Cuba to let farmers sell directly to hotels

Cuba: Cuban farmers will be allowed to sell their crops directly to hotels and other tourist enterprises for the first time in decades under a reform that goes into effect next month, state media said Monday.

The reform, part of an overhaul of Cuba’s Soviet-style economy, also allows farmers to take their products to market themselves.

Currently, a state-run entity has a monopoly on the sale and distribution of agricultural produce, setting prices and production volumes at the start of each harvest.

The system has led to complaints over the years that crops were slow to reach market and rotted along the way due to inefficient marketing and distribution.

Granma, the official communist party newspaper, said direct sales have been authorized in resolutions issued by the central bank and the ministries of finance and prices, agriculture and tourism.

The reforms, which go into effect December 1, are aimed at cutting losses by simplifying marketing links between producers and consumers, it said.

Additionally, it permits them to “develop mechanisms to supply tourist entities and take better advantage of the potential of all forms of local means of production,” Granma said.

Since succeeding his older brother Fidel Castro as president five years ago, Raul Castro has cleared the way for a series of reforms, authorizing individuals to establish small business and buy and sell homes and cars for the first time in 50 years.

“Prices will be set by agreements between each party and always in Cuban pesos,” the newspaper said. In the island there is also a convertible peso, known as CUC, pegged to the US dollar. Each convertible peso is currently valued at 24 Cuban pesos.

Nevertheless, Granma noted that the changes “do not replace the existing system,” but rather represent “an additional option” to supply the tourist industry more efficiently.

Tourism has been the engine of Cuba’s economy since the Soviet Union collapsed in the early 1990s and ended its generous assistance.

Today it is the country’s second source of foreign exchange after professional services, pulling in some $2 billion a year.

The reforms are also aimed at increasing Cuban food production, which the president has said is of “strategic” importance.

Cuba currently imports 80 percent of its foodstuff at a cost of 1.5 billion a year, a heavy burden on the country’s meager budget.

Havana, Tuesday, AFP