Analyzing The Cuban Citrus Crisis
July 20, 2012 Cuba remains an enigma on many fronts, including agriculture. The revolution that installed the Fidel Castro-led communist government in January 1959 was followed by the Bay of Pigs invasion in 1961 and the Cuban missile crisis of 1962. The U.S. embargo of Cuba remains in place today. During the 1960s and 1970s, Cuba enjoyed somewhat of an economic recovery, especially in its agricultural sector, due primarily to preferential arrangements with the Soviet Bloc. Cuba shipped agricultural products such as sugar and citrus in return for oil and machinery, at all favorable prices. Cuba, which had a small citrus sector before the revolution, saw its citrus output soar, reaching nearly one million metric tons (MT, or 25 million boxes) by the late 1980s. Cuba became an important producer of grapefruit, ranking a close third behind the U.S. and Israel.
The disintegration of the Soviet Bloc in the late 1980s meant a sudden end to the preferential trade arrangement enjoyed by Cuba. Cuba’s economy contracted significantly; its gross domestic product declined by 25%, agricultural output plunged. Citrus also was strongly affected, and citrus production declined to approximately 400,000 MT (10 million boxes) by the early 1990s.
Farming Fortitude
To its credit, Cuba took measures to deal with its economic crisis. In agriculture, the large Soviet-style state farms were re-organized. Farmers’ markets were allowed to open. In citrus, foreign investors from Israel and Chile arrived with technical and marketing know-how. Citrus production recovered, and by the end of the 1990s was nearing 1 million MT of output again.
The strategy followed by the Cubans was to basically abandon the fresh market and focus mainly on orange and grapefruit juice. Some fresh fruit was shipped to old customers in Eastern Europe and Russia, but most of the oranges and grapefruit produced were processed into concentrated juices that were exported primarily to Europe. In the case of grapefruit, Cuba had established plantings of white grapefruit during 1960s and 1970s, which are preferred to produce frozen concentrated grapefruit juice. In the case of oranges, Cuba tends to produce high-ratio fruit so they cultivated customers such as baby food companies.
Squeeze Play
The decade of the 2000s has not been kind to Cuba or its citrus industry. The island has been raked by numerous hurricanes. The level of tree damage in Cuba far exceeds that experienced in Florida from the hurricanes of 2004 and 2005. Citrus greening was discovered in 2006 and has spread to most of the citrus production area. The hurricanes have served to speed the spread of HLB. Production has declined and was reported to be 265,000 MT in 2011. The Israeli group that had been heavily involved in the large citrus operation at Jagüey Grande recently announced that it was withdrawing from Cuba.
It has been a difficult decade for Cuba and its citrus industry. The regime of Raul Castro has made a few moves toward economic reforms. It remains to be seen how these changes might affect citrus production. The U.S. embargo remains a powerful force in agriculture because it restricts U.S. investors from bringing much-needed capital to Cuban agriculture.
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