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Sugar Appears on Rebound in Cuba

December 7, 1995

LA LOTERIA COOPERATIVE, Cuba (AP) _ The name ``Hershey″ hangs on the aging train station near here. It comes from before Fidel Castro’s 1959 revolution, when U.S. companies dominated Cuba’s sugar industry.

A Soviet-built tractor with a dead battery stands on a sun-baked rise to ease push-starting. It evokes the fall of the Soviet Union that pushed Cuba’s communist economy into an era of shortages and crisis in 1990.

Now Cuba is hoping that a third era, mixing socialism with the open market, can end four years of disastrously declining sugar production.

Officials say they expect the coming sugar harvest to reverse that decline, helped by new profit incentives for workers and by foreign financing that has provided fertilizer in quantities unseen since perhaps 1991.

``This year, all of the fertilizer needed has been bought,″ said Alberto Ribalta of the Sugar Ministry. ``With the loss of the socialist camp, it had been reduced almost to zero.″

Foreign and Cuban experts have projected the winter harvest at up to 4.5 million metric tons _ low by historic standards, but a healthy increase from last year’s 3.3 million tons.

In pre-crisis years, Cuba often produced between 6 million and 7.5 million tons a year.

At the 220-acre La Loteria cooperative, director Luis Miguel Aguiar says production could hit 145,000 tons, up from 118,000 last year.

Sugar has been the main engine of Cuba’s economy throughout the century, though tourism has surpassed it in gross earnings for the past year or so.

Stripped of aid and trade from the Soviet Union, Cuba’s sugar industry floundered _ as did the rest of the economy, which relies on earnings from sugar exports to pay for oil, food and other goods.

Cuba tried mass-scale organic farming, turned to oxen in place of fuel-starved tractors and extended the harvest season to 95 from 60 days _ all to little apparent result.

In fact, the long harvests disrupted the growing cycle. Experts say some of the sugar cane cut this year will be immature, holding back sugar output.

Shortages of parts meant breakdowns at sugar mills, making it hard to quickly process the cane, which loses its sweetness rapidly after it is cut.

Cuba needs a modest increase just to break even. It still owes sugar from past harvests to trading partners like China and it must pay back the money it borrowed to finance the new crop, estimated between $115 million and $200 million at 12 percent to 18 percent interest.

At the higher estimate, ``it takes almost a million tons of sugar at world prices″ to pay off the loans, said Andrew Zimbalist, a specialist in the Cuban economy at Smith College in Northampton, Mass.

Cuban officials also have committed 1 million tons to Russia in exchange for about 21 million barrels of oil this year.

Cuba’s leadership is so eager to boost sugar output that it abandoned its cherished system of state farms in 1993, turning virtually all of its 4.4 million acres of sugar plantations into cooperatives whose members share in any profits.

So far, profits seem elusive. But sugar workers get special certificates based on performance that let them spend their pesos on goods normally available only for dollars or at far higher prices in pesos.

At a store in the old Hershey compound, workers with certificates can buy Cuban-made bicycles for 555 pesos (about $22 at the free-market exchange rate). Many earn about 80 pesos worth of certificates a month.

Shelves are stocked with cooking oil, canned meats and tomatoes, soap and toothpaste _ all hard to get for most Cubans.

``It’s a way to stabilize the work force,″ said Ribalta, the Sugar Ministry official. ``Why go to the city if you have everything here?″

At this fully mechanized cooperative, manager Aguiar said the 140 members managed to lay off some white-collar workers and carry out the harvest with only a little help from family members during the peak harvest season.

``I think a man has more interest when the resources are his own,″ said Aguiar, whose tattered shirt and trousers testified to his hands-on management. ``Starting this year, with the financing and with the labor force stability, the results probably will be greater.″

Cuba’s struggle can also be seen in the rows of potato, bean and rice fields that abut the cane, as well as the chickens and goats penned across the dirt road from Aguiar’s office.

``Two years ago, the state had to bring all the food we used,″ Aguiar said. ``Now we produce it all, except for salt and (processed) sugar.″

He said members had just received an allotment of 25 pounds of potatoes apiece _ some of which apparently can be swapped for other goods. And the cooperative had produced 45 tons of rice, some of which was scattered on nearby pavement to dry.

End Adv for Tue PMs, Dec. 12

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