The agricultural consultants at the Dutch embassy in Havana see new opportunities for Dutch agricultural exports to Cuba, now that the country announced a comprehensive package of economic measures last month.
The announced package of economic measures is a response to the deep economic crisis Cuba is currently experiencing. This crisis has worsened considerably due to the COVID-19 pandemic.
Even before the COVID-19 pandemic, Cuba was in a very difficult economic situation. The collapse of the tourism sector and disruptions in foreign purchases have only worsened the economic situation. This has a direct impact on the food supply of the Cuban population.
For decades now, food shortages have existed under the inefficient centrally planned agriculture and food distribution system, and these shortages have only increased due to the corona crisis. For basic foodstuffs such as chicken, rice, and cooking oil, Cubans often have to stand in line for hours, and many struggle to meet their most basic needs. Many of the new measures are therefore focused on agriculture and food supply.
Most of these measures have frequently been recommended by economists in the past but were always rejected by Fidel Castro's regime. The current critical situation has prompted their implementation now. The overall trend of the measures is to give more space to private enterprise and is aimed at generating more foreign currency. With these currencies, the Cuban government can then import essential goods for the population.
The most notable measures for agriculture and food supply include the abolition of the state monopoly on the distribution of agricultural and food products, legal recognition of the Small and Medium Enterprises (SMEs), and the possibility for private companies to import and export (albeit through state companies). Additionally, better credit provision to farmers will be facilitated through a newly established agro-bank, as well as tax benefits for farmers with export potential.
Furthermore, the 'hated' ten percent tax on payments in (American) dollars has now been abolished. According to official sources, this abolition alone led to a 200% increase in currency exchanges and a 195% rise in foreign currency bank accounts in the first week.
Foreign experts in Havana are generally positive about the measures. Especially for entrepreneurs in the agricultural sector, many new opportunities could arise. However, they do raise concerns about the requirement that private companies (for now) can only import or export through state companies.
The easing of export and import restrictions and the ability to trade in foreign currency could also open new opportunities for Dutch agro-companies, for example exporters of beer, dairy, and suppliers for the agriculture and horticulture sectors, according to the agricultural team in Havana.