Cuba’s State-Run Tobacco Industry and the Farmers

Tobacco Farm

The Cuban Government now holds the monopoly on tobacco with its state-led company Tabacuba, which manages the entire tobacco sector.

By Javier Herrera

HAVANA TIMES – Between 1717 and 1723, tobacco farmers from Havana’s outskirts led the farmer uprising that manifested increasing disagreements between Cuban producers and the Spanish metropolis.

These uprisings were the Cuban tobacco farmers’ (vegueros) response to the order implemented by the new governor Vicente Rojas in 1716, who came with instructions to ban private tobacco sales. The vegueros had to sell their entire harvest to purchasing entities called Factorias for a price set in Spain. These directives were called the Tobacco Estanco.

The Cuban Estanco hurt farmers, as they were forced to sell all their yield to a centralized entity for a price set by the Spanish Government. The latter would then put it on the market for a much higher price, which brought in great profits but ruined vegueros, former intermediaries and hurt some of the clergy, who owned the land the vegueros rented to cultivate it.

Protests were put down with brutal repression that reached a climax on February 23, 1723, when 11 farmerswere executed by firing squad in the town of Jesus del Monte (which now forms part of the 10 de Octubre municipality, in the Cuban capital), after they were detained days before around Santiago de las Vegas.

Four centuries after this uprising, it seems History is about to repeat itself. The Cuban Government now holds the monopoly on tobacco with its state-led company Tabacuba, which manages the entire tobacco sector in every phase of its production chain, from agriculture to trade. The regime uses Tabacuba to set prices for buying the precious leaf and fails to meet contracts made with farmers a lot of the time, while selling farmers the supplies they need to produce such a fragile crop for an exorbitant price.

In 2021, farmers were forced to plant the crop because they were threatened with having their lands seized, after they refused to sow tobacco because of low purchase prices and payment defaults.

The state of tobacco drying huts

Not too long ago, Marino Murillo, the tzar of economic reform in Cuba who failed spectacularly with the so-called Currency Reform, replaced Justo Luis Fuentes Diaz, who led the tobacco group for approximately seven years. One of his first directives in the role was to reduce payments agreed with farmers by half, to 3.6% of the harvest’s value in Freely Convertible Currency (dollars on debit cards used in stores), which sparked outrage among farmers, in addition to late payments.

Ruin in the wake of Hurricane Ian

In September 2022, Hurricane Ian swept through Pinar del Rio with unusual rage. The province is the country’s leading tobacco producer, and the hurricane destroyed over 10,000 tobacco drying huts, left thousands of homes in ruin and thousands of displaced families. Today, many of these homes have yet to be repaired and people are using plastic as a roof to protect themselves from the rain. Ian was a big hit to tobacco production and farmers.

From one misfortune to the next, the tobacco sector suffered a great fire last year at the leaf selection and de-stemming factory in San Antonio de los Baños, the largest of its kind in the country, resulting in significant losses, but without human fatalities. On an island where fires are becoming more and more common, another fire destroyed a tobacco drying barn in Viñales in September, and a train transporting material for production suffered the same fate in mid-November. Authorities have yet to explain the causes for these disasters.

So far this year, farmers have started the tobacco harvest without receiving late payments from the last tobacco season, with the consequent effect this has on their purchasing power to buy essential supplies and to hire labor for the high season.

While vegueros remain and sink deeper and deeper into poverty, the renowned Habano Festival, a fair to exhibit, promote and sell the precious and exclusive Cuban product, was just held in the first week of March.

The Habano Festival

Attended by President Miguel Diaz-Canel, Prime Minister Manuel Marrero Cruz and board members of the Tabacuba business group and Habanos LLC., the 23rd edition of the Habano Festival was held in the Pabexpo fairground, with 2000 foreign participants attending. Sales and auctions were carried out during the event that hit a record of 11.2 million USD.

One of the most striking sales was a humidor (a luxury container for keeping cigars fresh) that could hold 500 cigars with President Miguel Diaz-Canel’s signature, that was auctioned for a record price of 4,200,000 Euros. 

While sales at Tabacuba and Habanos LLC. exceed 500 million USD per year, Cuban tobacco farmers are becoming destitute as a result of poorly-formulated economic policy that is even worse when implemented. Little or nothing is known about where the millions that come in from the sector, which the State itself declares, end up. As well as being an incompetent company in terms of meeting national tobacco consumption, it finds itself forced to ration consumption and sales with the ration booklet, which means it sells for an exorbitant price on the illicit market.

Such a productive sector, which brings in the most revenue in foreign currency from agriculture, I wonder whether it makes sense to drive farmers into poverty and keep them in a never-ending state of anxiety and annoyance. Repressing and intimidating vegueros doesn’t seem to be the best decision. Repressed and poorly-paid workers become unproductive and they also run the risk of them sabotaging harvests. It doesn’t make sense to think the State itself is torpedoing the foundations of such a lucrative business.

It still has time to prevent an uprising of vegueros 400 years after the one that protested differences in interest between the Creoles and the Spanish metropolis. Fixing the problem would be wise.

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