Cuban economic reforms replace muddy field with wholesale market

Cuban economic reforms replace muddy field with wholesale market



HAVANA, Cuba -- Two years ago, an ad-hoc wholesale produce market

appeared on the outskirts of Havana. Vehicles of every size and shape

from old American flatbeds to heavy-wheeled Russian hulks would converge

at nightfall on an often muddy field where they jockeyed for position.



Driver and helper would then proceed to sell onions, pineapples, papayas

and lettuce from the backs of their trucks to a varied clientele.

Pushcart vendors, vegetable stand dealers, and restaurant and cafeteria

owners would jostle their way through the crowd looking for the best

deal and then haul away their purchases by wheelbarrow, bicycle and car.

More than a few carried sacks of fresh produce over their shoulders.



Fast forward to December 2013; in the days before Christmas, both

produce sellers and buyers got an early present: a brand new wholesale

market venue, El Trigal, also on the outskirts of the capital.



Gone are the muddy field, lettuce wilting under the sun and sacks of

rice soaked by a sudden downpour.



From now on, business would be conducted in an enormous, well-lit

terminal run by ten men in bright red tee-shirts with the word

"cooperative" blazoned across the back.

El Trigal market is not just a new form of commercializing agricultural

products. The market itself is something new to have emerged from the

economic reforms being rolled out by President Raul Castro. It's one of

a still limited number of non-agricultural cooperatives approved by the

government that previously controlled all food distribution.



"This is providing a solution to the problem that farmers have been

complaining about, that when their harvests surpassed the amount

contracted by the government they didn't have anywhere to market the

excess, to sell wholesale," Claudio Sabron, one of the cooperative

members told CBS News just three nights after the market opened its doors.



Sabron and his nine equal partners, each of whom invested 1,200 Cuban

pesos to whip the building into shape, buy equipment and set the

operation in motion, also hope that it will become a profitable source

of income for their families.

The cooperative leases the premises from the State that retains

ownership of the property; but the workers run it, pay operating costs

and taxes and keep the profits. Sabron lists the cooperative's basic

expenses as including rent for the premises, taxes, electricity, wages

for three contracted workers to help run the place and fuel for the

modern forklift they've leased from the State. But he believes that cost

can be reduced by using the lift and other items efficiently and that

at the end of the year profits will be good.



"It will be a good incentive and encourage [us] to work. If a man who

is, as I said, putting in 18 hour days, is really compensated for what

he has put into this cooperative so that he can see another form, a new

form, of earning a living," said Sabron, who thinks that model will make

the market successful.



That reasoning is just what the government hopes will come out of

relinquishing State control over many establishments that were running

at a loss because workers had no interest in whether or not the ventures

were profitable.



Just over 200 small to medium-size state businesses running the gamut

from restaurants to produce markets to transportation were selected for

the experiment that got off the ground this year.



The official view is that cooperatives are a more social form of

production that private businesses and therefore will receive

preferential treatment with respect to taxes and other fees. The

government also is making credits available to cooperatives, credits

denied private business owners.



"We had to all contribute money, initial capital for this venture. It's

not a straitjacket, that is the working capital that the partners agree

to. But we each had to put in the same amount. But the State gives us

the facility to ask for a bank credit to complete the necessary capital

and get started and then the money we take in will be used to pay off

the bank loan. And once we're free of that debt we will recover our

initial investment with the profits that we begin to make," Sabron

explained.



This might all sound like Economics 101 to Americans. But it's a whole

new ball game in Cuba, where for more than half a century the State has

had a monopoly on nearly every aspect of the economy right down to shoe

repair shops and beauty parlors.



Operating independently of the government and state businesses, the

cooperatives, like El Trigal, will lease state property and equipment at

ten-year renewable intervals, operate on a market basis and divide

profits among members who would then be taxed on their income.



Sabron notes that when CBS visited the market it had only been in

operation for three days. So it was hard to evaluate just how much the

coop members would earn. But he said they would begin estimating yearly

earnings based on the monthly income.



The money will come from various sources. Vendors pay 120 Cuban pesos

(CUP) a night for the space where they display and sell their produce.

Buyers pay a 3 CUP entrance fee and can rent a large wheeled hand cart

for five CUP an hour to haul their purchases from the terminal to where

their transport is parked.



The coop can also rent space to licensed private businesses that would

provide services to both vendors and buyers. Already lined up are a

private cafeteria, restaurant, pizzeria and cane sugar juice stand that

will open shortly. Sabron points out that there is also space for a

carpenter and other workmen whose services might be needed in the 14

hours that the market is open nightly, from 6 p.m. to 8 a.m. Monday

through Friday.



"We won't earn a salary," said Sabron. "It's not a fixed salary because

one month I might earn 1,500 CUP and another month it could be up to

2,000 CUP. It will all depend on how much the cooperative takes in after

expenses and on how capable the cooperative is in providing services and

in reducing costs," he concluded.



The co-op members are hoping to attract a lot of sellers and buyers.



"The market is designed basically for selling wholesale. Everyone can

come here. No one is going to ask if buyers have a license to run a

business, if they are pushcart vendors or have a vegetable stand. Even

public health, sports and educational institutions can shop here.

Whoever wants to buy wholesale in bulk quantities can come here," he

told CBS News.



Wholesale markets serving the new private sector are still in short

supply but the opening of this market is being taken as a positive sign.

It both provides farmers with another place to market their produce and

represents another step in the State's shedding of responsibilities and

giving an opportunity to individuals, in this case in a cooperative, to

earn more than they would at a public sector job even if it means

working longer hours and working harder.



The crucial element is that the ten members of the cooperative feel they

are building something that is theirs and the more successful they make

it, the better their lives will be.



Source: "Cuban economic reforms replace muddy field with wholesale

market - CBS News" -

http://www.cbsnews.com/news/cuban-economic-reforms-replace-muddy-field-with-wholesale-market/