Cuba’s State-Run Tobacco Industry and the Farmers

[El Presidente]

https://havanatimes.org/opinion/cubas-state-run-tobacco-industry-and-the-farmers/

 March 22, 2023

Havana Times Article. 

Cuba’s State-Run Tobacco Industry and the Farmers

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.

[asudevil08]

After watching all of the "glamorous" insta vids of prominent cigar vloggers, it really makes you sick to read something like this.  The festival just continues to be a slap in the face to those who get none of the proceeds in return.  

The world has never needed nudies like it does now.  Oh and government reform in cuba. 

[ha_banos]

I could not bring myself to visit Cuba now knowing I'd be supporting the establishment. I've pretty much stopped buying CC. Praying for better times for these people.

[Corylax18]

The article is depressingly accurate. The PdR region is still in a very bad way. Not only have farmers not recieved payment for last years harvest(which was mostly ruined) But they didn't receive any money at all from the state to fix their homes, the drying barns, anything. So two years in a row, they've been forced to plant by the government with little to no chance of actually completing the harvest and drying process. Some of the best/most famous farmers on the island are fed up and reaching/past their breaking point. I dont see how it can go on much longer. 

10 minutes ago, ha_banos said:

I could not bring myself to visit Cuba now knowing I'd be supporting the establishment. I've pretty much stopped buying CC. Praying for better times for these people.

I understand where you're coming from, but don't think this way. You can travel to Cuba and not give the Government 1 dime above the landing/takeoff fees built into your plane tickets. 

I'm sure the Cubans appreciate your prayers, but prayers don't fix the drying barns, prayers don't make the diesel over flow, prayers don't fill the stomachs of the farmers families. Spending time and money at the farms does. Some have rooms for rent, others provide food and beverage, some just cigars. Either way, putting foreign currency directly into the hands of someone who earned and deserves it solves a lot more ills than thoughts from abroad. Right now, these farmers are surviving on the 10% of their crop they can keep and sell onto the black market. Supporting that black market is a huge middle finger to the Cuban government while providing desperately needed income to those that actually earned it. Two Birds, One Stone. 

[helix]

1 hour ago, El Presidente said:

Authorities have yet to explain the causes for these disasters.

🤔

[SCgarman]

17 hours ago, Corylax18 said:

The article is depressingly accurate. The PdR region is still in a very bad way. Not only have farmers not recieved payment for last years harvest(which was mostly ruined) But they didn't receive any money at all from the state to fix their homes, the drying barns, anything. So two years in a row, they've been forced to plant by the government with little to no chance of actually completing the harvest and drying process. Some of the best/most famous farmers on the island are fed up and reaching/past their breaking point. I dont see how it can go on much longer. 

I understand where you're coming from, but don't think this way. You can travel to Cuba and not give the Government 1 dime above the landing/takeoff fees built into your plane tickets. 

I'm sure the Cubans appreciate your prayers, but prayers don't fix the drying barns, prayers don't make the diesel over flow, prayers don't fill the stomachs of the farmers families. Spending time and money at the farms does. Some have rooms for rent, others provide food and beverage, some just cigars. Either way, putting foreign currency directly into the hands of someone who earned and deserves it solves a lot more ills than thoughts from abroad. Right now, these farmers are surviving on the 10% of their crop they can keep and sell onto the black market. Supporting that black market is a huge middle finger to the Cuban government while providing desperately needed income to those that actually earned it. Two Birds, One Stone. 

So the government "forces" them to plant/grow tobacco with little to no compensation? What if they tell the g'vt FU and grow vegetables and/or nothing at all? As of now they are receiving no payment. Why not just sit back and do nothing, or hop a ride out of the country like the thousands of others? The ship is sinking quick.

[Puros Y Vino]

Wow.😔  Contrast this with the galling price increases by Habanos and you have a recipe for the collapse of the industry altogether.    

[Corylax18]

1 minute ago, SCgarman said:

So the government "forces" them to plant/grow tobacco with little to no compensation? What if they tell the g'vt FU and grow vegetables and/or nothing at all? As of now they are receiving no payment. Why not just sit back and do nothing, or hop a ride out of the country like the thousands of others? The ship is sinking quick.

Yeah, pretty much. 

Very few Cubans have the means to buy a $3,500 plane ticket to Managua and the $15,000(per person) a good coyote costs to get them from Managua to say Yuma, AZ.

That's more than $70,000, Cash, for a family of 4. To risk you and your families lives, with no guarantees. Most Families in the US/EU couldn't scrape that together without selling much of what they own. Most Cubans don't own that much in total assets to begin with. The ones that did are already gone or will ride this out for the long haul. The market for Used Cars and Homes has fallen off drastically.(all sellers no buyers).

Lets say you have that much money and your family makes it through Mexico alive. What is that farmer going to do now? Pick vegetables? Work at a cigar shop (if their english is good enough) most people don't have a name and reputation to trade on. So their options are very limited in North America.  

Also, the farmers don't own the land, the government does. They allow them to use it, to grow tobacco, not to do with as they please. Some of the more famous and respected farmers get more leeway here than others, but its a coop based system. If you don't want to farm it, they'll find someone who does. 

As bad as the situation is, there aren't many/any better options for a lot of these farmers. 

[Puros Y Vino]

So, if farmers balk at growing tobacco or anything for that matter what's their options? Starve? Go to "prison" and then get bused back to work on the tobacco chain gang anyway??  😪