Cuba freezes prices

published: Wednesday | October 1, 2008

Cuban President Raul Castro - File

Cuba announced price freezes at all farmers markets on Monday, promising to punish any vendors charging more for hard-to-find fruits and vegetables as food reserves dwindle due to the destruction caused by hurricanes Gustav and Ike.

A decree occupying the entire front pages of state-run newspapers said prices at agricultural markets will remain fixed at levels set by regional communist committees, and that supply-and-demand farmers' markets will have prices revert to pre-hurricane levels "for a group of basic products".

The Government also warned of a crackdown on those who steal food and construction materials from work and sell them on the black market, a common practice in Cuba, which is plagued by shortages from cement to breakfast cereal. "Any attempt to violate the law or social norms will be met with a quick and energetic answer," it said.

The move seemed aimed at reassuring Cubans that basic food prices will not rise even though the storms ravaged 30 per cent of the island's crops and officials have warned of food shortages that could last six months.

An informal survey by an AP reporter of farmers' markets in Havana found prices for basics, such as rice, taro root, black beans, bananas, sweet potatoes and mangos did not increase after the storms, though state television says government inspectors have shut down dozens of produce stands for raising prices as supplies dwindle.

Basic fruits

And while farmers' markets still have most basic fruits and vegetables, the quantities are smaller than last month.

Nearly all Cubans work for the Government and earn average monthly salaries of 408 pesos, US$19.50. They get a modest amount of subsidised food on a monthly ration, and turn to farmers' markets for fruits and vegetables.

"It's good they are taking these steps. At least they won't raise prices," said Kenia Gonzalez, a Havana street sweeper who earns 255 pesos, about US$12 monthly. "It's a relief because prices are already very high and the money isn't enough for anything."

The farmers' markets were set up in 1994 to assuage widespread hunger following the Soviet Union's collapse. Small producers and cooperatives sell on a supply-and-demand basis any produce they have left over after meeting state production quotas. The state and the military's Youth Work Army also sell items at small neighbourhood markets.

Scepticism

The announcement was met with some scepticism by Cubans already outraged that private transportation costs have soared since the Government raised gasolene prices September 8 - the same day Ike tore across the island.

A litre of regular gas jumped about US 60 cents to US$1.45, making the price per gallon about US$5.50.

The increase was particularly high considering Cuba gets nearly 100,000 barrels from Venezuela daily on preferential terms.

"Price have already gone up," said Susana Delgado, a 40-year-old office worker. "They say there will be more punishments, but they have been saying that for dozens of years and everything stays the same."

Shoppers hunting for rice at a military-run farmers' market at Havana's Revolution Plaza one recent morning immediately formed a line when a cart loaded with the grain arrived at one stall.

"They have rice!" exclaimed a young man, springing into line. "There's none anywhere else."

The stall's vendor, wearing a red T-shirt and a sweat-stained olive-green soldier's cap, said giving his name to a foreign reporter could cost him his job.

"They just brought this, you saw it," he said. "Tomorrow, who knows if there will be rice."