Wednesday 01 October 2008, San José, Costa
Rica
ECONOMY-CUBA:
Speculate No More
By Patricia Grogg
HAVANA (IPS) - The
Cuban government is
seeking to curb
excessive food prices in
farmers’ markets by
cracking down on
speculation and theft,
which will benefit
consumers but may
discourage producers,
according to economists.
An article published
Monday in the state
newspaper Granma says
that "no price increases
for basic goods, either
rationed or sold at
(regulated) prices in
Cuban pesos or
hard-currency stores,
are envisaged, despite
generally higher import
costs."
"In the case of the
supply-and-demand
markets, the maximum
prices for a range of
basic produce are to be
provisionally set at
those existing before
the hurricanes," while
in the case of other
farm produce outlets,
these goods will
continue to be priced as
agreed with the
authorities, the article
says.
In the wake of
hurricanes Gustav and
Ike, which devastated
the country between Aug.
30 and Sept. 9, the
availability of tubers
and root crops at food
stalls has begun to
dwindle.
At the same time
consumers are
complaining about
generalised food price
increases, especially in
the farmers’ markets
created in the 1990s,
where most prices are
set by supply and
demand.
"Now they have to get up
early. People have been
queuing since early
morning to buy lettuce
and other products. As
you can see, nothing is
left now," a farmer from
outside Havana, who
comes to the city on
Sundays to tend his
stall in one of the
agricultural markets,
told IPS.
Located in the Havana
neighbourhood of El
Vedado, this market has
been dubbed "The
Boutique" because of its
expensive produce that,
in normal times, crams
the stalls. But towards
midday on Sunday, many
were empty.
"I used to buy very good
onions and garlic here,
but they were imported
and now they are no
longer on sale," a woman
customer said.
Better informed, a
vendor at another
farmers’ market told IPS
that during the week he
nearly got into trouble
because of a surprise
inspection. "The police
even came, and searched
our storage spaces. They
were looking for stolen
produce and checking up
on our prices," he said.
"Those persons who have
violated the law on the
pretext of resolving
certain personal needs,
placing that above the
collective interest,
have been rigorously
dealt with in the
courts. For the
exceptional cases of
individuals who have
incited others to follow
them in their crimes,
the punishment has been
greater," the Granma
report says.
"This will be the
invariable action taken
against such crimes and
against any
manifestation of
privilege, corruption or
theft, all the more so
when it concerns
resources for those
affected by the
hurricanes," adds the
article in Granma, the
official newspaper of
Cuba’s governing
Communist Party.
The article titled (in
the original Spanish
version) "Information
for Our People," a
formula Granma uses for
issues the authorities
regard as sensitive for
the island's population
of 11.2 million, appeals
to the conscience of
vendors, producers and
intermediaries to keep
the markets and sales
outlets supplied with
food.
In addition to
administrative measures,
"the agencies of
internal order will
continue acting
energetically, in line
with what is established
in law, and the courts
will apply the existing
penal code with maximum
rigour to those
committing criminal acts
in the current special
circumstances," the
newspaper says.
On Sept. 20, former
President Fidel Castro
devoted one of his
regular opinion columns
to the issue of food
supplies, and called on
the Communist Party, of
which he continues to be
first secretary, to
"fight relentlessly"
against theft,
corruption, cronyism and
hoarding that might
become widespread after
the impact of the
hurricanes.
Five days later,
Attorney General Juan
Escalona and his deputy
Rafael Pino said on
television that they
would rigorously apply
the law to punish crimes
related with "food, the
black market, and
sky-high prices."
The Criminal Code
provides for fines or
prison sentences,
according to the
seriousness of the
crime, and confiscation
of goods.
Some economists warn
that freezing prices is
not necessarily a good
solution at a time when
the market needs to be
supplied with food. "A
positive outlook
characterised by
incentives, rather than
uncertainty, ought to be
created for producers,"
said an academic who
chose to remain
anonymous.
He said that the
measures announced by
the government fail to
provide a stimulus for
those who have submitted
applications this month
to be granted the use of
idle lands, in order to
make them productive.
"Many of these people
might now think that
farming will not be
profitable, because the
plots of land they are
to receive will require
investments, which drive
up production costs,"
the academic said.
In a recent article,
economist Pavel Vidal
argued that controlling
prices in the
agricultural markets
operated according to
supply and demand is
"the worst" of all
possible options,
because it might
stimulate the black
market and restrict the
signals and incentives
that prices transmit to
producers.
But Ariel Terrero, a
commentator on economic
topics on state
television, said last
week that in the context
of the difficulties
faced by the country,
with its crops badly
damaged by Ike and
Gustav, no measure can
be counted on to
stimulate production
over the next few
months.
He advocated freezing
prices for a few months
while the emergency
lasts, and said "the
farmers’ markets are not
a magic wand for solving
the problems of
agriculture," a sector
the government wishes to
strengthen in order to
replace food imports.
The government of
President Raúl Castro
announced months ago
that high international
food prices would
increase the cost of
Cuba's food imports to
2.5 billion dollars this
year, to furnish the
basic basket of
subsidised goods that
every Cuban family
receives once a month.
Granma says "planned
imports of cereals,
grains and other
products have been
guaranteed, and others
are being quickly
contracted as a sales
option to the
population, given the
temporary reduction in
supplies of root
vegetables and fruits
that will persist over
the next few months."
The authorities'
preliminary estimate of
the cost of damages
caused by Gustav and Ike
in Cuba is five billion
dollars, but independent
calculations put the
figure at twice that
amount. |
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