice.  And an average salary 10 to 15 pounds.)

Rice Production Requires Dollars

According to 2019 data from the Ministry of Finance and Prices, the cost of producing a ton of rice in Cuba is approximately $415 USD per ton, which equates to $0.41 USD per kilogram. (The US dollar currently trades at 340 pesos.)

The Finance Ministry’s calculation considers factors such as an average yield of three tons per hectare and the quality of the rice produced in Cuba, which is usually lower than imported rice due to higher moisture content and the presence of broken grains. However, it does not take into account inflation, devaluation, and the sale of supplies in dollars following the 2021 economic reform.

Orlando Linares, president of the Agricultural Group of the Ministry of Agriculture, told Granma that in 2024, yields did not even reach two tons per hectare.

“Rice cultivation is highly technical. It requires a technological package that the country currently does not have. Everything was done practically without inputs.”

In addition to issues with importing fertilizers and herbicides, there is a shortage of fuel to ensure aerial spraying and to operate machinery needed for harvesting and land preparation.

On several occasions, readers and economists have criticized the use of fuel for non-priority activities—such as the seven vehicles used to transport the presidency through the East of the island—and have insisted on the importance of prioritizing allocations for farm production.

Storage facilities such as dryers or silos are also not taken into account. In several rice-producing areas, it is common to see rice drying under the sun in the middle of the street.

“We have to dry it on the road, on the asphalt, using our own means and staying alert to thieves, rain, and even passing vehicles, although we always choose low-traffic areas,” explained a farmer from Vertientes.

Official figures report that while annual consumption is around 700,000 tons, the 2024 harvest barely reached 80,000 tons, covering only 11% of domestic consumption.

Data from the Cuban Observatory of Currencies and Finance indicates that the decline is even more alarming when considering the accumulated harvest reductions over the last five years: 85% for rice and 63% for beans.

This decline is due to multiple factors, including the lack of inputs, the outdated technological package, and the scarcity of energy resources.

Asian Rice vs. Popular Rice

The Cuban government has turned to Asian countries to revive rice production. In January 2025, it was announced that a Vietnamese company had received land in Pinar del Río to cultivate rice for three years.

Two months later, in March 2025, Vietnamese media reported that experimental planting on 16 hectares (ha) had already achieved an average yield of 7.2 tons per hectare.

“It is expected that 1,100 hectares cultivated by the company will yield over 10 tons per hectare in the May harvest, far exceeding the 3 tons per hectare recorded in most Cuban fields that have yet to adopt Vietnamese varieties and techniques.”

The report also mentioned that Vietnamese investment would expand to an additional 400 hectares, followed by further expansion in Pinar del Río.

Recently, Cuba’s Ministry of Foreign Affairs announced that they are also evaluating the suitability of short-cycle Cambodian rice seeds to boost large-scale production on the island.

Meanwhile, the Ministry of Foreign Trade and the UN Food and Agriculture Organization (FAO) are promoting a foreign investment project aiming to increase production by 276,000 tons and expand cultivated land, to potentially cover 86% of national demand and replace $175 million worth of imports. However, so far, this initiative remains only on paper.

“Popular Rice” as an Alternative

Another alternative—perhaps the most practically successful—has been the development of “popular rice.” In 2024, more than 20,000 producers adopted this method, planting rice along rivers, streams, or any water-accumulating areas.

This traditional cultivation method involves flooding rice fields before planting or transplanting. However it requires a constant water supply throughout the growing cycle.

Authorities claim that this reduces the demand for inputs, fuel, and machinery, making it one of the most immediate options for increasing rice production and availability in markets.

However, the reality is more challenging than it seems. In Amancio, south of Las Tunas, farmers plan to cultivate 3,000 hectares of rice, but clearing the land of weeds requires machinery and fuel.

Despite shortages, they have managed to replace fertilizers with biological products, and workforce retention is ensured with breakfast, lunch, wages, and between 15 and 20 sacks of rice per harvest for each worker.

However, limitations in water and fuel resources have affected the ability to implement these systems on a large scale. “There are no combine harvesters to cut the rice, and yields have been low due to problems with water, electricity, fertilizers, drying facilities, and fuel. Additionally, you deliver the harvest, and they don’t pay you right away—sometimes it takes months,” said a farmer from Vertientes.

He explained that he had to give up some land because one of his sons, who used to help him, left the country, and he could no longer pay some of the workers he had hired on time.

“You have to rent transportation, buy resources at inflated prices in the informal market, and listen to government officials urging you to do more. How much more can we do if we don’t have the means to do it?” he said.

State-run agro-industrial companies have also seen their yields decrease due to instability in irrigation systems and machinery, whether due to electricity issues, lack of maintenance, or diesel shortages.

“All our machines have problems with belts and drag mats and they only function thanks to the ingenuity of the workers. It’s not ideal, but it helps us somewhat with harvesting the rice,” said Dariel Alarcon, director of the UEB Grains Company of Amancio, on local television in Las Tunas.

An agronomist from Camagüey said that if machine harvesting is not optimal, part of the harvest is also lost. “Machinery that operates at half capacity, patched together, solves one problem but affects both the quality and quantity of the grain because it cuts inefficiently. As a result, part of the harvest is wasted, and on top of that, yields per hectare are already less than half of what could be expected under optimal conditions,” he explained.

According to his calculations, the development of short-cycle seeds could reduce spending on importing rice for the basic food basket—which is currently 100% imported—but it would not be enough.

“Without investment in agriculture, production cannot increase. Farmers do what they can, but when buying in dollars or at high prices, they barely make any profit. In fact, if it weren’t for the high rice prices, some would be operating at a loss.”

Price Caps Will Not Increase Production

The sight of police escorting a shipment of rice through the streets of Santiago de Cuba might seem like a joke, but it’s real.

The scarcity of the product is so severe that, in recent months, provincial administrations have imposed a price cap on rice, setting the price per pound between 150 and 170 CUP. This has been their way of “combating abusive pricing and addressing public discontent.”

At the beginning of March 2025, the Gaceta de la República published a decree from the Council of Ministers setting the formal market price at 155 CUP.

According to officials, the price was determined by calculating a 30% profit margin over costs and expenses, “in recognition of the approved Agricultural Price Policy and based on a cost analysis that takes into account the informal market exchange rate for inputs.”

Although the press report claims there was a “positive impact” from the price cap on six products, both economists and the general public believe that these measures are insufficient to control prices.

“No matter how often these measures are applied and fail, I don’t understand why they keep repeating them. They already did it with six products that have disappeared from markets and stores, yet they are still sold ‘under the table’ at prices that weren’t capped,” said a reader.

Although in both cases—the six price-capped products in July and rice and beans now—authorities claim they calculated prices with a 30% profit margin over ‘real costs,’ the disappearance of the product suggests that farmers remain unsatisfied with the price.

However, some claim that the state procurement price is not bad (239,000 pesos per ton), but other production-related costs, such as wages for workers, are not factored in.

When the price cap of 155 pesos per pound was imposed in Camagüey, sales points remained closed. The shortage was so severe that authorities were forced to rotate the sale of rice to different areas and limit purchases to five pounds per person.

Meanwhile, in online buying and selling groups, imported rice from Guyana, Brazil, Vietnam, and the United States is being sold for 290 to 350 pesos per pound. In these groups, locally grown rice is sold by the sack at 240 pesos per pound. In online dollar stores, rice is no longer available.

“The inflation spiral is far from being controlled,” warns the Cuban Observatory of Currencies and Finance (OMFi).

“Any inflation control plan, anywhere—and especially in the current context of the Cuban economy—requires measures that boost supply, a component that is almost entirely absent in current policies.”

First published in Spanish by El Toque and translated and posted in English by Havana Times.

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