Big Trouble in Little Pinar.

[El Presidente]

I came across the following article this morning. It is dire reading on the state of play in Pinar del Rio as it applies to tobacco farmers. 

The article is in Spanish. Use Google Translate to get the drift (snuff = tobacco). 

But in Short. 

• Initial planting was a fail due to rains.
• farmers were instructed to plant again outside of season on reassurances of the Government that they would be paid and insurance would cover losses. 
• Replant was not successful. 
• The minimum price agreed to prior is now being renegotiated by the government. 
• Farmers still haven't been paid nor have any idea what they will receive...let alone if it will be enough to cover their costs. 
• Tobacco season is only a few months away. many are hesitant to go again given they haven't seen and money. 
• If they don't plant they run the risk of their lands being appropriated. 

 

One of the comments to the article struck home. 

Communist abusers , treating the peasants as in feudal times , kings cagastros then sell boxes of tobacco at astronomical prices on the world market, it 's good to have an island with millions of slave and to squeeze without anyone you can contradict them.

 

More fluent Spanish readers than I can expand on the article. However the anger (and fear) on the ground is palpable. 

It certainly is a piss poor way to treat your industry's most valuable asset. The farmer. 

https://www.cubanet.org/actualidad-destacados/pagos-del-tabaco-en-pinar-del-rio-un-caza-bobos/#disqus_thread

 

[stang]

That sucks

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[JoeyW]

Damn.... didn t know it been that bad. Hope they ll find a way to help the farmers

[Ubergosupro69]

Sad to hear.

[sactochris]

Sounds about like working for my old boss.

[Fugu]

Seems there currently is more than a tobacco crisis menacing. A few days ago, Raul has been cited stating, that Cuba is facing economic difficulties (granted, as if that were new), but he added, not as troublesome as after the fall of the USSR, but severe... . Him mentioning the 90s situation for comparison I found noteworthy. With the lack of cheap oil from Venezuela and a current low in nickel quotations they are running into trouble.

[gweilgi]

7 minutes ago, Fugu said:

Seems there currently is more than a tobacco crisis menacing. A few days ago, Raul has been cited stating, that Cuba is facing economic difficulties (granted, as if that were new), but he added, not as troublesome as after the fall of the USSR, but severe... . Him mentioning the 90s situation for comparison I found noteworthy. With the lack of cheap oil from Venezuela and a current low in nickel quotations they are running in trouble.

Does anyone know of an impediment why Cuba shouldn't or cannot choose the same route as Vietnam or even China by retaining Communist party control while unleashing the productivity and wealth potential of the people?  

[El Presidente]

44 minutes ago, gweilgi said:

Does anyone know of an impediment why Cuba shouldn't or cannot choose the same route as Vietnam or even China by retaining Communist party control while unleashing the productivity and wealth potential of the people?  

1. Incompetence. 

2. Trade and banking restrictions

3. See point 1. 

[Sunsmoke]

Thanks for posting, wow sounds terrible! 

[Corylax18]

Unfortunately not much new info. 1 or 2 bad harvestes can easily be blamed on weather, extenuating circumstances, whatever. 3 (or now sounding like 4.5 with the mostly failed planting and replanting this year) is not just mother nature being mean. Last years El Nino conditions resulted in record growing seasons around the world (including many in the US) Yet Cuba got almost nothing?

Cuba has deep, systematic socioeconomic problems that are easy to forget/ignore from afar, until they affect something that matters to us. Thanks Pres for the reminder of the sacrifice required to provide us with something the we (me included) often take for granted. 

[planetary]

Interesting.  I had read not too long ago (source) that Cuba has been experiencing a drought in the last 2 years.  Perhaps prolonged dry conditions mixed with normal-to-heavy rains wreaked havoc with agriculture?

[NSXCIGAR]

2 hours ago, gweilgi said:

Does anyone know of an impediment why Cuba shouldn't or cannot choose the same route as Vietnam or even China by retaining Communist party control while unleashing the productivity and wealth potential of the people?  

What Rob said, basically.

The Castros are real stubborn sons of a gun. Sure, there are certainly double standards of sorts in the world as far as sanctions with countries that aren't totally dissimilar to Cuba in terms of human rights (Vietnam, China), but their economies are significantly freer than Cuba's, and that is what the powerful interests really care about.

Believe me, if the big banking interests thought they could make serious money in Cuba everyone would look the other way on the human rights issues as they do with Vietnam, China and many Islamic countries. The fact is that the extreme socialization of the economy in Cuba limits any potential economic growth to the point where the bankers and capitalists aren't really interested--especially with the risk of their capital being expropriated any time the Castros wake up in a cranky mood.

Fidel and Raul are simply not interested in any market reforms of the kind Vietnam and China have undertaken. As long as Raul and the gang won't budge, the banking and trade restrictions will continue. And they can continue to blame the capitalist pigs.

And by the way, anyone who thinks economic downturns are a product of the free market should read articles like this. And they're nothing new. Every socialist and planned economy has vicious economic cycles and downturns, and always has, and they're all likely worse than the market economies' downturns but since the socialist countries cook their books so well it's often harder to see.

[Moogypug]

Fascinating. The gov must recognize that this type of behavior is not sustainable long term. 

[gweilgi]

7 minutes ago, Moogypug said:

Fascinating. The gov must recognize that this type of behavior is not sustainable long term. 

The Cuban regime is now older than most African and many Caribbean/Latin American nations ...

Plus, in my observation dictators only rarely think beyond their own survival....

[anacostiakat]

No bueno.....

[helix]

Free the slaves.

[wabashcr]

11 hours ago, gweilgi said:

Does anyone know of an impediment why Cuba shouldn't or cannot choose the same route as Vietnam or even China by retaining Communist party control while unleashing the productivity and wealth potential of the people?  

You've kind of seen some reforms in that direction from Raul, allowing some private enterprise.  But Fidel is a hard liner.  Private enterprise flies in the face of the tenets of the Revolution.  Their differing philosophies reportedly caused some strained relations between the brothers.  Fidel has stocked the communist party with enough hard liners that Raul has to tread lightly.  The most recent party congress, earlier this year, saw the party tighten the reins on economic reform, a sign that the hard liners are still very much in control.

Fidel seems to be in pretty bad health, and doesn't have a lot of time left.  It will be interesting to see how the dynamic changes once he's gone.  Hopefully that clears the path for Raul and the other reformists to kick into gear.  We'll see how much power the Fidel loyalists have without him, and their will to continue the fight will surely be tested.  

[PigFish]

I could have written the line on Communists myself! Centralized government, in a nutshell!

I am betting that 200K Euro box of cigar would go some distance in the hands of the farmers...! Yet again, Cuba shows what the term 'class' struggle means and how a caste system is defined.

Too damn bad. Not for tobacco, but for humanity! -Piggy

[oliverdst]

Monopoly. It happens in poor countries on a regular basis.

But as far as I know Imperial Tobacco (British) has blame too.

[avitus]

Bad news indeed.

But hey, why do you guys compare Cuba to, say US or Europe?

There are lots of democratic caribbean countries who has the same shitty economy. Apples to apples.

According to wikipedia Cuba has GDP $72.3 billion, GDP per capita $10,200, Population below poverty line 1.5%

Jamaica: GDP $14.36 billion, GDP per capita $9,199, Population below poverty line 17.6%

Haiti GDP $13.42 billion, GDP per capita $1,300, Population below poverty line 69%

Dominican Republic GDP    $106.240 billion, GDP per capita $10,060, Population below poverty line 40.9%

Mexico GDP $1.291 trillion, GDP per capita $10,767, Population below poverty line 44.8%

Honduras GDP $18.55 billion, GDP per capita $4,700, Population below poverty line 60%

Guatemala GDP $78.42 billion, GDP per capita $5,200, Population below poverty line 54%

And by the way, lets do not forget that Cuba is one of the safest country in the region and has very good healthcare system free of charge for everyone (education as well).

I really doubt the communism is the root cause of all cuban problems.

[helix]

"According to wikipedia Cuba has GDP $72.3 billion, GDP per capita $10,200, Population below poverty line 1.5%"

Just a little misleading..........

[planetary]

 

8 minutes ago, helix said:

"According to wikipedia Cuba has GDP $72.3 billion, GDP per capita $10,200, Population below poverty line 1.5%"

Just a little misleading..........

Questionable poverty line percentages aside, I think the comparison @avitus suggests is not unreasonable.

[NSXCIGAR]

1 hour ago, avitus said:

Bad news indeed.

But hey, why do you guys compare Cuba to, say US or Europe?

There are lots of democratic caribbean countries who has the same shitty economy. Apples to apples.

According to wikipedia Cuba has GDP $72.3 billion, GDP per capita $10,200, Population below poverty line 1.5%

Jamaica: GDP $14.36 billion, GDP per capita $9,199, Population below poverty line 17.6%

Haiti GDP $13.42 billion, GDP per capita $1,300, Population below poverty line 69%

Dominican Republic GDP    $106.240 billion, GDP per capita $10,060, Population below poverty line 40.9%

Mexico GDP $1.291 trillion, GDP per capita $10,767, Population below poverty line 44.8%

Honduras GDP $18.55 billion, GDP per capita $4,700, Population below poverty line 60%

Guatemala GDP $78.42 billion, GDP per capita $5,200, Population below poverty line 54%

And by the way, lets do not forget that Cuba is one of the safest country in the region and has very good healthcare system free of charge for everyone (education as well).

I really doubt the communism is the root cause of all cuban problems.

Two things--

first, Cuba's economic data is about as cooked as a Christmas Goose. Also, GDP figures are pretty much useless when trying to determine how wealthy the average Cuban is (or how much purchasing power they have). Just because Cuba's total product in dollars is divided by population doesn't mean that money gets into the hands of those people. The gorss profits generated by Cubatabaco and every other state company are retained by the government and little of it goes back to the people, and if it does, it's frequently mis-allocated. GDP is much more meaningful in countries with larger private sectors.

Second, the other Caribbean nations you mention, while not outright communist, generally have extremely interventionist and corrupt governments and what would be considered severely hampered market economies at best by any western standard. IOW, they're all bad, but Cuba is among the worst. Now, I'd certainly rather be in Cuba than Haiti. Haiti's issues are due to restriction on foreign investment, serious political corruption and lack of private and central bank accountability and corruption there as well. It's ranked 187/189 for ease of starting a business (New Zealand is #1), and according to some reports 90% of Haiti's private employment is in the black or gray markets. So to call Haiti a "market economy" as Wikipedia does is highly disingenuous. Just because there's no outright government ownership of the means of production doesn't mean there's a market economy. The Haitians are simply being regulated to death. When the government regulates all capital and most economic activity, it might as well own the capital.

 

[planetary]

3 hours ago, NSXCIGAR said:

Two things--

Granted, economic system is a factor.  But one also should look to geography (and probably quite a few other things besides) to really understand what's going on.  I'm not in the "geography is destiny" camp, but it cannot be ignored either.

As a consumer, I agree with Rob and prefer that the Cubans just run their damn industry competently.
As a human, I'd like the people of Cuba to not suffer needlessly.

[gweilgi]

4 hours ago, NSXCIGAR said:

Two things--

first, Cuba's economic data is about as cooked as a Christmas Goose. Also, GDP figures are pretty much useless when trying to determine how wealthy the average Cuban is (or how much purchasing power they have). Just because Cuba's total product in dollars is divided by population doesn't mean that money gets into the hands of those people. The gorss profits generated by Cubatabaco and every other state company are retained by the government and little of it goes back to the people, and if it does, it's frequently mis-allocated. GDP is much more meaningful in countries with larger private sectors.

 

Mis-allocation happens in the best-run countries ... bridges to nowhere and pork barrel spending are a universal trait of government.  

I am not an economist or political analyst (nor do I play one on TV), but my reading on the matter suggests that one reason why the Castro regime has survived for so long and even retained significant popular support is that it is comparatively less corrupt than many other nations, whatever their political setup (particularly in the region).  True, citizens do not earn much money and are severely restricted in their lives -- but on the other hand, there is a reasonably good effort by the state to supply the basics.  Much of the tax revenues do go towards ensuring that the cost of living is tiny compared to elsewhere (rent, food, electricity etc) and that services such as education and healthcare are adequate.  

What would be a fascinating read would be an evaluation at PPP of the services and subsidies currently enjoyed by Cubans.  In other words, what would be the cost to the average Cuban family of the healthcare, education and living expenses (rent, food, utilities etc) if it had to be paid for in free-market dollars and compared to the same cost for families in the US, Australia or the UK?