Florida Farm Bureau_ Feb 20_ 2002 by lonyoo

VIEWS: 8 PAGES: 25

									PROSPECTS FOR CUBAN AGRICULTURAL TRADE
Presentation to The S-287 Conference May 23, 2002 – San Antonio, TX
by William A. Messina, Jr. Department of Food and Resource Economics Institute of Food and Agricultural Sciences University of Florida

U.S.-CUBA RELATIONS – AN INTERESTING POLICY MIX
 Castro  Cooperativization  Capitalism  Cargill  Cash

of Agriculture

???

for Corn  Credit ???  Carter

KEY POINTS REGARDING CUBA:
 CUBA


IS A LARGE ISLAND

 HISTORICAL


IMPORTANCE OF AGRICULTURE IN
GENERATING EXPORT EARNINGS  FEEDING THE POPULACE  PROVIDING EMPLOYMENT

ABOUT THREE-QUARTERS AS LARGE AS FLORIDA WITH A LARGE PROPORTION OF ARABLE LAND

AGRICULTURE AND THE CUBAN ECONOMY – 1920 TO 1959




AGRICULTURAL EXPORTS PROVIDED OVER 90% OF CUBA’S TOTAL EXPORT EARNINGS SUGAR ALONE REPRESENTED OVER 75% OF TOTAL EXPORT EARNINGS AND NEARLY 85% OF AGRICULTURAL EXPORTS

Cuban Exports for the period1920 to 1959

Sugar Other Ag. Non-Agricultural

CUBA’S TRADING PARTNERS 1958 AND 1966
United States Other Non-Communist USSR Other Communist
Total Imports (million) Total Exports (million)

1958 68% 30% 1% 1% $777 $734

1966 -24% 50% 26% $900 $640

BEFORE THE FALL . . .
CUBAN TRADE (Millions of Cuban pesos)
EXPORTS 5,415 IMPORTS 7,417 YEAR 1990 1991 1992 1993 1994 TOTAL 12,832

1995
1996 1997

1998
1999
SOURCE: Anuario Estadistico de Cuba, various issues

THE DECLINE BEGINS
CUBAN TRADE (Millions of Cuban pesos)
EXPORTS 5,415 2,979 IMPORTS 7,417 4,234 YEAR 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
SOURCE: Anuario Estadistico de Cuba, various issues

TOTAL 12,832 7,213

REACHING ROCK BOTTOM
CUBAN TRADE (Millions of Cuban pesos)
EXPORTS 5,415 2,979 1,779 1,157 IMPORTS 7,417 4,234 2,315 2,008 YEAR 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
SOURCE: Anuario Estadistico de Cuba, various issues

TOTAL 12,832 7,213 4,094 3,165

CUBAN TRADE (Millions of Cuban pesos)
YEAR 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 EXPORTS 5,415 2,979 1,779 1,157 1,331 1,492 1,849 1,819 1,512 1,456 IMPORTS 7,417 4,234 2,315 2,008 2,017 2,882 3,481 3,987 4,181 4,323 TOTAL 12,832 7,213 4,094 3,165 3,348 4,374 5,330 5,806 5,693 5,779

A SLOW RECOVERY

SOURCE: Anuario Estadistico de Cuba, various issues

STRUCTURAL CHANGES IN CUBAN AGRICULTURE DURING THE “SPECIAL PERIOD”
of State Farms into Production Cooperatives (UBPCs) in 1993 ? ?
 Dismantling

RATION STORES

STRUCTURAL CHANGES IN CUBAN AGRICULTURE DURING THE “SPECIAL PERIOD”
of State Farms into Production Cooperatives (UBPCs) in 1993  Opening of Agricultural Markets in 1994 ?
 Dismantling

AGRICULTURAL MARKETS

STRUCTURAL CHANGES IN CUBAN AGRICULTURE DURING THE “SPECIAL PERIOD”
of State Farms into Production Cooperatives (UBPCs) in 1993  Opening of Agricultural Markets in 1994  Foreign Investment in Agriculture
 Dismantling

Cuba’s agricultural sector “leading the way” in the transition toward a more market-oriented economy
HOWEVER:  Policy changes ended in 1994  Internal rigidities remain that hinder increased foreign investment  Labor contract system  Limited purchasing power restricts opportunities for domestic sales  Future expropriations???

DEVELOPMENTS IN 2000
2000 – President Clinton signs legislation allowing U.S. companies to sell ag. products (and fertilizer) and medicine to Cuba  Cuban government responds that they won’t purchase “one penny’s worth” of these goods from the United States
 October,

DEVELOPMENTS IN 2001
2001 – Following the terrorist attacks on the United States, a dramatic decline in tourism to Cuba, depriving the Cuban economy of much needed revenue  November, 2001 – Hurricane Michelle hits Cuba doing significant damage to Cuban agriculture
 September,

DEVELOPMENTS IN 2001
November, 2001 – Immediately following the Hurricane, the United States offers emergency food aid  Cuban government responds that they don’t need aid but they would like to be able to buy food from the Unites States  By the end of 2001, U.S. companies have shipped over $30 million in food and agricultural products to Cuba (and been paid in cash)


DEVELOPMENTS IN 2002
2002 – Cuban officials meet with USDA representatives to discuss sanitary/phytosanitary issues related to food and agricultural sales  March, 2002 – Cuban government signs a new round of contracts to buy $32 million of food from U.S. firms  May 2002 – Visit of former President Jimmy Carter
 January

CUBA’S IMPORT PATTERNS 1989 AND 1999
(million pesos)
Ag. and Food Imports Total Imports Ag. & Food as % of total
RICE FATS

1989 1,029 8,124 12.7%

1999 826 4,323 19.1%

Most important food imports, 1999:
& OILS WHEAT & PRODUCTS BEANS OTHER GRAINS

THE FUTURE
 Cuban

agriculture has tremendous productive potential
 Sugar
 Citrus

and Tropical Fruit  Marine and Seafood Products

 Vegetables

THE FUTURE
Significant investment will be necessary for Cuban agriculture to recover, to purchase:  Inputs  Spare parts  New equipment  Acquire new technology!!!  Internal ability of the Cuban government to commit capital is limited


THE FUTURE
Under current conditions, relatively limited additional foreign investment may be expected in the near term  While some recovery in agricultural production has been experienced since 1993/94, the prospects for major recovery and/or expansion of Cuban agriculture are limited


THE FUTURE
Cuba is clearly a market of some
significance, with much latent demand Limited effective demand as measured in terms of ability to pay, both at the consumer and government levels Expanding Tourist sector

Decline in tourist travel since Sept. 11 ? Change in policy by the Cuban government
following Hurricane Michelle – How long will it last???

U.S. INTERESTS SECTION, HAVANA

(THE LARGEST FOREIGN
DELEGATION IN CUBA)


For additional information on Cuba’s agricultural sector go to

www.cubanag.ifas.ufl.edu


								
To top