Ricardo A. Puerta, Avanced Trading Corporation and José Alvarez, University of Florida [1]

Part I.

I. Introduction

The structural changes taking place in Cuba's agricultural sector after the 1959 revolution have captured the attention of researchers both on the island and abroad.[2] The demise of the Soviet Union and the collapse of socialism in the Eastern European countries have placed Cuba at a crossroads. Expected changes may include new economic policies leading to economic liberalization and less State intervention.

The agricultural sector will undoubtedly play a major role in any such changes for a number of reasons. First, it is the most important sector and the cornerstone for revitalizing the Cuban economy. Second, it will be the main source to gradually alleviate and eventually resolve the food scarcity present during more than thirty years of rationing. Third, given its proximity to the United States and because of its climate, Cuba could be expected to be an important potential exporter of tropical fruits and vegetables to the U.S. market (VanSickle and Messina, 1992). On the negative side, the expectations of the Cuban exiles who equate privatization with property restitution may result in a confrontation with Cuban producers who have farmed those lands for decades. Finally, of great interest and adding a new dimension to the "special period in time of peace," Cuban agriculture has become more "sustainable" by applying less fertilizers and chemicals to the land.

In addition, agriculture is the only sector in the Cuban economy with different levels of State intervention after more than three decades of collectivization. Analyzing its organization and performance at those levels may provide useful insights on its potential for evolving into a more market-oriented economy.[3] Questions that come to mind when thinking about this issue include:

How many less-State-controlled producers are there?

Are they organized?

How much land do they farm?

Do they have equal access to all factors of production, inputs, and technical assistance?

Can they hire labor?

Do they have access to new technology and credit?

Do they benefit from new investments?

In simple terms, are they playing on a level field?

How much do they contribute to total output?

Do they show a productivity higher than State farms?

Would they respond to market incentives?

This paper intends to provide answers to these questions.[4] The main hypothesis of this study is that, as the State control decreases in agricultural production units, the quantity and quality of output increases despite a decreasing access to factors of production and other resources.⁵ The general assumption is that all forms of Cuban agricultural production are, with varying degrees, under direct control of the State and that none of the units can be considered truly private.

II. Brief Historical Background

Up to 1959, most activities of Cuban agriculture took place under a market economy. Being the pivotal sector of the economy, agriculture was to experience drastic and continuing changes under the new leadership.[6] The 1959 revolution changed the system of private ownership of land. Although most authors only cite the two Agrarian Reform Laws enacted after 1959, the agrarian revolution originated in the Sierra Maestra when Law No. 3 of the Rebel Army was promulgated in November 1958, with land to be given to those who cultivated it.

Domínguez (1978) states that, prior to 1959, only less than a tenth of the peasants were without any legal claim to the land they tilled. These squatters were mainly concentrated in the province of Oriente --the focal point of Castro's guerrilla warfare. And he adds:

This more or less accidental event brought the leaders of the revolution in contact with what was essentially an atypical rural dweller. The revolutionary government's policies in 1959 and thereafter were influenced by this experience, a fact that explains why so much of their early legislation was devoted to solving the problems of Cuba's few squatters, while the many more peasants who were not squatters and the even more numerous agricultural workers received less government attention. The early experiences of the revolutionary leadership distorted the new government's agrarian policies for several years, and were one reason for the striking differences between the rural revolution in the 1950s and the rural counterrevolution in the 1960s (pp. 423-424).

Although this issue is later explained at length by Domínguez (1978, pp. 435-445), he acknowledges that the 1959 Agrarian Reform Law had not broken up the large cattle ranches and sugar plantations, which were inappropriately designated as cooperatives (p. 447). Thomas (1971, pp. 1216-1217) explains that Castro had changed his mind by the time of the 1959 Agrarian Reform Law. He already believed that rather than dividing latifundios into small plots (that would decrease production), they should be organized under State control.[7] Perhaps there was a political reason behind that change. Policies that support the family farmer and truly private cooperatives have always had more potential for political differentiation than converting a salaried worker or a farmer into an agricultural laborer of a State-run enterprise. For land distribution purposes, the landless peasants were in reality the rural proletariat and, as they amounted to nearly 400,000 workers in sugarcane alone, they represented a powerful political weapon.

Two other Agrarian Reform Laws were subsequently enacted which represented a drastic change from the original idea of massive land distribution. Emphasis fell first on State intervention on expropriated lands, and then on depriving the remaining private farms of the right to hire salaried workers.

The first law was enacted in May 1959. It proscribed the latifundia[8] and initially distributed some land and encouraged the development of cooperatives on large estates. Cooperative directors were to be appointed by the National Institute of Agrarian Reform (INRA), and members would receive a salary as an advanced payment of their annual profits (Alvarez, 1990, p. 102). Most of these cooperatives, however, were truly State farms by 1962.

In May 1961, the National Association of Small Farmers (ANAP) was established with membership restricted to farmers with fewer than 67 ha and larger farmers who had proven allegiance to the revolution. ANAP's conflicting roles include: (a) being a pressure group to promote and advance its members' self-interest; and (b) being a mass organization for the government and Communist Party, reflecting Lenin's thesis for politicizing the civil society. A pressure group cannot go beyond the means and goals previously authorized by the government --the modus operandi of "democratic centralism" in a command economy.[9]

A second Agrarian Reform Law, enacted in October 1963, expropriated the land of farmers with more than 67 ha. The reasons behind this new law were twofold: (a) the socialist nature of the revolution had advanced more in other sectors of the economy and the previous limit on land ownership became unacceptable; and (b) the rural bourgeois was in contradiction with the revolutionary process and even helping armed groups fighting the government (Aranda, 1968, p. 189).

Most of the land expropriated in the 1959 law belonged to foreign companies and large Cuban owners, while the 1963 law impacted only medium-size Cuban farmers. An interesting and important fact, sometimes overlooked in the literature, is that, after the 1959 Agrarian Reform Law, Cuban farmers prepared themselves for subsequent, more restrictive legislation following two main surviving strategies. Large owners divided their remaining lands into smaller farms, using relatives and extended family members as "legitimate owners" of legally accepted size units. Some of them assumed a predatory attitude vis-à-vis available resources, knowing that, sooner or later, they might leave the country. But the majority did not. Medium- and small-size owners duplicated the experiences of other countries such as Russia, China and Viet Nam, by deepening themselves into the peasant economy. By doing so, they used the peasant economy as a refugee sector intended primarily for self-protection and survival. These farmers did not leave the country.

Data in the book of a Chilean economist who worked eight years in Cuba seem to support the previous statements. Aranda (1968) contains statistics from the National Planning Board (JUCEPLAN) that show 165,866 "private" production units with up to 405 ha in 1961 with a total of about 4 million ha (p. 190), for an average of 24 ha per farm; and also figures from the July 1965 census that show 199,207 "private" producers with a total of 2.69 million ha (p. 147), for an average of 13.5 ha per farm. In summary: (a) The difference between the 165,866 production units in 1961 and the 199,207 "private" producers in 1965 represent an extra 33,341 producers, for an increase of 20 percent but, at the same time, (b) total farm area decreased by 32 percent, and (c) average farm size decreased by 43 percent. The figures confirm that farmers anticipated the enactment of the 1963 law by reinforcing and expanding the peasant economy where common law prevails over statute law.

Forster (1989) describes the predatory and restraining aspects of that attitude in the following way:

During the early years of the revolution as they faced expropriation, large farmers decapitalized their holdings, failed to maintain irrigation and machinery, slaughtered their animal herds, and otherwise adversely affected production for years to come. Even after the 1963 Agrarian Reform, it is likely that farmers in the remaining private sector were hesitant to invest heavily until they were sure that they too would not be expropriated (p. 239).

Cuban newspapers and magazines contain numerous accounts of the existing antagonism between semi-private farmers and the State.[10] Domínguez states that "theoreticians often suggest that peasants owning small farms are more likely than others to collaborate with the government, but this pattern is only rarely demonstrable" (1979, p. 463). Cuba is not an exception.[11] Cuban farmers and their family members typically did not leave the country,[12] and instead remained on their lands, and fought changes with shrewd anticipation to survive in a hostile environment.[13] By doing so, they were just corroborating Shanin's analysis of the Russian peasantry's behavior under the threat of Stalinist collectivization when the peasant class, despite previous classic predictions, became a more cohesive one (Shanin, 1983).[14] This is reflected in the current forms of organization of Cuba's agricultural production units.

III. Organization of Production

Agricultural production presently takes place under four different forms that show varying degrees of State intervention (Table 1).[15] The State sector comprises large State farms. The non-State sector includes "the Cooperatives of Agricultural Production (CPA), the Cooperatives of Credit and Services (CCS) and, finally, the dispersed small private producers who establish commitments with the State regarding the sale of agricultural products" (Comité Estatal de Estadísticas, 1991, p. 178).

The Cooperatives of Agricultural Production (CPA) are defined as "a superior form of collective production of social property which were started after the farmers' decision to join their lands and other fundamental means of production" (Comité Estatal de Estadísticas, 1991, p. 178).

Table 1. Main characteristics of the four official forms of agricultural production in Cuba from more- to less-controlled enterprises.

STATE SECTOR

State Farms

-Under the Ministry of Agriculture (MINAGRI) or the Ministry of the Sugar Industry (MINAZ).

-Social ownership. Wage earners. Priority for inputs, technical assistance, credit, investments, new technology, etc.

-Enterprises: agriculture, cattle, forestry, agroindustrial complexes (CAI) in sugar and rice.

-All sales to the State procurement agency (acopio).

-Concentrated housing and social services as incentives to workers.

NON-STATE SECTOR

Cooperatives of Agricultural Production (CPA)

A "superior form of production"

-Collective ownership.

-State land and machinery.

-Established "freely" by farmers' decisions.

-Join lands and other means of production.

-Products belong to the cooperative.

-Salary is advanced payment.

-Benefits in services, not in cash.

-Most sales to the State (acopio).

Cooperatives of Credit and Services (CCS)

"Primary organizations"

-Collective nature.

-Assets belong to the State.

-Facilitate common use of infrastructure (irrigation, warehouses, etc.), equipment and services (credit and technical assistance).

-Individual property of the farm.

-Private production without hired labor.

-Most sales to the State (acopio).

Dispersed (separated) Producers

"Traditional form of production (chaotic and anarchic)"

-Controlled inputs.

-Own investment plan.

-Own production without hired labor: subsistence=> barter=> sales.

-Some sales to State (Exceptions: at the farm in the 1970s and at the free farmers' markets in the early 1980s).

___________________________________________________________________________________

Source: Summarized mainly from Comité Estatal de Estadísticas (1991, p. 178) and other Cuban sources. The origins and reasons for establishing the CPAs are described by Benjamin et al. (1986). The decision to push cooperatives was made in 1975 when the government realized that "the small farmers were not pulling their own weight, producing far below their potential while burdening the government with the cost of low interest credits, crop insurance, and social services" (p. 175). CPAs were also seen "as a way of increasing productivity through smaller government investments" since State farms had shown that "huge investments in such inputs as irrigation and machinery were slow to pay off" (pp. 175-176).

Official statistics reveal interesting insights about the evolution of CPAs (Table 2). Except for tobacco, which shows a steady decrease in the number of CPAs, the remaining crops have experienced ups and downs, and all show a decline from 1987 to 1989. Similar trends are observed in the remaining indicators (area, number of members, average ha/coop, and number of members per coop), with the exception of ha/member which has remained relatively constant since 1985 at about 14 ha.[16]

The Cooperatives of Credit and Services (CCS) are "primary organizations of a collective nature that allow the public use of irrigation, some facilities, services and other means, as well as the transacting of their credits, although the property of each farm, its equipment and resulting production remains private" (Comité Estatal de Estadísticas, 1991, p. 178).

Finally, the "dispersed" (separated) farmers are those who work their lands with family labor, follow ANAP's planting and production plans, and deliver an assigned share of their production to the State procurement agency (acopio). These farmers control 3.4 percent of the total agricultural land, have restricted access to some factors of production and inputs, but produce a large share of several agricultural commodities.

In summary, there are State farms, CPAs, CCSs, and small dispersed semi-private farmers. The previous categories reflect the State intervention in descending order but the use of four different groups is a source of confusion that needs to be elucidated or at least addressed.

The breakdown most commonly used in official Cuban statistics includes the State and non-State sectors:[17]

State Sector Non-State Sector

State farms CPAs

CCSs

Dispersed farmers

However, a difference is made between the socialist and the private sectors:[18]

Socialist Sector Private Sector

State farms CCSs

CPAs Dispersed farmers

Table 2. Selected indicators of the Cooperatives of Agricultural Production (CPA) in Cuba, selected years 1980-89.

                              Year
Item       1980      1981     1982      1983      1985      1987      1989
____________________________________________________________________________
Number
Sugarcane  314       348       431       441       422       432       411
Tobacco    262       233       222       230       212       206       197
Coffee     130       199       283       290       266       271       266
Other      329       348       480       511       478       509       479
Total    1,035     1,128     1,416     1,472     1,378     1,418     1,353
Area	   213       383       690       938     1,009       977       876
(1,000 ha) 
# Mem-  29,535    39,519    63,285    82,611    69,896    69,604    63,838
bers
Average    206       340       488       637       732       689       648
ha/CPA
Members     29        35        45        56        51        49        47
/CPA(#) 
Ha/member    7.1       9.7      10.8      11.4      14.3      14.1    13.8
____________________________________________________________________________

Source: Comité Estatal de Estadísticas (1991, p. 184); "Other"
and "Ha/member" based on calculations by the authors.	

In essence, all four forms of production are subjected to the power of the State, whose interference decreases (but does not end) from State farms to dispersed farmers: State farms ==> CPAs ==> CCSs ==> Dispersed farmers.

The National Association of Small Farmers (ANAP), has evolved throughout the years to become a quasi-governmental organization (See Puerta and Alvarez, 1993, p. 13). Domínguez has explained the origins and evolution of ANAP in the following manner:

The revolutionary government sought to bring political order and social equality to the countryside by abolishing their many competitive rural political organizations and replacing them with the single... ANAP, in which political and ideological merit rather than wealth or social status would determine political leadership and access to power. This association, unlike the other mass organizations in the early 1960s, looked after the interests of its members, lobbying vigorously on their behalf among the other offices of the state. The expansion of the power of the state into the countryside in subsequent years curtailed ANAP's autonomy and adaptability, turning it into an extension of a government whose policies a majority of the peasantry continued to resist even into the 1970s. In particular, most peasants stubbornly opposed government programs that required them to surrender the right to decide how their land would be used, a resistance that remains to the present day (1978, p. 424).

Although not truly independent, ANAP is still the only Cuban association with a semi-private sector component. Its membership surpassed 200,000 in the past and accounted for almost one-third of the economically active rural population.[19]

IV. Structure of Land Distribution and Use

Total area of Cuban agricultural units has experienced a continuous expansion (Table 3). From 1973 to 1989, the area increased from about 9 million ha to slightly over 11 million ha, an equivalent of 24 percent, distributed as follows:[20] six percent in agricultural lands (from an increase of nine percent in farmed land and a decrease of three percent in non-farmed land), and the remaining 18 percent in non-agricultural lands (a nine percent boost in both forest and land devoted to other purposes). The former coincides with the expansion of military enclaves protected by forestry areas. The latter is due primarily to the expansion of housing facilities and services in the countryside, a process intended to concentrate the rural population within the boundaries of productive units. As an urbanization program, it represents an innovative national effort to develop rural areas, achieving better results than the Rumanian case.

Following the official breakdowns, the total of slightly over 11 million hectares of Cuban land is distributed in the following manner: the State sector controls 82.3 percent while the non-State sector controls the remaining 17.7 percent. Using the socialist versus "private" sector breakdown, the socialist sector accounts for 90.2 percent while the remaining 9.8 percent is in "private" hands. In terms of non-agricultural land, the State sector controls 95 percent of the total, while the non-State sector controls only five percent (Table 4).

The land use within each type of agricultural organization unveils an interesting fact (Table 4). Dividing the amount of farmed land over total agricultural land provides a parameter that measures the intensity of land use. The State occupies the first place with 68.4 percent followed by dispersed farmers with 63.3 percent, then by CPAs with 58.4 percent and, finally, by CCSs with 50.6 percent. This differential usage should be kept in mind since the State controls the best available lands, as explained in the following section.

Go to Part II