The Out-of-Control Scale of Cuba’s Food Crisis
HAVANA TIMES – On June 21, President Miguel Díaz-Canel surprised Cubans by announcing the elimination of price caps on chicken, cooking oil, and other essential foods.
The surprise was that practically no one on the island even remembered those price controls still existed—not even many of the officials responsible for enforcing them. Just days before the president’s announcement, in a radio interview, Camagüey municipal administrator Lázaro Echevarría repeatedly confused the official maximum prices for those same products, unintentionally confirming that the regulation had become little more than a bureaucratic formality. For example, chicken, which by law was not supposed to sell for more than 312 pesos per pound, was already selling for 450 pesos or more, while a liter of cooking oil, whose price cap was set at 990 pesos, was being sold for between 1,300 and 1,400 pesos.
To understand the weak purchasing power of Cubans, it is worth noting that the monthly minimum wage in Cuba will rise to 3,200 pesos on August 1. Basic pensions will increase to 3,056 pesos per month. Both amount to less than US $5.
It was already a difficult situation, but nothing comparable to what has unfolded over the past month following the liberalization of prices.
Although the price caps were routinely ignored, they still served as a benchmark that merchants generally tried not to stray too far from. But taking advantage of the deregulation, the private sector began sharply increasing the prices of the most sought-after consumer goods in a process that shows no signs of slowing down.
Since June 21, the price of cooking oil has doubled, chicken and ground meat have increased by more than 50 percent, and rice, beans, and soap have risen by an average of between 20 and 50 percent. The impact has been especially severe because, over the past several years, the private sector has gradually become the country’s main supplier of basic necessities.
The seriousness with which Díaz-Canel invoked the “principles of social justice” that were supposedly to guide the elimination of price controls was almost tragicomic. For Cubans, there is no greater concern than access to food, yet there is no issue on which the authorities demonstrate more starkly both their inability to govern and their disconnect from reality.
No One Left Behind?
Chicken is the main source of animal protein available to Cubans, while vegetable oil is their principal source of dietary fat. Both are staple foods in a diet that has been shrinking for years and is now set to contract even further with the elimination of the ration book.
The cancellation of the subsidized food distribution system was the other surprise contained in Díaz-Canel’s June 21 speech. A few brief remarks and the president’s promise that it would be replaced by a system that “subsidizes people, not products” were all that marked the farewell to the ration book, which since 1963 had been the cornerstone of family budgets in Cuba.
Raúl Castro first proposed eliminating it in late 2010 during the nationwide consultations held before the Sixth Congress of the Communist Party. At that time, however, the population’s overwhelming rejection forced him to scale back his plans, opting instead for the gradual reduction of rationed products in the hope that, eventually, consumers would stop noticing their disappearance.
Guided by the same incomprehensible logic that led it to launch the “Monetary Ordering Task” reforms in the middle of the pandemic, Cuba’s leadership has now decided that this is the ideal moment to eliminate the ration book—the last major social safety net remaining in the country.
Yet despite spending more than fifteen years promoting this radical adjustment, the authorities still appear to have no strategy for implementing it. Not even Prime Minister Manuel Marrero, who is formally responsible for leading the process, has explained how it will unfold.
In early July, during a session of the National Assembly’s Social Affairs Commission, Marrero placed much of the responsibility on local governments, which, he said, will have to determine which individuals and families deserve subsidies.
“This is an issue that they must handle with great sensitivity, because they are the ones who truly know the population and can help ensure that resources reach those who need them most,” he declared.
This week, the National Assembly will once again be briefed on the elimination of price controls and the ration book, along with the other 176 economic reform measures the government hopes will help overcome the current crisis. The decision to revisit a discussion that had already taken place on June 19 is, to some extent, surprising. When Díaz-Canel first announced the measures—especially the first two—he presented them as settled decisions. But the public discontent they have generated appears to have forced the government to backtrack somewhat, at least regarding the ration book.
Following the official announcement, the Ministry of Domestic Trade (MINCIN) continued this month to distribute some pending rationed goods, along with portions of milk, eggs, and grains traditionally allocated to young children, pregnant women, and people with chronic illnesses.
For this article, three managers of neighborhood ration stores were interviewed. All three admitted they had no idea what would happen to the rationing system.
“Although at first we were told that the ration book would be eliminated and that new, unsubsidized prices would be introduced, no one has mentioned the issue again. The latest products we’ve received have been sold at the usual prices and recorded in the ration book as always. Consumers keep asking us what will happen from now on, and we don’t know what to tell them,” said one of them.
“If we define vulnerable Cubans according to the methodology used until now—families that struggle to meet their basic food needs—we would have to include most of the country’s population. Even many of us who work as public officials dealing with these issues.
“The decision to eliminate the ration book has been made at the worst possible moment, in the middle of the country’s worst crisis in decades. And the effects are already visible. The sight of people digging through garbage or begging for food has, sadly, become normal.”
The comment came from a social worker in Camagüey who requested anonymity.
In her view, a good indicator of the scale of the crisis is the Family Assistance System (SAF), a network of subsidized community dining halls where elderly people, individuals with disabilities, and others in vulnerable situations can obtain meals at reduced prices.
Applications to the program have grown exponentially over the past three years. The number of available places, however, has not. In fact, there are fewer openings now than in January 2021, when the Monetary Ordering Task began. At that time, about 76,000 people were served by the SAF. Today, the number is just over 67,000.
“Even though the quality of the SAF menus has deteriorated, we continue receiving many applications. We cannot accommodate them because new enrollments have been suspended for more than a year. Many places left vacant by elderly beneficiaries who have died have never been filled.”
The cuts to social protection programs and the elimination of price controls and the ration book are expected to have a dramatic impact on hundreds of thousands of families, especially since they come after a profound decline in the purchasing power of state wages beginning in 2018–2019.
These latest austerity measures are part of a much broader program to eliminate what the government calls “undue subsidies,” also promoted by Raúl Castro since the early 2010s. Under that policy, numerous benefits that had supported millions of Cuban workers were cut, even though many of them had been more valuable than their actual salaries.
Workers in sectors such as defense, agriculture, construction, and mining commonly had access to food and hygiene packages, household appliances, and even housing and hotel stays at symbolic prices.
One of the government’s justifications for launching the “Monetary Ordering Task” reforms in January 2021 was that these benefits distorted company accounting and that it would be more efficient to compensate workers with higher wages instead of goods.
A premise that worked only on paper
Following the nominal wage increases of January 2021—when average salaries briefly approached the equivalent of US$200 per month—inflation quickly devoured the gains while dragging the Cuban peso into an unstoppable devaluation against the dollar. Today, the average monthly salary is worth around US $10, and the minimum wage, like many pensions, is around US $5.
This collapse has occurred under circumstances very different from those of the past, when many workers still received additional workplace perks and other forms of assistance that supplemented their meager wages.
Low state wages also affect salaries in the private sector, which, although generally higher and usually paid in cash, are increasingly insufficient to cover basic needs.
The outlook is bleak. Under the shadow of the US energy embargo and with foreign investment and credit sources virtually closed off, it is unclear how the government can prevent the crisis from deepening even further.
For now, the first month without price controls or subsidized basic goods has already proven nearly unbearable for thousands of families. Although President Diaz-Canel continues to insist that “the Revolution will abandon no one,” many Cubans are far less certain—especially each time they go shopping and discover that their money is no longer enough to keep them from going hungry.