In March, the interannual variation of the Consumer Price Index (CPI) was 46.42. It is likely that the “thermal sensation” on this indicator for Cubans could be even more extreme.
In that same month, the interannual variation of the price index corresponding to food products reached 75.07, the highest of all the divisions of products and services established by the National Office of Statistics and Information.
If we look at the behavior of the index in the other divisions, it is evident that food prices have been decisive in the variation of the general CPI.
Achieving greater production and supply of food seems to be a necessary condition to advance in macroeconomic stabilization. Although it is almost a truism, it seems that it is worth repeating it over and over again.
The advance of the macroeconomic stabilization program, theoretical guarantee of the reduction and control of inflation, will only be successful if its different causes are addressed, in which many Cuban economists agree: supply shock, demand shock, oversizing of the bureaucratic apparatus of the State, fiscal management and various others identified and explained on multiple occasions.
It is not possible to sustain a stabilization program that fails to control inflation, that does not promote an increase in supply, that does not make it possible to recover idle productive capacities, that does not achieve greater efficiency in investments and improve the efficiency of its execution, that does not promote, facilitate and encourage an increasingly complementary economic fabric with the consequent improvement in systemic efficiency and achieve foreign investment flows that offset the external financial restriction that the country has suffered for decades.
The supply shock operates like a shuttle that multiplies the inflationary spiral and increases uncertainty. But if we look at the spending structure of the Cuban family then, we should focus on that part of the supply that is made up of food.
That is why one of the vectors of this main direction is food production. It is something that all Cubans see, even those who, for various reasons, suffer less from that scourge that is perpetual shortages and queues, every day and every minute.
Perhaps that would be enough, but there is also an abundance of data that allows us to corroborate it and, above all, to understand that rare experience of verifying year after year the perpetuity of the provisional.
It is true that the food supply in Cuba has never satisfied the effective demand even when it has allowed covering the nutritional requirements indicated by international organizations for several years.
Food production is the most sensitive part of the offer. It has had a sustained downward trend for several years.
In agricultural production, what is planned for 2023, even when it exceeds the estimate for 2022, is significantly far from what was achieved in 2019, practically in all the decisive items:
At least a part of the behavior of the prices of these products is explained by this sustained negative of the national production.
While industrial food production combines the deficits of national agricultural production and import limitations.
This illustrates the supply shock but above all speaks of the accumulated physical deficits and the magnitude of the effort that must be made in terms of investment and inputs to break the trend of systematic decline in industrial food production. It’s not correcting a year’s behavior.
Prioritizing the supply of food must go through agricultural production. And for this you need, among other things:
- Guarantee adequate levels of investment in technologies that allow for increased yields and make up for the workforce deficit. Investment in the agricultural sector only reached 2.78% of the total investment made between 2017 and 2021.
- Allocate resources to increase the production/import of essential inputs (fertilizers, herbicides, pesticides), for example, of the 315,000 tons of fertilizers planned in 2022, only 30,200 tons were delivered.
- Facilitate the access of the rural sector to these resources (credits, advances, payments without delays).
- Accelerate the delivery of idle land to usufructuaries, MSMEs and cooperatives. At the end of 2022, 217,477 hectares remained idle and the delay in the processing of files is part of the problem.
- Enforce the provisions of the legislation regarding the maintenance of uncultivated land.
- Make the negotiation processes with foreign investment more flexible and agile.
- It would be very useful to review these 63 measures and its more than 500 actions approved more than a year ago and concentrate them on a few that bring the sector closer to the strategic direction defined by the country’s leadership more quickly.
It happens that producing agri-food also requires time. A sector so damaged does not recover in months.
The other alternative to increase the supply of food is to import. The behavior of imports of these products has been as follows:
The figures for 2022 are not yet public. By the year 2023, 1,648 million dollars have been allocated to import food that support what we call “basic basket”. That is, around 80% of what was allocated in 2021, with higher prices that reduce purchasing power by at least 227 million dollars.
Joining efforts is essential. Everything that is done in your favor, even the most modest, counts. And in this effort to take better advantage of the potential of the non-state sector seems more than necessary, strategic.
Go from the slogan to the results because time continues to be the scarcest resource and the stomach the most sensitive of all the organs of the human body. And because the provisional —the queues— are not perpetual.
