I see that our President is seeking help from Cuba for our sugar
industry. It’s a most unusual and incompetent thing to do in view of the
following:
Wikipedia tells us that “Cuba was once the world’s
largest sugar exporter. Until the 1960s, the US received 33% of their
sugar imports from Cuba. During the cold war, Cuba’s sugar exports were
bought with subsidies from the Soviet Union. After the collapse of this
trade arrangement, coinciding with a collapse in sugar prices, two
thirds of sugar mills in Cuba closed and 100 000 workers lost their
jobs. And the sugar production in the cane sugar mills has fallen from
approximately 8 million metric tons to 3.2 million metric tons in the
2015 period. A rise in sugar prices beginning in 2008, stimulated new
interest in sugar. Production in 2012-2013 was estimated at 1.6-1.8
million tonnes. 400,000 tonnes is exported to China and 550,000-700,000
for domestic consumption.” In other words they have, like Guyana, become
uncompetitive sugar producers at around 22 cents a pound, whilst the
world market prices continue to be around 17 cents a pound. In a paper
written by Jorge Salazar-Carrillo entitled ‘The Collapse of the Cuban
Sugar Industry: An Economic Autopsy’ we are informed that in Cuba
dominated by the Soviet dominated Council of Mutual Economic Assistance
(CMEA) “Cuba would provide the majority of the sugar required by the
USSR’s member states, with a plan to increase production up to 14
million tons by the beginning of the 1980s. While this goal was never
reached, production in 1989 reached 7.58 million tons. However this
level of production was predicated on large subsidies of oil and
equipment from the Soviet Union. This, coupled with the Soviet style
‘gigantism’ (i.e. huge areas of land under one administration) and large
quantities of fertilizer, pesticides, etc. in use, resulted in the
Cuban sugar industry becoming highly inefficient. The goal prior to 1989
was simply increased production via any means, rather than seeking to
increase it by greater efficiency.” This sounds very familiar to me.
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