Cuba’s Forced Contracting System for Farm Production
Instead of addressing the direct causes of the farm sector’s low productivity, the authorities continue to promote centralized structures.
HAVANA TIMES – The crisis in Cuba is structural and widespread. Perhaps the best example is the diet of Cubans. The country imports almost 80% of the food it needs, making the issues in agriculture even more relevant.
Cuban economists have pointed out that the fundamental causes of the farm sector crisis lie in the land ownership system, the lack of investment and supplies, and the existence of a distorted market under state control.
However, instead of addressing the direct causes of the agricultural sector’s low productivity, the island’s authorities continue to promote centralized structures and the state’s role as a market regulator and as a manager of individual producers’ labor capacities.
Evidence of this is Resolution 275/2024 from the Ministry of Agriculture, published on September 4 in the Official Gazette. The regulation establishes the agricultural contracting policy in the country, insisting on “forced contracting” with the state and on local authorities planning the productions that farmers must deliver in 2025.
LINKAGE WITH A COOPERATIVE OR A STATE ENTITY
The regulation reiterates that, to market their products, Cuban farmers must be members of a cooperative or be “linked” to a state entity. These cooperatives and linked state entities are responsible for “contracting” (selling) the products “with” the end recipients.
For producers who are not members of a cooperative—i.e., those who are “linked”, the regulation states that if they “have the conditions and it is their will,” they can contract directly “with the final destination.” However, it requires that it be “known to the state entity to which they are linked” and that it be “approved” by it.
Additionally, the regulation sets an almost absolute list of products that must be “contracted” (sold) to the state. Notable products expressly mentioned in the resolution include rice, beans, corn, coffee, cocoa, coconut, milk, meat, medicinal plants, flowers, and ornamental plants. For these products, the resolution stipulates that producers must contract 100% of their planned production for 2025.
THE SCOPE OF FORCED CONTRACTING
“Forced contracting” will not only apply to the aforementioned products but also to exportable items such as tobacco, honey, and charcoal. Worse, the regulation uses a generic formula that ensures the state will contract nearly all agricultural production in the country. It states that “agricultural, forestry, and tobacco productions” not expressly mentioned in the regulation must also be contracted with state entities. In these cases, farmers will be required to contract no less than “80% of the state plan” for production in 2025, “according to the agricultural yields and productive indicators of each locality.”
For export products, Resolution 275/2024 complements recently published regulations for the private sector in Cuba. The regulations prohibited private sector participation in the marketing of tobacco leaves and honey and established that only direct producers can market charcoal. With these prohibitions, the first steps were taken to eliminate private sector competition in the market for exportable agricultural products, a matter reaffirmed as the exclusive domain of the Cuban state.
Annex 1 of the regulation specifies that the “contracting of productions that constitute exportable items” will be carried out “prioritized and exclusively” through the specialized (state) business system. It also acknowledges that fresh fruits and vegetables will have priority “in contracting for export.”
The Resolution also allows farmers and cooperatives to directly export products, but only after fulfilling “the contracted quantities with state companies” and obtaining approval from the competent authorities.
First published in Spanish by El Toque and translated and posted in English by Havana Times.
Incompetence reigns supreme in Cuba.