The Deadly Kiss of Price Controls

The official press blames private producers for the high prices of many foods. (14ymedio)

The official press blames private producers for the high prices of many foods. (14ymedio)

14ymedio, Generation Y, Yoani Sanchez, Havana, 4 January 2016 — I was ten years old when Fidel Castro launched the economic battle he called the “Rectification of errors and negative tendencies.” The Maximum Leader’s rage fell, at that time, on private farmers and on the intermediaries who marketed their products. Cuatro Caminos Plaza in Havana, then known as the Single Market, was assaulted by officials and after that raid several foods disappeared from our lives: onions, garbanzo beans, chili peppers and even taro.

Almost a decade later, when the country had reached bottom with food shortages and scarcities, the government again authorized non-state food markets. The first time I approached a stand and bought a string of garlic, without having to practice stealth, I recovered a part of my life that had been snatched from me. For years we had to appeal to the illegal market, to a precarious clandestinity, to get things ranging from a pound of beans to the cumin seeds needed to season them.

However, the return of “farmers markets” has not been free of attacks and government animosity. The official press blames private producers for the high prices of many foods, and the figure of the intermediary has been demonized in the extreme. In the last 2015 session of the National Assembly, the idea was floated of imposing price regulation on certain food products, to force merchants to reduce the amounts.

At first glance, this would appear to favor consumers. Who wouldn’t consider it good news that a pound of pork without bones would not exceed 30 Cuban pesos, or never reach the astronomical 50 peso asking price in Havana’s Egido market at the end of 2015. The initial reaction of customers would be to welcome it, because a single lemon would no longer cost one Cuban peso, nor would papaya sell for 5 Cuban pesos a pound. However, behind the regulated prices come greater evils.

What could happen is that the products subjected to price controls would disappear from the agricultural markets and once again go into hiding. We would not be able to go to the corner to buy a pound of onions, like we have done over the last two decades, but would return to the times when we’d end up at the side of some road or in the middle of nowhere illegally dealing directly with the producers or the persecuted intermediaries.

Consumers would end up paying the piper for a measure that does not solve the problem of the lack of productivity on our farms or of the extremely low wages.

An economy is not planned on a whim, nor is it managed by force of restrictions, rather it is a fragile framework where lack of confidence and excessive state control are like a deadly embrace, leaving us without the ability to breathe on our own. In this grip, controlled prices come to be feared as the kiss of death that strangles commerce and leaves it lifeless.

12 thoughts on “The Deadly Kiss of Price Controls


    COST OF LIVING IN CUBA: These data are based on 382 entries in the past 18 months from 50 different contributors.
    Last update: December, 2015 Our data for each country are based on all entries from all cities in that country.
    Milk (regular), (1 gallon) $5.01
    Loaf of Fresh White Bread (1 lb) $0.41
    Rice (white), (1 lb) $0.37
    Tomato (1 lb) $0.53
    Chicken Breasts (Boneless, Skinless), (1 lb) $1.72


    L.A. TIMES: Venezuelan opposition says it will try to legally oust President Nicolas Maduro – by Mery Mogollon and Chris Kraul
    In its first day with majority power in Venezuela’s legislature, the opposition coalition of parties Tuesday threw down the gauntlet before socialist PresidentNicolas Maduro, saying it would try to legally remove him from power within six months. The declaration from new National Assembly President Henry Ramos Allup came at the end of a raucous day during which opposing sides exchanged catcalls and in which the socialist faction led by former assembly President Diosdado Cabello left the hall en masse before adjournment.

    Although the new assembly president didn’t go into specifics, his mention of an electoral method for removing Maduro was an apparent reference to the use of a recall vote similar to the one opponents unsuccessfully used in 2004 to try to remove late President Hugo Chavez, Maduro’s predecessor.

    Ramos Allup asked the armed forces to ensure opposition members’ safety after he was harassed and physically blocked by socialist activists from entering the congress on Monday, but the opening session passed without serious incident.


  3. As Obama Eyes Cuba Trip, Dissident Fights to Survive Day 87 of Hunger Strike


    by Frances Martel4 Jan 20162

    As the White House begins to hint that President Barack Obama would like to visit Cuba before his term is over, a political prisoner freed and re-arrested due to the U.S.-Cuba “normalization” deal has lost cognitive functions as he struggles to survive his 87th day on a hunger strike.

    ,, an anti-Communist activist, was released along with 53 other prisoners of conscience in January 2015 following President Obama’s speech a month earlier announcing he would make concessions to the regime of dictator Raúl Castro. He was arrested again following an incident in April 2015, in which he posted a sign on his door mocking Cuba’s legislative elections, in which only Communist Party members can participate. The sign read: “I vote for my freedom, and not in one of those elections where I can’t even choose a president.” He was sentenced to serve four years in prison in November, and has been on a hunger strike since October 9.

    Morera Bacallo reached day 80 of his hunger strike on December 28. Today is his 87th day without food.

    Family members say the Cuban government has denied most of them access to Morera Bacallao, currently in critical condition in a hospital in Santa Clara in central Cuba. “The authorities have not answered us,” Maribel Herrera, Morera Bacallao’s wife, told the Spain-based Diario de Cuba. “They just tell us that we have to help him stop his protest because, otherwise, he is going to die.” Herrera says she last heard of her husband’s condition from his sister, who found him “very disoriented, he did not know where he was or if he was under arrest.”

    On day 80 of his hunger strike, Morera Bacallo’s sister reported that he did not recognize her or and seemed unaware of who other members of his family were. At the time, the U.S. State Department issued a statement that the White House was “profoundly concerned” about the situation. Six days later, a White House spokesman said President Obama is considering a diplomatic trip to the island – not to visit the prisoners of conscience, but to negotiate with the Castro government.

    There are unconfirmed reports that the Castro government, fearing the negative publicity of yet another prisoner of conscience dying during a hunger strike, has begun to force-feed Morera Bacallao. According to a Twitter account claiming to be run by Librado Linares, a fellow dissident who has remained outside the hospital throughout his ordeal, he is “practically being forced to eat, he is in slow recovery.” The account also accuses doctors of issuing a “substance that affects his conscience” to make it easier to feed him. Breitbart News could not independently verify the authenticity of this account.

    Adding to the possibility that the Cuban government is concerned with how the death of a political prisoner by hunger strike could affect its new business dealings with the United States is the surfacing of pro-Castro internet trolls claiming Morera Bacallao to not be a political prisoner, but a “common delinquent.”

    The events surrounding Morera Bacallao’s first arrest, for which he received an eight-year sentence, are unclear. Independent Cuban outlet 14 y medio reports that a member of the Cuban communist party injured herself on wet cement surrounding Morera Bacallo’s home “that was hurled there” by unidentified assailants, and he was blamed for her injury. Morera Bacallo’s relatives said then that he had been arrested while trying to intervene on behalf of dissidents receiving a state-sponsored group beating for publicly condemning the Castro regime.

    Morera Bacallao has survived longer than a number of Cuban dissidents who have recently died of a hunger strike. In 2012, Wilmar Villar, a prisoner protesting an alleged Cuban government “amnesty” that excluded prisoners of conscience, died 50 days into his strike. Orlando Zapata Tamayo, whose death by hunger strike allegedly prompted the false amnesty gesture, died after 85 days on strike. Zapata Tamayo went on hunger strike to protest repeated beatings he received in prison.

    Morera had previously survived a 68-day hunger strike in April 2014.

    The Cuban Commission for Human Rights and National Reconciliation (CCDHRN), an independent research group that releases monthly reports on political arrests, announced this week that the Castro regime had made 8,616 politically-motivated arrests in 2015, most occurring in the tail end of the year. The regime rounded out December with the third-largest number of political arrests: 930. The largest number of arrests occurred in November, 1,447.

    Despite the exponential surge in political oppression in Cuba since President Obama’s normalization announcement, American politicians continue to court the rogue nation.

    Virginia Governor Terry McAuliffe has just arrived on the island hoping to establish business ties between Virginia and the Castro regime. Texas Governor Greg Abbott, a Republican, made a similar trip last month. Chicago Mayor Rahm Emanuel just returned from a vacation there (it is illegal to vacation in Cuba).

  4. We hear that a country can’t feed its peoplewithout synthetic farm chemicals, yet Cuba is virtually doing so. We are told that weneed the efficiency of large-scale corporate or state farms in order to produce enoughfood, yet we find small farmers and gardeners in the vanguard of Cuba’s recovery from afood crisis. In fact, in the absence of subsidized machines and imported chemicals, smallfarms are more efficient than very large production units. We hear time and again thatinternational food aid is the answer to food shortages–yet Cuba has found an alternativein local production.Abstracting from that experience, the elements of an alternative paradigm might thereforebe:
    Agroecological technology instead of chemicals: Cuba has used intercropping,locally produced biopesticdes, compost, and other alternatives to syntheticpesticides and fertilizers.
    Fair Prices for Farmers: Cuban farmers stepped up production in response tohigher crop prices. Farmers everywhere lack incentive to produce when prices arekept artificially low, as they often are. Yet when given an incentive, they produce,regardless of the conditions under which that production must take place.
    Redistribution of Land: Small farmers and gardeners have been the mostproductive of Cuban producers under low-input conditions. Indeed, smaller farmsworldwide produce much more per unit area than do large farms. In Cubaredistribution was relatively easy to accomplish because the major part of the landreform had already occurred, in the sense that there were no landlords to resistfurther change.
    Greater Emphasis on Local Production: People should not have to depend on thevagaries of prices in the world economy, long distance transportation, and superpower “goodwill” for their next meal. Locally and regionally produced food offersgreater security, as well as synergistic linkages to promote local economicdevelopment. Furthermore such production is more ecologically sound, as theenergy spent on international transport is wasteful and environmentallyunsustainable. By promoting urban farming, cities and their surrounding areas canbe made virtually self-sufficient in perishable foods, be beautified, and havegreater employment opportunities. Cuba gives us a hint of the underexploitedpotential of urban farming.

    Examples prices in markets for locals (per 1 kg.)
    – Tomatoes 0,70 USD
    – Cucumbers 0,50 USD
    – Guavas 0,70 USD
    – Pineapple 0,50 USD per item
    – Mango 0,50 USD
    – Watermelon 0,50 USD
    – Large loaf of bread 0,50 USD
    – Eggs of 0,70 USD per dozen
    – Meat or fish grill 2 USD or 3 USD
    – Pizza cost 0,50 – 0,70 USD

    Prices in Cuban restaurant for tourists
    – Meal for two can cost 20 – 25 USD
    – Meat with garnish 15 USD
    – Glass of Wine 1 USD
    – Beer cost 1 – 2 USD

    Food prices in different places
    – In inexpensive restaurant you can dine lobsters and beer for 15 USD
    – Eat on the beach for two can cost 10 – 15 USD
    – On the beach lobsters 1,5 – 3 USD per 1pc.
    – Crocodile meat on the crocodile farm cost 15 USD
    – Breakfast in the casa 3 – 5 USD
    – Dinner in casa 5 – 7 USD
    – Beer at stores 1 USD
    – Mojito 1,5 – 2,5 USD

  6. Cuba announced a year or two ago that they were going to reduce buying artificial fertilizer and there is the issue of desertification thanks to the industrial developed World affecting Cuba. Cuba said that they were going to produce less agricultural products as a result of these two changes. High prices is a necessity because demand exceeds supply. This is the normal mechanism of the Free Market economy which is the same mechanism of a monopolistic economy or the other hybrid directed capitalism. Yoani, again, like any other typical right winger, blames government for the high prices. In the United States the right blames big government and regulations. In Cuba, the right wingers do the same. Climate change, United Nation resolutions regarding Agriculture and the importance of the small farmer to create sustainable organic agriculture don’t enter into their mind. It is easier to blame the Left for everything in the hope that doing so will help bring about regime change and government control by the Right.

  7. In Vzla the Chavistas have lost, but they try every trick possible to still grab all the power they can. Only the Armed Forces are keeping the situation from getting out of control, but will that be enough to ensure a peaceful and somewhat orderly transition? Ther are rogue Chavista elements and irregular Chavista armed forces too…

  8. REUTERS: Venezuela’s Maduro limits congressional oversight of central bank

    Venezuelan President Nicolas Maduro on Monday eliminated the National Assembly’s control over nomination and removal of central bank directors through a legal reform that the opposition slammed as aimed at curtailing its power a day before it takes leadership of the legislature. In a televised speech Monday night, Maduro said he may ask the National Assembly to approve an “economic emergency.”

    One of the opposition’s key economic aims was to try to overhaul the central bank amid triple-digit inflation, recession and widespread shortages. Opposition lawmakers-elect had vowed to pressure the bank into revealing data on inflation and gross domestic product, neither of which has been published for more than a year.

    “The reform is a legal monstrosity to protect a highly questioned president. It goes against the constitution,” Jose Guerra, a newly elected opposition lawmaker and a former director of the central bank, wrote on Twitter.

    Maduro, in his televised speech, said: “I’m evaluating the strengthening of a strategic plan. … We are going to activate an emergency plan and reconstruct our economy.” He provided no further details.

    The law previously required the president to seek the approval of Congress when naming or firing central bank directors. This power now rests in the hands of the president following the change to the law, which was signed on Wednesday.

    The outgoing Congress had granted Maduro special powers to legislate by decree until Dec. 31.


    THE TICO TIMES: Five freed in US-Cuba rapprochement back in custody: rights group
    HAVANA, Cuba — Five dissidents freed as Havana launched a high-profile diplomatic rapprochement with the United States are back in custody in Cuba, a human rights group said Monday. The five were among 53 political prisoners released in 2014 and early 2015 as Washington and Havana moved to restore ties after a half-century break. The Cuban Commission on Human Rights, an officially outlawed but tolerated group, said the five “were confined in high-security prisons in the second half of 2015.”

    They include Vladimir Morera, who had been hospitalized since launching a hunger strike on October 9. The United States last week called on the government to release him.

    On Monday, Morera’s son, Vladier Morera, said his father started eating again on December 31.

    The son said he did not know if this was voluntary on his father’s part. “All I know is that he is eating again, and that he is speaking incoherently because the doctors say he was very weak,” Morera said.


  10. The food problems for the 1.6 million retirees would get worse with a shrinking ration book that last for only 10 days a month at a cost 20 pesos and supply 750 calories per day, and increases in a number of foods costs. The average pension is about 250 pesos, of which 25 to 35 are spend in housing, electricity and water, 25 to 35 are spend in toiletry, transportation, used shoes and clothing, and the rest is used to buy food in the farmers markets and state markets at a cost ten times more expensive than the ration book which supply another 650 calories per day. The monthly cost of the food consume75% of the pension and supply only 1400 calories per day, which is below the minimum of 1800 calories per day according to FAO (Food & Agriculture Organization), and is not enough for most people. Over 25% of elderly consume less than 1200 calories per day and suffer from malnutrition.

  11. Yoani is right…

    An economy should not be planned on a whim… especially an idiot’s whim.

    Sadly, the Maximum Idiot Fidel and his Mini-Idiot brother have whimmed and starved Cuba to death.

    And Castro and his Ministry of Propaganda are still ranting about a supposed US embargo that Obama completely dismantled a year ago.

    Castro’s response to Obama? Reduce trade with the USA. That’s how much the embargo hurt Cuba.

    It’s as if it never existed. That’s because it never did exist.

    I don’t think the USA was to blame when Castro put women in prison for buying and selling an onion.

  12. Price controls are killing Vzla too, and were threatening to kill Argentina until recently. The Generals in Burma discovered that they had to give up some control in order to keep it, and let the people pursue wealth. The Castros know that the economy needs to be set free, but when will they do it? Will they ever?

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