HAVANA, Aug 17 2005 (IPS) — Cuba’s food imports will total 1.7 billion dollars this year – up 400 million dollars from last year – as the chronic shortfall in domestic food production was further aggravated by extreme weather conditions.
The severe ongoing drought in the country’s eastern provinces has had a particularly heavy impact on the agriculture and livestock sectors.
At the same time, however, Cuba’s buying power has been boosted by the injection of hard currency into the economy resulting from such monetary measures as removing the U.S. dollar from circulation within the country and replacing it with a domestic convertible currency, the CUC.
“The process of exchanging U.S. dollars for CUCs and the centralisation of the hard currency funds from all state-owned companies have significantly contributed to the availability of hard currency,” commented a researcher who asked for his name not to be used.
Pedro Alvarez, director of ALIMPORT, the state-run company that handles the bulk of Cuba’s food imports, announced that the socialist island nation would be spending roughly 400 million dollars more on food imports this year than in 2004.
On Wednesday, Alvarez bid farewell to the governor of the midwestern U.S. state of Nebraska, Dave Heineman, who visited the island at the head of a 10-member trade delegation.
One of the results of this visit was an agreement for Cuba to purchase 17 million dollars worth of agricultural goods from the state’s farmers.
U.S. sales of food to Cuba were authorised in 2001 as an exception to the trade embargo that Washington has maintained for over four decades against the government of Fidel Castro.
Although this trade runs in only one direction – since exports from Cuba to the United States are still prohibited – and all transactions must be made on a cash-only basis, Cuban food imports from the United States totalled 175.8 million dollars in 2002 and rose to 474 million in 2004.
This past March, however, Washington enforced a new rule by which all food shipments must be fully paid for in cash before they can leave port in the United States.
As a result, this year’s purchases from U.S. exporters “will not grow by as much as we would have liked,” said Alvarez, although they will nonetheless amount to between 450 and 500 million dollars.
In 2004, one third of all Cuba’s food imports came from the United States.
The main U.S. agricultural exports to Cuba include corn, wheat, flour, soybeans, soy oil, rice and chicken.
Cuban authorities stress that almost all of the food purchased from the United States is distributed through the state-subsidised ration stores, where limited quantities of staple foods are sold in regular Cuban pesos, the currency earned by the vast majority of workers.
Only two to three percent of U.S. imports are sold in the country’s state-run hard currency supermarkets, where products can be bought in unlimited amounts, but the prices are steeply hiked up over the original purchase cost.
The profits earned through sales in these hard currency establishments go towards supplying the ration stores with food products sold at extremely low subsidised prices, but in strictly limited quantities.
Another significant source of imports, particularly as of this year, is Venezuela, which is already the island’s main supplier of crude oil and petroleum derivatives, with total bilateral trade expected to reach three billion dollars in 2005.
In May, the two countries signed an agreement whereby Cuba will purchase an initial 412 million dollars worth of foodstuffs and other products from Venezuela.
Meanwhile, in July, an agreement was signed with Argentina under which Cuba will provide the South American nation with medicines and medical equipment, in exchange for agricultural products like beef, chicken, fish, dairy products and cereals.
Cuba’s domestic food production has been especially hard hit in the eastern provinces of Guantánamo, Granma, Santiago de Cuba, Las Tunas and Holguín, and the central province of Camagüey, which have been suffering severe drought since 2003.
The severity of the resulting food shortages led the United Nations World Food Programme (WFP) to launch an emergency food aid operation in June, which will benefit a total of 773,000 people in these provinces.
The WFP project complements a programme initiated by the Cuban government at the beginning of the year to provide extra food rations to the most vulnerable families in the region.