Can We Progress in Cuba under the Current Model?

[El Presidente]

http://www.havanatimes.org/?p=125473

 

Excellent article and a small insert that I have highlighted below. 

It really is a dogs breakfast with no light at the end of the tunnel.  

 

 

 

The farmer from Granma reported his problem in Juventud Rebelde; I reported my problem on alternative digital media platforms, such as Havana Times (How can you fight injustice in Cuba?). After more than four months of complaining and forging agreements at meetings that are then archived, Cubatabaco finally came to the cooperative to analyze the price problem we have. However, they didn’t go to the Farmers Assembly, the came directly to the farmer, the one who publicly denounced the problem, which was me in this case.

Of course, I pointed out the fact that this wasn’t a personal problem, that it was something all tobacco farmers were suffering. However, the unfair price for tobacco continues. Resolving injustices in Cuba is a titanic task, especially if whoever should be defending us by law (the National Association of Small Farmers in Cuba ANAP) admits that “defending farmers is our responsibility, but our first and foremost task is to defend the Revolution.” These were the words of a politician who gave an speech on May 17th at the party for Cuban Farmers’ Day. If there is a dichotomy, farmers interests fade away into the background and we are the ones who pay the ANAP a high tax on our incomes.

[NSXCIGAR]

Best line of the article: However, they’ve been “working on this” for 58 years and it still isn’t working. Maybe it just doesn’t work? 

The Cuban people have been told 1 + 1 = 3 for four generations. As the farmers are essentially serfs and the rest of the population wards of the state, I doubt there will be any "progress" without a revolution. I just hope it's a peaceful one.

When socialism persists for so long it can result in people willing to take a chance on economic freedom as they can do the math and start wondering how it could possibly be worse than what they have now, as the former Soviets did. 

[SignalJoe]

I believe Presidente Ken was making great progress last we heard.  Though he must of censored the press as we have not heard how his first term ended.  

 

[GrouchoMarx]

The basic problem for Cuba is foreign trade. The only way they can do this is through foreign currency, since they're currency is not traded on the open market. They basically have two ways to obtain it: exports, and tourism. Neither of which is bringing in the mega cash they need. Export prices and tourism can only be increased to a "tolerable" (i.e. a level at which they remain competitive - not many people would go to cuba if it was more expensive).

The situation is that they can't openly trade their currency - simply because the CUC is really worth about 2 cents - not the "artificially pegged at" $1US.

Now I don't know what the answer is - but I can easily say that communism doesn't work. Sure, they have "free" health care and education. I love getting served my beer by engineers and nurses (get it? education - but no jobs). 

[BrightonCorgi]

Free trade and open currency puts the leadership and regime at risk.  Maintaining power is the most important thing in Cuba.  One thing is constant in latin america; corruption.  Does not matter the ideology...  Knowing that; what is best for the island?  Cuba could be the epicenter for all things Spanish which is a giant market if they shift their focus some.  Plenty of smart people on the island; just step out of their way.

[GrouchoMarx]

1 hour ago, BrightonCorgi said:

Free trade and open currency puts the leadership and regime at risk.  Maintaining power is the most important thing in Cuba.  One thing is constant in latin america; corruption.  Does not matter the ideology...  Knowing that; what is best for the island?  Cuba could be the epicenter for all things Spanish which is a giant market if they shift their focus some.  Plenty of smart people on the island; just step out of their way.

Exactly - they can't do the open currency thing AND stay in power. They've basically painted themselves into a corner - the only way out is "change".

[1LegLance]

I know that every tourist I talked to in my previous Cuba trips is "one and done", not many people who are not cigar nuts are going to return to Cuba at the prices being charged for everything these days.

The locals I met were getting pretty angry about food going to tourist while the locals have trouble finding goods....it wasn't so bad when it sucked for everyone, toursit and local alike.

Cigars won't save Cuba, tourism is going to take a beating soon and not sure what will be left. Things could get pretty ugly, but then again I remember the "special period" and visiting when things were amazingly bad after the USSR pulled out.

 

[maxcjs0101]

Defending the Revolution - whatever that means.

[NSXCIGAR]

15 hours ago, GrouchoMarx said:

Exactly - they can't do the open currency thing AND stay in power. They've basically painted themselves into a corner - the only way out is "change".

Or just pony up some extra dough for the farmers and keep the natives from getting too restless. I am shocked that the state has pushed it this far though. They are really playing chicken here and since we all know the state will pony up the dough sooner or later, it's best to do it sooner. I guess they just want to see how far they can push them. I think they're finding their limits. Although people do tire of these games--even slaves. Slaves have been known to revolt from time to time.

What's concerning though is that HSA has never been more profitable and keeps raising prices but the farmers keep getting shafted. This could be an indication that there's a serious problem afoot. Or of course that they're just cheap and don't care. But as I said, they really seem to be pushing this pretty far.

[El Presidente]

24 minutes ago, NSXCIGAR said:

 

What's concerning though is that HSA has never been more profitable and keeps raising prices but the farmers keep getting shafted. This could be an indication that there's a serious problem afoot. Or of course that they're just cheap and don't care. But as I said, they really seem to be pushing this pretty far.

I know you didn't necessarily allude to it but HSA has nothing to do with farmers. HSA is a marketing arm Joint venture. Tabacuba is farmers and infrastructure. Tabacuba is Govt = military. 

If push came to shove the Govt could enforce a more draconian structure than currently exists. Bad enough that they set the prices as well as the % of crop the farmers can retain. They also price on quality which is a moveable goal post. They determine when payment is made. Should they determine that more land is required they certainly can go down the track of resource redistribution. 

It is hard enough being a farmer in most countries. 

 

[OZCUBAN]

Seriously what they need is a Elpresidente with a bit of forsight hint hint ??

[RijkdeGooier]

Let's not forget the impact that cheap oil from Venezuela had. Let's see what happens when that program dies. 

[NSXCIGAR]

11 hours ago, El Presidente said:

I know you didn't necessarily allude to it but HSA has nothing to do with farmers. HSA is a marketing arm Joint venture. Tabacuba is farmers and infrastructure. Tabacuba is Govt = military. 

If push came to shove the Govt could enforce a more draconian structure than currently exists. Bad enough that they set the prices as well as the % of crop the farmers can retain. They also price on quality which is a moveable goal post. They determine when payment is made. Should they determine that more land is required they certainly can go down the track of resource redistribution. 

It is hard enough being a farmer in most countries. 

 

Yes, it's not lost on me. But Tabacuba and HSA ostensibly work hand-in-hand as HSA's cigars and their final prices are what determine the value of the tobacco, so in actuality HSA's actions determine the prices Tabacuba could or should be paying for all of their factors of production. In addition, Tabacuba is effectively funded by HSA as that's what generates the revenue. So I often use HSA a bit broadly, but as I see it Tabacuba and HSA are inextricably linked. Sure, it's Tabacuba reps that deal directly with farmers but as HSA is essentially an arm of Tabacuba and the revenue flows through HSA it's tough to really separate the two in most meaningful ways. Structurally, yes, they're different but in terms of who calls what shots I don't think there's any way to really know. We know who ultimately executes a given directive, but not necessarily who initiates directives or who consults with who between the two entities. 

Don't disagree that the state could be even more onerous if they so chose but I'm not sure if production quality and quantity could be sustained if they were more draconian. The farmers are clearly getting fed up and on the brink of becoming dis-incentivized to maximize production or grow other crops if that's an option. I think it's possible Tabacuba is getting a bit too cocky after the excellent crop they were just handed. What they never realize is that it's easy when the weather cooperates and your strains are good. You really need the farmers in your corner when things are less than ideal. Pay them well when the sun shines and they can weather the storm when times get tough. Shaft them when times are good and they'll hang you out to dry when things get tough.

[El Presidente]

48 minutes ago, NSXCIGAR said:

Yes, it's not lost on me. But Tabacuba and HSA ostensibly work hand-in-hand as HSA's cigars and their final prices are what determine the value of the tobacco, so in actuality HSA's actions determine the prices Tabacuba could or should be paying for all of their factors of production. In addition, Tabacuba is effectively funded by HSA as that's what generates the revenue. So I often use HSA a bit broadly, but as I see it Tabacuba and HSA are inextricably linked. Sure, it's Tabacuba reps that deal directly with farmers but as HSA is essentially an arm of Tabacuba and the revenue flows through HSA it's tough to really separate the two in most meaningful ways. Structurally, yes, they're different but in terms of who calls what shots I don't think there's any way to really know. We know who ultimately executes a given directive, but not necessarily who initiates directives or who consults with who between the two entities. 

Don't disagree that the state could be even more onerous if they so chose but I'm not sure if production quality and quantity could be sustained if they were more draconian. The farmers are clearly getting fed up and on the brink of becoming dis-incentivized to maximize production or grow other crops if that's an option. I think it's possible Tabacuba is getting a bit too cocky after the excellent crop they were just handed. What they never realize is that it's easy when the weather cooperates and your strains are good. You really need the farmers in your corner when things are less than ideal. Pay them well when the sun shines and they can weather the storm when times get tough. Shaft them when times are good and they'll hang you out to dry when things get tough.

I don't see them as inextricably linked (Tabacuba/HSA/pricing) 

HSA is a JV including a public company holding 50% (who's subsidiary paid 500 million euro for the rights). Imperial brings knowhow, market and distribution reach. 

Cigars are an input into the JV by the Cuban side. 

Imperial may believe in better working conditions, higher farmer prices, quicker paying turnaround.......but it would mean squat as the Cuban side couldn't give a rats arse. 

The article makes it clear that the interests of the revolution are seen as above the interests of the farmer. That is a shot across the bow if ever I saw one. 

tobacco sales flowing back to the cuban government go back into consolidated revenue. they hold $1 for every $10 that they owe. Paco and his finca seeking better pricing is the last thing on the mind of central casting.  If the US opens up and the land is needed....and Paco refuses to plant then Paco will lose his farm and it will go to Paulo or the co-operative to plant tobacco.  

There will be an appeal process of course. Like everything, it is controlled by the military. Good luck. 

The Cuban government is cocky? Hard not to be when you control every aspect of society. 

[JR Kipling]

I don't know enough about the current situation in Cuba to comment. What I can offer is an excellent book to consider -

Dictator's Handbook: Why Bad Behavior is Almost Always Good Politics by Bruce Bueno de Mesquita and Alastair Smith

What I took from this book is that there are greater similarities in how authoritarian and so-called democracies run at ground level than one might imagine if only they refer to what they are commonly taught in school. Rulers must serve power centers (military, police, etc) within the society in order to remain in their positions. 'The people' rarely are organized, focused, or powerful enough to play much of a role in the rulers everyday calculations.
Propaganda is often used so that a relatively small group of insiders may exploit the broader population while enriching themselves. Is it any wonder that often lawyers run governments. They are in the business of spinning fancy obfuscating yarns.

Finding out where the money goes answers a lot of questions. It was said that ole' Fidel had squirreled away more than $ 1 Billion for himself.


Sent from my iPad using Tapatalk Pro

[NSXCIGAR]

5 hours ago, El Presidente said:

 If the US opens up and the land is needed....and Paco refuses to plant then Paco will lose his farm and it will go to Paulo or the co-operative to plant tobacco.  

There will be an appeal process of course. Like everything, it is controlled by the military. Good luck. 

The Cuban government is cocky? Hard not to be when you control every aspect of society. 

Indeed, that is what it may come to. The only proof that the farmers in fact aren't getting paid "enough" is when Paco refuses to plant, which if what they're saying is true and they aren't able to sustain with current payments will inevitably happen. Then Paulo or the co-op will have the same problem. And if Paco or Paulo thinks that those farms are "theirs", they are sorely mistaken as all land belongs de facto to the state. There are really no fincas to lose as the farmers are simply tenants at the whim of the state. It may come to the farmers telling the state to stick it and getting booted, but the state will have to deal with it again and again if they truly are overly abusing the farmers as they claim. And assuming that the current farmers are the best qualified to grow tobacco, that would be a very unwise path for the state to pursue. 

The crux of the issue is how abused the farmers are really. Are they just whining for more dough or are they in fact operating at a loss? Certainly if it's the former the state is not going to budge an inch. Seeing as how I don't recall farmers screeching this loudly until very recently, perhaps there's something to it.