CubaBrief: Examining the Castro regime’s internal blockade on Cubans – How the dictatorship confiscates what farmers harvest, and force them to allow the rest to rot

Hundreds of boxes of mangos rotted in the fields of Camagüey in the current harvest of 2021. (14ymedio)

Hundreds of boxes of mangos rotted in the fields of Camagüey in the current harvest of 2021. (14ymedio)

The Castro regime continues to call the United States economic embargo on Cuba a “blockade.” This is not true as the State Department (and U.S. – Cuba trade statistics over the past 20 years) demonstrate. A meme appeared on social media in Spanish that outlines this reality, and Cuban scholar and journalist Carlos Alberto Montaner on July 15, 2021 gave a commentary on the blockade not prohibiting a series of economic measures that are proscribed by the Cuban government. Below is a translation to English of the above mentioned meme.

“The blockade does not prohibit fishermen in Cuba from fishing, the dictatorship does;
The blockade does not confiscate what farmers harvest, the dictatorship does;

The blockade does not prohibit Cubans on the island from doing business freely, the dictatorship does;
The blockade did not destroy every sugar mill, textile factory, shoe store, canning factory, the dictatorship did;

The blockade is not responsible for Cubans being paid with worthless pesos and stores sell you products with American dollars; the dictatorship is;

The blockade is not responsible that Cubans are beaten and imprisoned for thinking differently, the dictatorship is;

The blockade is not responsible that there are hundreds of Cuban political prisoners who have not committed any crime, the dictatorship is;

The blockade is not responsible for sending Cubans US dollars that they give to you in worthless pesos in the Western Union, the dictatorship is;

The blockade is not responsible for the dictatorship building hotels and the roofs that fall on Cubans’ heads, the dictatorship is;

The blockade is not responsible for hospitals in Cuba that are disgusting, the dictatorship is;

The blockade is not responsible for not having water in homes, for not maintaining the aqueduct system, the dictatorship is;”

The United States does not have a “blockade” on Cuba, but porous economic sanctions with a focus on cutting off funds to the military that controls most of the Cuban economy. What the meme does reveal is that there is an “internal blockade” on Cubans imposed by the Castro dictatorship. Remittances continue to flood Cuba from the exile community in South Florida, but now in Euros due to new restrictions imposed by the Castro regime on June 21, 2021. What has become vastly more difficult is sending food, and medicine but that is largely due to the regime in Havana restricting travel from the United States, Dominican Republic, Panama, Mexico and other locations beginning on January 1, 2021 while maintaining travel open for tourism and reopening to Russia, despite higher COVID-19 infection rates.

The Center for a Free Cuba is highlighting the reality of this internal blockade by examining each one of the claims above over the next several months.

This first one to be examined was the claim that “the blockade does not prohibit fishermen in Cuba from fishing, the dictatorship does.” This was explored in a July 29th CubaBrief that was mentioned in a column by Mary Anastasia O’Grady in the September 7, 2021 print edition of The Wall Street Journal titled “A Sanction Worth Lifting in Cuba.”

The second to be examined is the claim that “the blockade does not confiscate what farmers harvest, the dictatorship does.”

According to the Cuban Studies Institute between 1952-1958 there was “a successful nationalistic trend aimed to reach agricultural self-sufficiency to supply the people’s market demand for food.” Despite the efforts to violently overthrow the Batista regime in the 1950s, “the Cuban food supply grew steadily to provide a highly productive system that, in daily calories consumption, ranked Cuba third in Latin America.”

This ended when the Castro regime seized and collectivized properties, and prohibited farmers selling their crops to non-state entities, in the early years of the revolution. Farmers no longer decided how much to produce, or what price to sell. The Cuban government established production quotas and farmers were (and are) obligated to sell to the state collection agency, called Acopio. Most recent law on agriculture in Cuba ( Decreto Ley 358 de 2018) continues to prohibit private sales of agricultural products to non-state entities. The dictatorship began rationing food in 1962 as a method of control and continued the practice over the next six decades. Rationed food is not free, but sold at subsidized prices. Rationed items are not enough to feed a person.

Today, between 70% and 80% of Cuba’s food is imported. This included the years when Cuba was heavily subsidized by the Soviet Union, and was part of the East Bloc. Since 2000, much of the food purchased by Havana has been imported from the United States. Despite this, rationing continued during the peak years (2011 – 2014) when the Cuban government received massive amounts of assistance from Venezuela’s Chavez regime.

Most chicken eaten in Cuba is imported from the United States, not grown in Cuba

Most chicken eaten in Cuba is imported from the United States, not grown in Cuba

Blame is often placed on economic sanctions, but the reality of the internal blockade, and communist agricultural methods are what drives the crisis in food production in Cuba. The Council on Hemispheric Affairs (COHA) in a December 12, 2016 article claiming that “Cuba, a Model of Sustainable Agriculture Towards Global Food Security” was due, in part, to the lack of commerce in agricultural machinery and blamed U.S. sanctions, but failed to mention the Cuban government rejecting the opening of a tractor factory a month earlier..

In mid-February 2016 the Obama administration gave “its approval to the first American factory in Cuba in more than 50 years”, and ABC News reported that “the move appears to have gained the support of the Cuban government as well.” Official communist publications Granma and Juventud Rebelde published stories praising the initiative. The US company Cleber LLC, the first company with 100% North American capital, was going to set up operations in Mariel to assemble Oggún tractors, designed for small farmers to make land in Cuba more productive. Ten months later in November 2016 Havana said no. Turned out that one of the owners of the company that would set up the factory, Saul Berenthal, was Cuban American, and in his enthusiasm Mr. Berenthal had reclaimed his Cuban citizenship. This exposed the reality of the Castro regime’s internal blockade. Average Cubans living on the island are not allowed to make large investments into businesses, and this led to the deal being rejected.

Marc Frank of Reuters reported on August 10, 2010 that “in Cuba’s long-centralized agriculture system, farmers must produce certain crops or livestock to sell back to the state at fixed prices in exchange for state-assigned supplies.” In the same article he divulged how “farmers and consumers complain the cumbersome system sometimes results in rotting crops and farmers going without timely supplies of animal feed, pesticides and fertilizer.”

Nearly 90,000 pounds of tomatoes rot in Cuba because Acopio, the state enterprise, fails to collect the crop, and farmers are barred from selling it. (ADNCuba)

Nearly 90,000 pounds of tomatoes rot in Cuba because Acopio, the state enterprise, fails to collect the crop, and farmers are barred from selling it. (ADNCuba)

Rotting crops cannot be blamed on economic sanctions, but inefficient centralized communist agricultural practices that prohibit market mechanisms to increase efficiency and deliver more food to Cubans. Diario de Cuba (DDC) ( March 18, 2021) and 14ymedio (June 15, 2021) have reported on rotting food crops due to the failures of the state enterprise, Acopio in picking them up on time.

Worse yet, farmers have no other option but to allow them to rot or risk fines and prison.

DDC’s March 18, 2021 article described how tomatoes, onions, cabbage and other vegetables were rotting, and efforts by farmers and other independent actors to get the crops to sell to Cubans resulted in detentions and fines. DDC interviewed Esteban Ajete Abascal, president of the League of Independent Farmers of Cuba in the article who said that “one of the farmers, in recent days, left with a truck of onions to try to sell them, and they stopped him at the checkpoint, just outside of San Diego de los Baños, and the head of the sector seized the entire truck of onions. Every time they try to leave, they are intercepted and the merchandise is taken away.”

The crop was different in the 14ymedio July 15, 2021 report, but the restrictions on individual initiative, and state failure to collect the crop were the same.

“We would have filled the cart (…) to go out to sell it, even in nearby neighborhoods, but we do not have the authorization,” complained this Monday the mango producer Ricardo Montaña Téllez, who had 130 boxes of the fruit without Acopio (the state enterprise) nor the municipal government of Camagüey doing anything to collect the harvest.

The reality is even worse than the claim made in the meme that the dictatorship confiscates what farmers harvest. The Cuban government confiscates part of what farmers harvest, and forces them to let the rest rot when state enterprises fail to collect the harvest.

Paradoxically, the Obama thaw with Cuba coincided with the expansion of military control of the Cuban economy. Liberalization of the Cuban agricultural sector occurred during times of crisis, for example the “free farmers’ markets in the 1980s, and the free agricultural markets after 1994” during the Special Period, and were repealed when the emergency passed.

Low domestic production in Cuba is due to the Cuban government and its failed communist agrarian policies that punish farmers. Message to Havana: Let Cuban farmers farm and take their harvest to market.

The Wall Street Journal, September 6, 2021

A Sanction Worth Lifting in Cuba

Under the island’s military dictatorship, it’s illegal to fish for dinner.

By Mary Anastasis O’Grady
Sept. 6, 2021 11:41 am ET

Fishermen row a homemade raft in Cojimar, Cuba, April 14, 2020. Photo: Ramon Espinosa/Associated Press

Fishermen row a homemade raft in Cojimar, Cuba, April 14, 2020. Photo: Ramon Espinosa/Associated Press

Reprisals carried out by storm troopers and secret police against participants in Cuba’s July 11 uprising have been widely condemned, including by President Biden. But the international left is trying to help Cuba’s military dictatorship recover from this public-relations disaster by blaming the U.S. for the island’s misery.

petition circulating among supporters of the regime calls on Mr. Biden to lift sanctions imposed by President Trump. The petition alleges that shortages of food and medicine are the fault of the sanctions, which have restricted the flow of dollars to Cuba. But the real reason for Cuban privation is totalitarianism.

The petition, titled “Let Cuba Live,” is aimed at recovering dollar flows to the regime. But it’s not a solution aimed at helping the Cuban people. “Let Cubans Fish”—as recommended by the Center for a Free Cuba in a July 29 brief—would be infinitely more beneficial.

This is no joke. A Caribbean sea teeming with marine life contains abundant protein. Yet it’s nearly impossible for Cubans legally to reel in dinner to feed their families. This is more proof, as if we needed it, that socialism is for morons.

Full article here ]

https://www.wsj.com/articles/sanction-cuba-fishing-communists-protests-dollar-remittance-let-cubans-live-petition-emily-mendrala-biden-administration-11630938612

Reuters, May 20, 2021

Americas

Analysis: Soaring international prices aggravate Cuban food crisis

By Marc Frank

An employee carries bread inside a bakery in Havana, Cuba, May 18, 2021. Picture taken on May 18, 2021. REUTERS/Alexandre Meneghini

An employee carries bread inside a bakery in Havana, Cuba, May 18, 2021. Picture taken on May 18, 2021. REUTERS/Alexandre Meneghini

Soaring international food and shipping prices and low domestic production are further squeezing import-dependent Cuba’s ability to feed its people.

Cuba traditionally imports by sea around 70% of the food it consumes, but tough U.S. sanctions and the pandemic, which has gutted tourism, have cut deeply into foreign exchange earnings.

For more than a year Cubans have endured long waiting lines and steep price rises in their search for everything from milk, butter, chicken and beans to rice, pasta and cooking oil. They have scavenged for scant produce at the market and collected dwindling World War II-style food rations.

This month the Communist-run government announced flour availability would be cut by 30% through July.

Diorgys Hernandez, general director of the food processing ministry, said when he announced the wheat shortage that “the financial costs involved in wheat shipments to the country” were partly to blame.

That was bad news for consumers who had been buying more bread to make up for having less rice, pasta and root vegetables at the dinner table.

“People eat a lot of bread and there is concern there is going to be a shortage of bread because that is what people eat the most,” Havana pensioner and cancer survivor Clara Diaz Delgado said as she waited in a food line.

Cuba does not grow wheat due to its subtropical climate. The price of the commodity was $280 per tonne in April, compared with $220 a year earlier.

The government has also said the sugar harvest was short of the planned 1.2 million tonnes by more than 30%, coming in at less than a million tonnes for the first time in more than a century.

Cuba will have trouble making up for a shortage of domestically produced sugar as international prices are around 70% higher than a year ago.

COST OF SHIPPING

Adding to the pain, the cost of international container shipping is up as much as 50% over the last year and bulk freight more.

The U.N. Food and Agriculture Organization reported its international food price index was up 30.8% through April compared with the same month last year, and the highest since May 2014.

The Cuban state has a monopoly on foreign trade and purchases around 15% of the food it imports from the United States for cash under a 2000 exception to the trade embargo.

John Kavulich, president of the U.S.-Cuba Trade and Economic Council, which follows the trade, said sales fell 36.6% last year to $163.4 million, compared with 2019. They recovered in the first quarter, reaching $69.6 million, though that represented less food due to higher prices.

Chicken, Cuba’s most important U.S. import, is badly affected. A U.S. businessman who sells chicken to Cuba said he shipped drumsticks at 24 cents a pound in January and 48 cents in April. He did not wish to be named.

“Resuming global demand, increased prices for product inputs and labor shortages suggest that commodity prices will not decrease soon,” Kavulich said.

The economy declined 11% last year and according to local economists contracted further during the first trimester of 2021 as a surge in the new coronavirus kept tourism shuttered and much of the country partially locked-down.

The government reported that foreign exchange earnings were just 55% of planned levels last year, while imports fell between 30% and 40%.

Incoming container traffic was down 20% through April, compared with last year, according to a source with access to the data, who requested anonymity.

The government has not published statistics for the notoriously inefficient and rustic agricultural sector since 2019 but scattered provincial and other reports on specific crops and livestock indicate substantial declines for rice, beans, pork, dairy and other Cuban fare.

This was confirmed by a local expert who requested anonymity and said output was down by double digits due to a lack of fuel and imported fertilizer and pesticides.

https://www.reuters.com/world/americas/soaring-international-prices-aggravate-cuban-food-crisis-2021-05-20/

In case you missed it.

Reuters, June 15, 2017

Cuban military’s tentacles reach deep into economy

By Marc Frank

HAVANA (Reuters) – American tourists strolling the ample squares and narrow streets of colonial Havana may not know it, but from novelist Ernest Hemingway’s famed Floridita bar to Sloppy Joe’s eatery, they are probably patronizing businesses owned by Cuba’s military.

It is that lucrative line of business that President Donald Trump will target when he rolls out his new Cuba policy Friday in Miami, the heart of the country’s hard-line exile community, according to U.S. officials who have seen a draft presidential memorandum.

Trump will significantly restrict U.S. companies from doing business with some military-linked enterprises, the officials said.

“Any ban on using military-owned tourism facilities would make it very difficult to bring groups larger than seven people because for logistical reasons you need to work with the government,” Collin Laverty, president of Cuba Educational Travel, said.

The number of Americans traveling to Cuba, mostly in large groups due to U.S. regulations, has nearly tripled in recent years and was expected to reach around 400,000 in 2017, according to U.S. travel agencies.

Trump’s expected limits on U.S. business deals will target the Armed Forces Business Enterprises Group (GAESA), a conglomerate involved in all sectors of the economy that is headed up by General Luis Alberto Rodriguez, reportedly President Raul Castro’s son-in-law.

That is bad news for the pro-engagement U.S. politicians and hundreds of businesses that flocked to Cuba in the last few years in search of new opportunities.

The only hotel deal struck to date may prove the last for now, at least in the capital. Starwood Hotels & Resorts Worldwide, which is owned by Marriott International Inc, signed on to manage a Gaviota hotel in Havana under the Sheraton brand which opened in 2016.

Gaviota is part of GAESA and tourism development projects in Havana and other choice locations are almost exclusively in its hands.

U.S. Gulf Coast ports and the Port of Virginia, which have signed letters of intent to work with the new Mariel container terminal, will most likely have to look elsewhere for shipping partners as it is controlled by Almacenes Universales, another GAESA company.

The terminal feeds a surrounding Chinese-style development zone which allows investors 100 percent ownership and which was visited by dozens of U.S. business delegations beginning in 2015, though no deals were signed. It also is controlled by Almacenes Universales.

GAESA does not run Cuba’s airports, or its cruise ship terminals, meaning U.S. airlines and cruise operators might not be directly impacted, but it does control the marinas.

All the state hotels, stores and eateries in colonial Old Havana are owned by Habaguanex, which was recently taken over from the city historian’s office by GAESA.

GAESA began modestly enough in the 1980s as an effort to bring modern management to the civilian sector mired in the ways of Soviet-style administration.

It has grown dramatically over the last decade since Raul Castro took over for his ailing and now deceased older brother, Fidel.

Today GAESA boasts dozens of companies that control anywhere from 40 percent to 60 percent of the Caribbean island’s foreign exchange earnings, according to Cuban economists.

GAESA’s books, like those of other state-run companies, are not public.

Some Cuba experts and diplomats believe the military is feathering its own nest and perhaps preparing to cash in if the government falls.

But others believe revenues flow to the cash-strapped state.

A former British ambassador to Cuba, Paul Hare, who lectures at Boston University’s Pardee School of Global Studies, said the military was viewed as a guardian of the Revolution.

“Their function is to ensure that private Cubans and foreign investors do not undermine the principles of ‘socialism’,” he said.

The holding company controls virtually all of the thousands of stores, supermarkets and malls in the country that sell imported products ranging from food and beverages to clothing and appliances, and hundreds of gas stations and eateries.

That means when you enter a shop in Cuba to purchase a bottle of water, soda or beer, you probably are patronizing a military establishment.

If you want to rent a condominium or satellite TV service, you have to go through a GAESA company.

The holding company also controls two banks and all credit card and money transfer transactions through Fincimex. RAFIN, the conglomerate’s mini hedge fund, owns shares in the telecommunications monopoly ETECSA.

https://www.reuters.com/article/us-usa-cuba-military/cuban-militarys-tentacles-reach-deep-into-economy-idUSKBN1962VK

Associated Press, September 9, 2016

Cuban military expands its economic empire under detente

By ANDREA RODRIGUEZ

September 9, 2016

HAVANA (AP) — At the height of Cuba’s post-Soviet economic crisis, a man with the obscure title of city historian began transforming Havana’s crumbling historic center block by block, polishing stone facades, replacing broken stained glass and repairing potholed streets.

Over a quarter century, Eusebio Leal turned Old Havana into a painstakingly restored colonial jewel, a tourist draw that brings in more than $170 million a year, according to the most recent available figures. His office became a center of power with unprecedented budgetary freedom from the island’s communist central government.

That independence is gone. Last month, the Cuban military took over the business operations of Leal’s City Historian’s Office, absorbing them into a business empire that has grown dramatically since the declaration of detente between the U.S. and Cuba on Dec. 17, 2014.

The military’s long-standing business wing, GAESA, assumed a higher profile after Gen. Raul Castro became president in 2008, positioning the armed forces as perhaps the prime beneficiary of a post-detente boom in tourism. Gaviota, the military’s tourism arm, is in the midst of a hotel building spree that outpaces projects under control of nominally civilian agencies like the Ministry of Tourism. The military-run Mariel port west of Havana has seen double-digit growth fueled largely by demand in the tourism sector. The armed forces this year took over the bank that does business with foreign companies, assuming control of most of Cuba’s day-to-day international financial transactions, according to a bank official.

“GAESA is wisely investing in the more international — and more lucrative — segments of the Cuban economy. This gives the military technocrats a strong stake in a more outwardly oriented and internationally competitive Cuba deeply integrated into global markets,” said Richard Feinberg, author of “Open for Business: The New Cuban Economy.”

Castro has never publicly explained his reasoning for giving so much economic power to the military, but the armed forces are widely seen in Cuba as efficient, fast-moving and relatively unscathed by the low-level payoffs and pilferage that plague so much of the government. Economic disruption also is viewed as a crucial national security issue while the government slowly loosens its once-total hold on economic activity and renews ties with its former Cold War enemy 90 miles to the north.

While U.S. President Barack Obama has said detente was meant partly to help ordinary Cubans develop economic independence from a centrally planned government that employs most of the island’s workers, the Cuban government says the U.S. should expect no change in Cuba because of normalization with the U.S.

The takeover of Old Havana shows how the Cuban government is, so far, successfully steering much of the peace dividend into military coffers.

The announcement nearly two years ago that the U.S. and Cuba were restoring diplomatic relations set off a tourism boom with Old Havana at its epicenter. The cobblestone streets are packed with tourists browsing souvenir stands, visiting museums and dining in trendy private restaurants. World figures and celebrities from Madonna to Mick Jagger to Pope Francis and Obama have all visited. Hotels are booked well through next year.

The largest business arm of the historian’s office, Habaguanex, named for a pre-Columbian indigenous chief, directly runs some 20 hotels and 30 stores and more than 25 restaurants in Old Havana.

Under a special exemption by the ruling Council of State, the office has been allowed to use its revenues as it sees fit rather than returning them to the national treasury and receiving a yearly budget allocation from the central government. That 1993 measure is widely credited for giving Leal the power and flexibility to restore Old Havana to international standards while much of the rest of Havana suffers from neglect that has left buildings collapsing and streets rutted with big potholes.

A towering figure in Cuba’s intellectual and political life, Leal, who turns 74 on Sept. 11, is often chosen to deliver meditations on Cuban history and culture at major public events. He has never groomed an obvious successor. He has appeared frail and thin in some recent public appearances and close associates say he has been receiving treatment for a serious illness.

“I’m giving up everything that I think should be, under current conditions, better directed,” Leal told The Associated Press when asked about the military takeover of his financial operations. “There’s a reality. I was trained and educated to work in cultural heritage, and that’s my calling.”

Through its economic wing, the blandly named Business Administration Group, the Cuban armed forces have become the nation’s biggest retailer, importer and hotelier. The military corporation Cimex, created two decades ago, counts retail stories, auto-rental businesses and even a recording studio among its holdings. The military retail chain TRD has hundreds of shops across Cuba that sell everything from soap to home electronics at prices often several times those in nearby countries. Gaviota has 62 hotels with 26,752 rooms across Cuba, pulling in some $700 million a year from more than 40 percent of the tourists who visit Cuba.

Cuba welcomed more than 3 million tourists last year, a nearly 20 percent rise over 2014.

“It’s obvious that the military has an economic power far beyond what’s needed for its national-security responsibilities,” said Arturo Lopez-Levy, a political science lecturer at the University of Texas-Rio Grande Valley.

The Cuban government did not respond to a request for comment on the military’s business operations.

The Business Administration Group, known by its Spanish acronym GAESA, formally took over the city historian’s office on Aug. 1, according to three employees with the office who spoke on condition of anonymity because they were not authorized to talk with the press.

“They’re going to carve everything up and it’ll be absorbed by military businesses that are already operating. The hotels go to Gaviota, the restaurants to Cimex and the stores to TRD,” said one of the officials.

Going forward, the historian’s office will be responsible only for cultural projects and will retain only the proceeds of museum entry fees and souvenir stores, officials told the AP.

“They’re going to impose discipline and probably it’ll function better that way,” said another official in the business wing of the historian’s office. “It will affect those of us on the business side, but I don’t think it will affect cultural projects. The Cuban military isn’t stupid.”

https://apnews.com/article/1a473ab397bb4868a4c1c4fae7f4a816