Finding a way for farmers to earn more and consumers to pay less.

Fernando Ravsberg*

Prices in retail produce markets are 3 or 4 times the wholesale markets.

HAVANA TIMES — Last week I went to the “El Trigal” wholesale market and returned home laden with food and amazement. Prices of the farm products are incredibly cheaper than the retail produce markets where most Cubans do their shopping.

A large bunch of bananas goes for 25 pesos (1 USD), a large sack of bell peppers 130 pesos, and I paid 150 pesos for a packed box of premium tomatoes. This is less than a third of what they cost at the stands of the retail produce markets.

“El Trigal” is located within the city of Havana, however, by the time the farm products reach the retail produce markets the prices have tripled virtually accross the board at all stands.

That’s to say, the vender sells it to the public earning twice what the farmer and transporter earn together, even though it is they who produce the food and move it from the countryside, sometimes even from other provinces.

Supply and Demand Prices?

The problem is that for most Cubans is impossible to benefit from the price of wholesale markets.

Today it isn’t the supply of producers and consumer demand that determines the prices of farm produce, but instead the speculation of vendors. Isn’t it in these types of cases where the state should have to intervene?

The market economy should not be blamed for the way the produce markets function because they are just one example that highlights the worst of its features: a trafficking of food where workers and consumer are equally exploited.

It is true that anyone can buy at the “El Trigal” wholesale market, but it is a half-truth, since the only way to get there is by car and you need to buy products in bulk, by sacks and boxes.

Cuban independence war General Maximo Gomez [a Dominican himself] said that Cubans always fall short or go too far. Today the state exercises strict control over some aspects of the economy while leaving the prices of transport and food to the market.

The pendulum does not have to go from one extreme to the other, there are experiences in the world of strong states successfully guiding far more complex economies. And in Cuba there is no shortage of economists who are aware of these examples.

The state goes from the extreme of stipulating the exact weight a plate of spaghetti must have to leaving without regulation the prices of basic products.

The opening of spaces to the market is a must but clear rules for commercial activity are needed to prevent speculation and usury, especially anything having to do with basic food products.

They could start by setting an example in the state’s hard currency stores by putting a brake on the price increases of staple foods and instead applying hikes on less essential products, such as rum, beer or tobacco products.

It also would be a good idea to intervene in some way at the retail produce markets to cut down on speculation, establishing fair prices for the farmers and affordable to consumers, along with a reasonable profit to the distributors and vendors.

In California they have opted to bring producers closer to consumers, using a system of street fairs that avoid the usual commercial chains. In doing so, an act of magic occurs, farmers earn more and consumers pay less.
(*) Visit Fernando Ravsberg’s blog.

15 thoughts on “Prices in Cuba’s Produce Markets

  • Cuba has two currencies, one is the regular peso (CUP) which trades at 24/25 to one CUC
    The other is the CUC which is the dollar equivalent. (Note if you exchange a cash dollar you will recieve .87 cents CUC as there is a 10% penalty assessed on cash dollars. The other 3% is the exchange commission.

  • Can you tell me the exchange rate? I thought one Cuban peso was equivalent to one U.S. dollar. So, how does 25 pesos = 1 USD? A little confused.

  • Thank you.

  • I find your comments to be the most well thought out and to the point. I only read your responses.

  • Your proposed solution misses the mark. The problem is much broader and deeper. The entire Cuban economic system is ideological, arbitrary & irrational. It fails to realistically price products and labour. Under such a system, it is inevitable that production will decline, quality will drop, distribution will be haphazard, corruption will flourish and prices will be high.

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