News / Americas

    In a Reversal, Cuba Tries Price Controls to Tame Food Inflation

    FILE - Farmer Diogenes Cheveco, 73, picks beans on unused government land that farmers are allowed to use to grow food and raise livestock, on the outskirts of Havana, Cuba, March 3, 2015.
    FILE - Farmer Diogenes Cheveco, 73, picks beans on unused government land that farmers are allowed to use to grow food and raise livestock, on the outskirts of Havana, Cuba, March 3, 2015.
    Reuters

    Cuba is backtracking on some key agricultural reforms and experimenting with restoring price controls in the face of public demands that the government tame rising food costs.

    Prices are up because of limited production, poor weather and greater demand fueled in part by the market-oriented reforms championed by President Raul Castro.

    Those reforms, which the government says will modernize its socialist economic model, have led to growing numbers of wealthier Cubans even as most workers have seen food prices grow far faster than their state salaries.

    With new market rules in play, but limited food supplies, prices have floated toward what affluent Cubans can afford.

    Aware of public sentiment and eager to contain inequalities, the government is now buying, distributing and selling more food at fixed prices.

    It has ordered privately owned trucks to unload at wholesale markets instead of retail outlets, and some private street vendors have apparently been shut down to push more produce through controlled markets.

    In central Ciego de Avila province, the government will resume "the old strategy" of buying and transporting all crops once it receives more vehicles from the central government to get the job done, the local Communist Party weekly Invasor reported.

    Just west of Havana, in Artemisa province, the state this month opened outlets that sell basic foods at fixed prices, reversing a trend to get out of the retail food business. A similar plan was announced this week for the capital, creating at least one such market in each of its 105 districts, said Tribuna de La Habana, another official newspaper.

    At a military-run market in the Vedado district of Havana this week, there were mounds of plantain and onions and nothing else. Nevertheless, hundreds gathered to buy at low prices.

    "The government had to do something so I support this, even if there is less variety," homemaker Graciela Costa said as she waited in line. "Hopefully they can force speculators to lower their prices."

    FILE - Cuba's President Raul Castro arrives for the 70th session of the United Nations General Assembly at U.N. headquarters in New York, Sept. 28, 2015.
    FILE - Cuba's President Raul Castro arrives for the 70th session of the United Nations General Assembly at U.N. headquarters in New York, Sept. 28, 2015.

    From Fidel to Raul

    Raul Castro, who took over from his ailing brother Fidel in 2008, has pushed through market-style reforms to encourage more private enterprise, but he has vowed to move cautiously and maintain socialist policies.

    Fidel Castro routinely rolled back reforms when they started to create problems for the Communist government. This would be the first reversal under Raul since the Communist Party approved sweeping reform five years ago.

    In the National Assembly last month, some deputies called for a return to price controls and Castro himself said "a solution must be found" to bring prices in line with wages.

    "At the end of December after Raul spoke, all the street vendors disappeared and they still haven't returned," said Rosalia Leon, a pensioner from Havana. "There used to be a produce kiosk across the street from where I live and it shut down and still hasn't reopened. These days I have to look far and wide for what I need to eat."

    Cuban authorities have so far balked at imposing across-the-board price controls, but they have mounted a campaign against "unscrupulous middlemen and speculators" through state-run media, blaming those who buy directly from farmers, truck drivers and urban vendors for high prices.

    Such rhetoric from the past, which had disappeared until recently, is driven by a clear divergence between food prices and salaries.

    About 70 percent of Cuban workers are employed by the state with an average salary of $25 per month, but Cubans who receive remittances or work in growth businesses such as tourism are doing much better.

    Economy Minister Marino Murillo said poor and low income Cubans spend 75 percent of their salary on food, though they also receive free social services and subsidized utilities and pay no rent or mortgage.

    The cost of a family's basket of basic foods rose 15 percent in both 2012 and 2013 and 28 percent in 2014, according to the Union of Young Communists' newspaper, Juventud Rebelde.

    Government data showed average state wages rose just 13 percent in 2014 after barely increasing the two previous years.

    By restoring some price controls, the government hopes to push down market prices and signal it will not leave the least fortunate behind.

    Still, one Cuban agricultural expert, who asked for anonymity due to restrictions on talking with journalists, said the measures taken this year are futile except as short-term tactics.

    Despite reforms in agriculture under Castro, central planners had continued to assign scarce inputs and tell farmers what to plant rather than let the market decide, he said.

    "The problem is that the reforms are being implemented in a piecemeal and contradictory fashion," he said. "They decentralized distribution, but not production. Food production through to consumption is a chain that is only as strong as its weakest link."

     

    You May Like

    Top US General: Turkish Media Report ‘Absurd'

    General Dunford rejects ‘irresponsible' claims of coup involvement by former four-star Army General Campbell, who led NATO forces in Afghanistan before retiring earlier this year

    Video Saving Ethiopian Children Thought to Be Cursed

    'Omo Child' looks at efforts of one African man to stop killings of ‘mingi’ children

    Protests Over Western Troops Threaten Libyan 'Unity' Government

    Fears mount that Islamist foes of ‘unity' government plan to declare a revolutionaries' council in Tripoli

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    London’s Financial Crown at Risk as Rivals Eye Brexit Opportunitiesi
    X
    VOA News
    July 25, 2016 5:09 PM
    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.
    Video

    Video London’s Financial Crown at Risk as Rivals Eye Brexit Opportunities

    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.
    Video

    Video Recycling Lifeline for Lebanon’s Last Glassblowers

    In a small Lebanese coastal town, one family is preserving a craft that stretches back millennia. The art of glass blowing was developed by Phoenicians in the region, and the Khalifehs say they are the only ones keeping the skill alive in Lebanon. But despite teaming up with an eco-entrepreneur and receiving an unexpected boost from the country’s recent trash crisis the future remains uncertain. John Owens reports from Sarafand.
    Video

    Video Migrants Continue to Risk Lives Crossing US Border from Mexico

    In his speech Thursday before the Republican National Convention, the party’s presidential candidate, Donald Trump, reiterated his proposal to build a wall along the U.S.-Mexico border if elected. Polls show a large percentage of Americans support better control of the nation's southwestern border, but as VOA’s Greg Flakus reports from the border town of Nogales in the Mexican state of Sonora, the situation faced by people trying to cross the border is already daunting.
    Video

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video Calm the Waters: US Doubles Down Diplomatic Efforts in ASEAN Meetings

    The United States is redoubling diplomatic efforts and looking to upcoming regional meetings to calm the waters after an international tribunal invalidated the legal basis of Beijing's extensive claims in the South China Sea. VOA State Department correspondent Nike Ching has the story.
    Video

    Video Four Brother Goats Arrive in Brooklyn on a Mission

    While it's unusual to see farm animals in cities, it's become familiar for residents of Brooklyn, New York, to see a little herd of goats. Unlike gas-powered mowing equipment, goats remove invasive weeds quietly and without adding more pollution to the air. As Faiza Elmasry tells us, this is a pilot program and if it proves to be successful, the goat gardener program will be extended to other areas of New York. Faith Lapidus narrates.
    Video

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.

    Special Report

    Adrift The Invisible African Diaspora

    More Americas News

    US to Address Illegal Immigration From Central America

    Costa Rica will aid in screening, and Obama administration will expand Central American Minors program to provide safer, more orderly entries of qualified youths

    85 Russian Athletes Barred from Rio Olympics Over Doping

    Among them - 2012 Olympic champion Alexander Dyachenko, one of five canoeists named in recent WADA report, alleging state-sponsored doping cover-up

    Commerce Thrives on US-Mexico Border

    Locals say there are many entangled issues at the border that require clearheaded examination, not heated rhetoric

    Colombia Declares End to Zika Epidemic Inside Country

    Colombia has reported nearly 100,000 cases of infection, with 21 cases of Zika-related microcephaly

    Life on the Line in Venezuela as Economic Crisis Worsens

    As country's lines have grown longer and more dangerous, they have become not only the stage for everyday life, but a backdrop to death

    Colombian Drug Lord Gets 35 Years in US Prison

    Daniel Barrera, convicted of trafficking hundreds of tons of cocaine, also fined $10 million