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Cuba Will Make Record Purchases of U.S. Foodstuffs

Havana is depending more and more on American suppliers for many of the staples its people receive in their monthly rations.

August 04, 2004|Carol J. Williams | Times Staff Writer

HAVANA — Despite U.S. efforts to strangle the flow of dollars to Cuba and fresh exchanges of acrimony between Presidents Bush and Fidel Castro, the cash-strapped Cuban government intends to make record U.S. food purchases this year, according to its chief international shopper.

"By the end of August, Cuba will have purchased in eight months as much as it did in the whole previous year," said Pedro Alvarez, head of Alimport, the government's food procurement enterprise.

Cash purchases of U.S. food have grown exponentially since November 2001, when hurricane-ravaged Cuba began taking advantage of the first breach of a trade embargo imposed in 1960 and maintained through 10 successive U.S. presidencies. Cuban purchases from what is now the nation's biggest food supplier, already nearing the $300-million mark by the end of July, are set to exceed $440 million this year, Alvarez said in an interview.

That would represent at least a 25% increase over last year's purchases from U.S. producers. More significant, say analysts in both countries, the expanding food trade represents broader spending by the Cuban government on vital staples for the monthly food ration on which most in this country of 11.2 million depend for survival.

More than 95% of Havana's purchases have been commodities such as wheat, corn, poultry and soybeans, said John Kavulich of the private U.S.-Cuba Trade and Economic Council.

Kavulich, whose council evaluates commercial activity between the two countries, said he remained skeptical of the upward purchasing trend. "The Cuban government has one remaining tool with which to lobby in the United States, and that is its food and agricultural purchases," he said, adding that the commercial environment has been "unnecessarily and excessively politicized."

Cuba's continuing dependence on the U.S. market also may reflect a greater degree of pragmatism among Cuban officials and those from predominantly Republican U.S. farm states than has been evident at the highest levels of their countries, where bitter rhetoric loudly emanates.

During a campaign visit to Florida last month, Bush accused Castro of turning Cuba into "a major destination for sex tourism," an apparent attempt to besmirch the country's 13% boost in tourist revenue last year.

Castro, branding Bush "a sinister character that keeps threatening, insulting and slandering us," fired back during his speech last week on the 51st anniversary of the start of his revolution, contending that the president suffers mental disorders from two decades of excessive drinking.

The Communist government's commitment to U.S. food purchases probably is driven less by politics than need. A three-year drought has steadily eroded domestic food supplies, especially meat and dairy products, exacerbating shortages that U.S. analysts say were caused by the inefficiencies of a centrally plan- ned economy.

The government has concentrated its dollar spending on the most cost-effective and highest-quality markets -- those in the U.S. -- to obtain staples for public food rations, Alvarez said.

Officials of the ministries for foreign affairs and foreign economic relations declined to specify how much less dollar cash they would have as a consequence of new U.S. regulations limiting remittances and family visits.

The measures, which took effect July 1, could cut $200 million out of Cuba's budget for dollar purchases, some U.S. economists have said. But government spending plans for food will be unaffected, officials here said.

What has been hurt, they noted, is the individual Cuban family's spending power, as prices in state-run dollar stores have been increased as much as 30% in response to the Bush administration's new measures.

Goods at the state-run dollar stores already were marked up 240% over cost, suggesting the price increases will force those with access to dollars to spend more for the same goods so government earnings remain stable.

Torrential rains swept much of Cuba over the weekend, but the effects of a prolonged drought have been little alleviated, said Leandro Bermudez of the National Institute of Hydrological Resources in Holguin, one of the most water-starved provinces.

"The rain is good, but it doesn't reverse the damage from three years of rainfall deficits. We're still suffering a drought of historic proportions," Bermudez said, adding that more than 12,000 cattle have died from lack of water and desiccated fodder.

Cuba has purchased $20 million worth of powdered milk from U.S. commodities brokers, according to Alimport figures, but still too little to fill the gap created by a 20% drop in domestic production. Vegetable and sugar-cane cultivation also have suffered from the dearth of water.

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