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ASIC 2014

Cuba:
A Once-Proud Coffee Industry Falls On Hard Times

BY LARRY LUXNER

When José Gaviña was a little boy, his family owned a farm at a place called Hacienda Buenos Aires, just south of Tope de Collantes in the central Cuban province of Las Villas.

About a third of the Gaviñas’ 390 acres was planted with coffee, and the operation included both a dry and wet mill. Since Cuban coffee was highly sought after, the family business to flourished.

“Whatever we exported would get a premium over the world market, and most of our coffee went to Holland and Germany,” recalled Gaviña. “We didn’t sell to the U.S., because the Americans wouldn’t pay the price at the time. It was much better to sell the coffee domestically.”

Then economic disaster struck. In 1959, Fidel Castro and his band of guerrillas overthrew the Batista dictatorship and promptly began nationalizing all Cuban industries. The Gaviña family farm was confiscated in 1960 and then 14-year-old José Gaviña and his parents - as well as hundreds of thousands of other middle-class and wealthy Cubans - fled the island, eventually ending up in the United States.

Since the Revolution, the Cuban coffee industry has never been the same. Observations made during a recent four-day trip to the island and interviews with officials - government bureaucrats, foreign diplomats and industry sources - all lead to the conclusion that when it comes to putting Cuba on the world coffee map, the Marxists have really blown it.

“The industry is completely destroyed,” says Gaviña, now based in Los Angeles. “The only good coffee that’s coming out of Cuba these days is being exported to Europe. Before the revolution, most of the good-quality coffee stayed in Cuba. We had a very high per-capita consumption, and today there isn’t even enough to go around.”

According to historians, coffee was introduced into Cuba in the mid-18th century. At that time, forests still covered most of the island, creating the necessary environment of high humidity, undisturbed soils and fresh climate. These early coffee farms, supplanted by African slave labor, gradually spread over the western plains and smooth hills around Havana, the capital. By 1790, Cuba was already exporting 185,000 quintales a year to Spain. Later on, carried by French farmers fleeing the revolution in nearby Haiti, coffee farms expanded to cover the nearby mountain ranges.

By the 1820s, coffee production was an integral part of the Cuban economy, certainly more important than sugar. Between 1831 to 1835, Cuba’s average coffee output was equivalent to 56% of the output of the best years of the 20th century (1956 to 1960), whereas sugar production in the early 1800s barely reached 1% of the level it achieved 150 years later.

Yet throughout the latter half of the 19th century, the Cuban coffee sector went through some dramatic ups and downs, and by 1877, only 192 coffee plantations were in production, down from 2,067 only 50 years earlier. This was partly due to disruptions caused by Cuba’s battle for independence against the Spanish colonizers. Yet by 1895, production was once again up, and in that year, 153,800 quintales were exported.

In 1902, the year Cuban patriot José Martí declared independence from Spain, coffee production was once again undergoing a drastic reduction in favor of sugar cane and tobacco, though the imposition of tariffs in 1927 - mainly against Puerto Rico - sparked a rebirth. From 1900 to 1925, imports averaged 12,000 tons annually, though in the 1930s imports virtually disappeared and Cuba gradually began to export coffee. By 1956, the country was exporting over 20,000 metric tons of coffee beans valued at $21.5 million. In 1962, thanks to agricultural and industrial improvements, Cuba’s coffee industry achieved a yield of 316.6 pounds per acre, its highest ever. Unfortunately for Cuba, the Marxist revolution that swept Castro into power occurred at a time when coffee production was at its peak. During the 1950s, the industry’s average rate of growth was 1.7% a year, in spite of a poor harvest in 1958 that was most likely related to the escalation of guerrilla activity by Castro’s band of revolutionaries in the Sierra Maestra, Cuba’s principal coffee-growing area.

Following Castro’s nationalization of the country’s coffee farms and everything else that had been in private hands, the Cuban coffee industry entered into a long and severe period of decline. The Communist government imposed new rules, and by the end of the 1960s, coffee output had fallen to levels comparable to the 1930s; by the mid-70s, the results were at levels similar to the dismal 1920s.

Finally, in the late 70s, a slight recovery began, and about 45,000 hectares were planted with coffee between 1979 and 1982. The effort was aimed at reducing imports - which by then had surpassed 30,000 tons annually - and to increase exports, which accounted for nearly half of the total harvest in those years.

The 1990 collapse of the Soviet Union, Cuba’s main benefactor, devastated the Cuban economy and encouraged massive emigration to the cities, which only hastened the coffee sector’s further decline. Average coffee yield had fallen to 135.7 pounds per acre by the early 90s, and mountain dwellers were fleeing to Havana, Santiago de Cuba, Holguín and other cities at a rate of more than 4% annually. In spite of the building of hundreds of kilometers of new roads and the introduction of electricity, good schools and modern medical care to even the most remote areas, coffee areas rapidly became depopulated and plantations were abandoned. But experts say the Soviet collapse wasn’t the only factor. A misguided campaign in the early 1960s had tried to create a coffee belt around Havana’s barren plains, using volunteer labor exclusively.

“Despite the advice of specialists - and common sense - the project consumed millions of dollars before it was abandoned. Meanwhile, traditional farms in the mountains received less attention,” reported the newsletter CubaNews in January 1996. “In an effort to stimulate production, the government unveiled the so-called Turquino Plan under the direct supervision of Raúl Castro in 1989. Again, the agricultural infrastructure was improved, but even after building new homes for agricultural workers, the project attracted little response.”

From 1986 to 1996, coffee exports averaged 12,600 tons a year, compared to only 11,200 tons exported in 1957 when the output totaled 43,600 tons. However, poor harvests in the late 1990s have taken their toll on exports, falling from 24,120 tons in 1994 to 6,400 tons in 1997 and recovering slightly to 8,400 tons in 1998. Today, export revenue from coffee comes to just 1% of the total value of Cuban exports, down from 3.9% in 1956.

“The loss of experienced workers has forced the government to rely on unpaid middle- and high-school students to harvest the coffee crop,” reports CubaNews. “During the harvest, tens of thousands of students go into the mountains for several weeks to pick coffee. While they are reportedly earnest in their efforts, their lack of experience and stamina is one reason the sector continues to languish.”

The difficulty in increasing coffee production has been the main reason the Castro regime cannot seem to boost exports significantly, though it manages to maintain exports partly by limiting coffee consumption among Cubans through rationing. And while Cubita-brand coffee sells for $6.10 a kilo in the dollar markets, the majority of Cubans don’t have access to dollars and are therefore forced to make do with their ration of two ounces of coffee every two weeks per adult.

“While exporting its highest-quality coffee to Europe and Japan, the government reportedly imports cheaper coffee and mixes it with lower-quality domestic grades and some roasted wheat to supply local demand,” says CubaNews. “Rationing and low availability of coffee reportedly have driven annual per-capita domestic consumption down from 12 pounds in the late 1950s to just three pounds now.”



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