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Once-proud coffee industry falls victim to drought, theft and mismanagement
CubaNews / November 2002

By Larry Luxner

When José Gavinia was a boy, his family owned a farm just south of Tope de Collantes in the old province of Las Villas.

About a third of the Gavinias’ 390 acres was planted with coffee, and the operation had both a dry and a wet mill. Cuban coffee was highly sought after, and the family business flourished.

“Whatever we exported would get a premium over the world market, and most of our coffee went to Holland and Germany,” Gavinia said. “We didn’t sell to the U.S., because the Ameri-cans wouldn’t pay the price at the time. It was much better to sell the coffee domestically.”

Then disaster struck in 1960, when the farm was confiscated and the Gavinia family — along with thousands of other landowners — fled the island, eventually settling in the United States.

And the Cuban coffee industry has never been the same.

Interviews with government officials, diplomats and industry experts all to the conclusion that when it comes to putting Cuba on the world coffee map, the Marxists have really blown it.

“The industry is completely destroyed,” Gavi-nia said by phone from Los Angeles. “The only good coffee coming out of Cuba these days is being exported to Europe. Before the revolution, most of the good coffee stayed in Cuba. Today there isn’t even enough to go around.”

According to the official daily newspaper Granma, Cuba’s 2002-03 coffee crop will be 11% smaller than the previous one — mainly be-cause a prolonged drought has made some processing centers inoperative.

And a mid-level official in eastern Cuba told Reuters that “there was some rainfall at the start of the year, but this summer was exceptionally dry. An 11% decline might be a bit optimistic.”

Assuming it isn’t, the 2002-03 harvest now underway will produce around 13.4 million to 14.4 million kg, based on a Reuters estimate of 15 million to 16 million kg for the 2001-02 crop.

Some 90% of the island’s coffee crop comes from eastern Cuba, another 8% from the central provinces, and the remaining 2% from the western province of Pinar del Río. Coffee no longer grows in the deforested and exhausted soils in the plains and hills around Havana.

Isidro Fernández, the Cuban Agriculture Ministry’s director of coffee production, told Granma that “improved processing, new controls to stop theft and other measures” might make up for part of the shortfall.

Local analysts say rules obliging farmers to sell all their coffee to the state at far below black-market prices results in low production and the diversion of 10-20% of the crop. Cuba’s harvest begins in late August and ends in February, with approximately 35% of the beans exported.

According to historians, coffee was introduced into Cuba in the mid-18th century. Be-tween 1831 to 1835, Cuba’s average coffee output was equivalent to 56% of the output of the best years of the 20th century (1956-60).

By 1902, the year José Martí declared independence from Spain, coffee production was falling, and sugar and tobacco were booming. But the imposition of tariffs in 1927 — mainly against Puerto Rico — sparked a rebirth.

From 1900 to 1925, imports averaged 12,000 tons annually, though in the 1930s im-ports virtually disappeared and Cuba gradually began to export coffee. By 1956, the country was exporting over 20,000 metric tons of coffee beans valued at $21.5 million. In 1962, thanks to agricultural and industrial improvements, Cuba achieved a yield of 316.6 pounds per acre, its highest ever.

Unfortunately for Cuba, the Marxist revolution that swept Castro into power occurred just as coffee production was at its peak. After Castro’s nationalization of the Cuban agriculture sector, coffee entered into a long and severe period of decline. Output, which had exceeded 60 million kg a year in the early 60s, fell to just 19 million kg a year by 1976-80 — a level not seen since the dismal 1920s.

Finally, in the late ‘70s, a slight recovery began, and about 45,000 hectares were planted with coffee between 1979 and 1982. The effort was aimed at reducing imports — which by then had surpassed 30,000 tons annually — and to increase exports, which accounted for nearly half of the total harvest in those years. By the 1980s, production had climbed back up to 27 million kg.

But the Soviet collapse devastated Cuba’s economy and encouraged massive emigration to the cities, which only hastened the coffee sector’s further decline. B

y the early ‘90s, average coffee yield had fallen to 135.7 pounds per acre, and mountain dwellers were fleeing to Havana, Santiago de Cuba, Holguín and other cities as coffee areas rapidly become depopulated and plantations were abandoned — in spite of hundreds of kilometers of new roads and the introduction of electricity, good schools and modern medical care to even the most remote areas.

But experts say the Soviet collapse wasn’t the only factor. A misguided campaign in the early ‘60s had tried to create a coffee belt around Havana’s barren plains, using volunteer labor exclusively. Despite the advice of specialists — and common sense — the project consumed millions of dollars before it was abandoned. Meanwhile, traditional farms in the mountains received less attention.

From 1986 to 1996, coffee exports averaged 12,600 tons a year, compared to 11,200 tons exported in 1957 when the output totaled 43,600 tons. However, poor harvests in the late ‘90s have taken their toll on exports, fall-ing from just over 10,000 tons in 1990 to only 5,000 tons in 2000 and 2001 (see chart below).

Today, export revenue from coffee comes to just 1% of the total value of Cuban exports, down from 3.9% in 1956.

The loss of experienced workers has forced the government to rely on tens of thousands of unpaid middle- and high-school students to harvest the coffee crop. While enthusiastic, their lack of experience and stamina is one reason the sector continues to languish.

And despite massive foreign investment in tourism, nickel mining, oil exploration and citrus, foreign investment in the coffee sector is virtually non-existent, and most of Cuba’s production remains in the hands of three state entities: the Cooperativa de Producción Agraria (CPA), the Cooperativa de Caña y Servicios (CCS) and the Unidades Basicas de Producción Cooperativa (UBPC).

At present, about 361,000 acres of Cuban farmland are dedicated to coffee, of which state-run farms account for 26%, the CPA 18%, the CCS 31% and the UBPC 25%.

Domestic coffee consumption is limited through rationing. While Cubita-brand coffee sells for $6.10 a kilo in the dollar markets, most Cubans don’t have access to dollars and are forced to make do with their ration of two ounces of coffee every two weeks per adult. Cuba typically exports its highest-quality coffee to Europe and Japan, and imports cheap coffee from Vietnam and mixes it with lower-quality domestic grades and some roasted wheat to supply local demand.

At present, Japan and France are the top importers of Cuban coffee, and Crystal Moun-tain — grown in central Cuba and exported to the Japanese market — is reportedly one of the five most expensive coffees in the world.

The United States, of course, imports not a single coffee bean from Cuba and hasn’t since 1962, when the Kennedy administration im-posed a trade embargo against the island. V

eteran roaster Paul Katzeff would like to change that. In July, CubaNews reported that Katzeff — CEO of Thanksgiving Coffee Co. in Fort Bragg, Calif. — had launched a new line of beans called “End the Embargo Coffee.”

The coffee inside the packages actually comes from Nicaragua, Mexico and Guate-mala — though Cuban coffee is just as good and could conceivably find a huge market in the United States once the embargo is lifted.

“Cuban coffee is excellent, like the quality of Cuban cigars. But that’s deteriorated, and now the best cigars in the world come from the Dominican Republic,” said Katzeff. “On the other hand, Cuba’s coffee potential is phenomenal. The climate hasn’t changed. The soil hasn’t changed. And it’s all organic.”

Yet serious problems remain, says Gavinia.

“When we had our plantation, if we had a breakdown in one of the machines, we’d get that part, whatever and wherever it was. Now, that everything belongs to the government, people don’t care that much.”

Gavinia today is chief financial officer at F. Gavinia & Sons Inc., a $60 million-a-year Los Angeles-based empire that sells 22 million pounds of coffee a year to McDonald’s, Costco and private labels. And even though he has permission to visit his homeland, Gavinia — like thousands of other Cuban exiles — refuses to do so out of principle.

“I will never go to Cuba as long as Castro is there,” he says. “Why would I give any money to a guy who destroyed my country? We really hate his guts.”

Asked if he’d consider investing in his homeland once Castro is gone, Gavinia says “of course. We’d have to rebuild the country. And we’re eager to do that.”

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