An “Inexplicable” Problem
By Reinaldo Escobar
Translating Cuba - 14ymedio
January 14, 2016

In recent days, after the “threat” suggested by General President Raul Castro that there would be price controls on agricultural products, the official media have been generous with reports and analysis about the rising prices and sudden shortages. We collected opinions from the protagonists – producers, vendors and consumers – to shine a light on the absence of a compelling elucidation, supported by arguments that would explain a phenomenon like this occurring in a “scientific” economic system.

Everything seems to indicate that it is not possible to achieve a “peaceful coexistence” between the socialist system of production and a form of production and trade that responds to the rules of supply and demand.

As far as is known, no tomato grower has been forced to throw his harvest to the pigs because he can’t sell it at the price demanded. In the markets in Havana and in many of the provincial capitals, there are always enough customers with the necessary purchasing power to acquire, literally by the sack, everything that is on display in the stalls.

Playing with numbers difficult to confirm but easy to imagine, it is calculated that 10% of the economically active population enjoys 80% of the products and services sold. This means that the remaining 90% will have to settle for 20% of what appears in the markets. This, obviously, generates shortages and rising prices.

What is produced and sold under the rules of the market will be absorbed, for the most part, by those who produce and sell within that system, without their feeling compelled to refuse the crumbs from the ration market or any of the subsidized public services.

The rest, sometimes call the working class or other names – the “people” or “ordinary Cubans” – are obliged to acquire their most basic necessities, those not supplied in the ‘basic market basket’ from the ration system, from the TRDs – initials that, literally, stand for “Hard Currency Collection Stores” – and the agricultural markets. Every peso rise in prices in either place means an irreparable loss to the family table, unless you have recourse to “the diversion of resources” (i.e. taking things home from your workplace, for your own use or to sell to others), “the struggle” (more or less the same thing), or “invention” (also the same thing), or any other euphemism that masks the commission of a minor crime.

Farmers know that if they produce double they would have to market their products at half the price, which means working harder to earn the same. Barbers who can’t keep up charging one convertible peso for each haircut, or snack shop owners who sell soft drinks in front of their establishments, can only raise their prices. That six-Cuban-peso cheese pizza that solved the problem of lunch in early 2007 is now only a memory. A closed circuit of prosperity has taken shape, where those excluded are state employees who are not stealing, retired people without family abroad, unsuccessful entrepreneurs, and those who depend on social security.

The emerging Cuban middle class has a particular vision on how to replenish “the expenditures of socially necessary labor” in their hectic work, far from the state’s criteria, cemented in the belief that the rationed and subsidized basic market basket allows it to reproduce the salaried workforce under its control.

The promised solution to the problem, announced outside the program in the last session of the National Assembly, so far has been represented only by a couple of “calls” to produce more, launched by the National Association of Small Farmers (ANAP) and the agricultural workers union. Faced with the empty food stalls and the little signs with their inflated prices, many wonder why, if this was the solution, they didn’t call for it much earlier.

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