The agricultural consultants at the Dutch embassy in Havana see new opportunities for Dutch agricultural exports to Cuba, now that the country announced a radical package of economic measures last month.
The announced package of economic measures is a response to the deep economic crisis in which Cuba is currently experiencing. The covid-19 pandemic has made that crisis much worse.
Even before the COVID19 pandemic, Cuba was in a very difficult economic situation. The collapse of the tourism industry and distortions from foreign purchases have only worsened the economic situation. This has a direct impact on the food supply of the Cuban population.
Food scarcity has already existed for decades under the inefficient centrally managed agriculture and food distribution system, but the corona crisis has only increased this. For standard foods like chicken, rice and cooking oil, Cubans often have to queue for hours and many of them struggle to meet their most basic necessities. Many of the new measures therefore focus on agriculture and food supply.
Most measures have often been recommended by economists in the past but have always been rejected by the Fidel Castro regime. The current critical situation has meant that they are now being introduced. The general tendency of the measures is to give more leeway to private initiatives and to generate more foreign exchange. With this currency, the Cuban government can then import essential goods for the population.
The most striking measures for agriculture and food supply are the lifting of the state monopoly on the distribution of agricultural and food products, legal recognition of Small and Medium Enterprises (SMEs) and the possibility for private companies to import and export (admittedly via state-owned companies). There will also be better lending to farmers through a new agro-bank to be set up, as well as tax benefits for farmers with export potential.
The 'hated' ten percent tax on payments in (US) dollars has also been abolished. According to official sources, the abolition led to an increase of 200% in currency changes in the first week alone, and an increase of 195% in foreign currency bank accounts.
Foreign experts in Havana are generally positive about the measures. Many new opportunities would arise, especially for entrepreneurs in the agricultural sector. They do, however, have reservations about the requirement that private companies can (still?) Only import or export via state-owned companies.
The easing of export and import and the possibility to trade in foreign currency can also lead to new opportunities for Dutch agro-companies, for example exporters of beer, dairy and suppliers for agriculture and horticulture, the agriculture team in Havana reports.