Food imports put Cuban reforms at risk

HAVANA, July 28 (UPI) -- High food imports are putting Cuban economic reforms at risk because of the drain they pose on foreign exchange resources.

The government sounded warnings about rising food commodities import bills after it emerged that while Vietnam, the lead exporter, saw earnings rise from rice sales to Cuba, Havana's cash-strapped state trade sector wasn't too pleased about the situation.

Cuban President Raul Castro has been exhorting Cubans to become self-reliant and has laid off of tens of thousands of government employees to cut state spending and signal his readiness to accept a gradual shift toward a market-oriented economy.

Cubans catapulted out of state employment were told to become self-employed and start anew as merchants and entrepreneurs.

State curbs on buying and selling in the marketplace were eased and Cubans were told they could buy and sell real estate. The rule change that has sent the fledgling market economy into a subdued frenzy as would-be property tycoons begin to hone their skills in a fast-changing business environment.

However, government statistics indicated the food import bill was a major worry. Cuba imports up to 60 percent of rice it consumes and, by the latest count, bought more than 400,000 tons of the commodity to meet basic needs, Juventud Rebelde newspaper reported.

The import bill is set to rise as domestic demand for the staple grain this year is likely to exceed that level and may reach 600,000 tons to meet the basic needs of Cuba's population of 11.2 million.

Despite numerous moves to relax state control on food distribution and supply, Cubans depend on rationing to fulfill basic needs for rice and other consumables.

Grain Research Institute Director Telce Gonzalez said self-sufficiency in food was crucial to Cuba's economic well-being.

"The first challenge is to produce what we need," he said, adding that, although Cuban agriculture expanded areas under rice cultivation, it still had a long way to go to realize that goal.

This year, the government will need to import almost double the quantity of rice it produces for domestic consumption, new estimates indicated.

Vietnam is Cuba's main supplier of rice. Neither side has disclosed the terms under which Cuba buys rice from Vietnam, a socialist nation in an advanced stage of transformation into a market economy.

The prospect of the state trade sector having to pay more for imports sent the government into overdrive this month. There were calls to institutions to galvanize rice farmers to produce more and reduce dependence on imports.

The campaign aims at raising awareness of about 50 varieties of the grain that can be grown in the island's different ecosystems for maximum rice yield.

Cuba's agriculture suffered when it lost export markets as they ditched communism and switched to capitalist options, or cut imports with the collapse of the Soviet Union in 1991.

The government frequently has set targets to boost rice production and reduce dependence on imports but has missed reaching any of the goals.