Azcuba Invokes a Confusing ‘Business Model’ To Avoid Another Disastrous Sugar Harvest

The 14 de Julio sugar mill, in Cienfuegos, is one of the few that currently meets the forecasts. (ACN)

14ymedio bigger14ymedio, Madrid, 1 December 2023 — After the “small but more efficient” harvest of 2023, a new edition will begin next week, which will be “superior to the previous one.” This is how Julio García Pérez, director of Azcuba, defined the production scheduled for 2024 this Thursday on the Cuban State Television program Mesa Redonda [Round Table], in the face of the skepticism of a population already accustomed to the collapse of the results year after year.

This year the sugarcane will be ground in 25 sugar mills. Twenty-three of them begin in December, and the other two will be added later, since “the boiler pipes have not yet arrived in Cuba. They are financed, but the funds are held in a bank, subject to agency inspections, due to the restrictions of the blockade,” said García Pérez, who did not dare to offer an official forecast of the number of tons projected for this year.

Although “the blockade” was among the reasons cited as “external” by the manager, there was a list of internal culprits this time. Excessive burning of cane, sugar quality problems, poor business management – “under the same conditions, some companies and cooperatives maintain acceptable production levels and others decrease” – and the lack of control over crime were the causes accepted as their own by the state monopoly.

García Pérez assumed, as it could not be otherwise, the failure of last year, with a shortcoming of 30,000 tons of the forecasts

García Pérez assumed, as it could not be otherwise, the failure of last year, with a shortcoming of 30,000 tons of the forecasts, so that it was also not possible to cover exports, “affecting very serious commitments,” he stressed, nor to provide energy to the National Electricity System. In addition, the departure of workers to the private sector or from the country reduced the workforce by 10%.

The manager also referred to two serious problems that affect production: illegalities, which will be tackled with more video surveillance, and the land, of which only 60% of the 579 square miles destined for cane is sown, the rest lying fallow due to soil preparation problems.

How it is planned to remedy such a painful situation remained a mystery, despite dedicating more than an hour to the interview. “Among the main strategies to advance in the sector, the approval of a new business model stands out, which allows 84% of the foreign currency to buy inputs for cane, such as herbicides and fertilizers,” said the director, but viewers were left without knowing how such a feat will be achieved.

From the “new business model,” to which they have already referred on previous occasions without further details, it is known that the approval to produce wine and rum is part of it, especially for the sugar mills that aren’t able to produce sugar, but it is not known if exporting that production would guarantee hard currency. Yes, the rum would, but not in the desired amount.

Among the options to improve the harvest, “foreign investment will be essential,” the manager added, since the business portfolio contemplates 16 opportunities. “We have approved foreign investment negotiation directives. In that sense, we are linked to the BRIC countries that are traditional sugar producers and contribute to the sector with modern technology – mainly India, Brazil and China,” said García Pérez.

His optimism, in this sense, is not convincing. The portfolio, presented at the International Fair of Havana, contains about 700 proposals each year, of which only about 30 are approved (mostly in the food and tourism sectors) and which, when they prosper, do so very slowly, which at best could take years.

As novelties, Azcuba pointed out that 14 mills will grind sugarcane that is planted at some distance, due to the need to replant closer to the mill

s novelties, Azcuba pointed out that 14 sugar mills will grind sugarcane that is planted at some distance, due to the need to replant closer to the mill. The mere mention already advances an excuse for the foreseeable bad data of the 2024 harvest: the shortage of fuel will have prevented that transporting of the cane to more than half the mills.

Another issue that left viewers wondering was the mention of the State’s debt to the farmers. “A business model was designed,” said García Pérez, dating back to 2022, “that at first had a debt to the farmers of 2 billion pesos.” The manager said that “products were introduced into the value chain, and a special tax emerged that does not affect the retail price of the products.” And so he settled an issue as worrying as how much the account currently amounts to and how those novelties will change it, which was not clarified.

For the new sugar harvest, seven tons of rice are needed, which must be delivered by national companies, García Pérez said, also leaving doubt as to whether it referred to food for employees. “That’s the way not to represent a burden for the country,” he said. Where he did clarify that efforts are made to retain workers is in the construction of homes, which “allows a different well-being for the sugar company.” Retaining young people is essential, he insisted and spoke of how many new graduates are entering the sector or have been promoted within it.

“We know that an economic recovery of the country happens through the contribution of the sugar sector,” he concluded. A gloomy omen, because if – as does not escape anyone – sugar largely marks the prosperity of the Island, the results of recent years speak for themselves.

In 2022-2023, barely 350,000 tons of sugar were reached, according to the data provided by Homero Acosta Álvarez, secretary of the National Assembly and the Council of State, and derived from a sector report. This amount is far from both the amount destined for national consumption, placed at 500,000 tons, and from the export commitments of 411,000 tons.

Translated by Regina Anavy


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