In Cuba, Egg Subsidy Has Led to the Bankruptcy of Ciego de Avila’s Poultry Company

The debt of the Poultry Company of Ciego de Ávila amounts to tens of millions. (Invasor)

14ymedio bigger14ymedio, Havana, 6 November 2023 — A dozen state companies in Ciego de Ávila will end this year with their accounts in the red, Cuba’s official press reported on Monday. The authorities of the province, which have seen exports crumble by 66.6%, which translates into a debt of 85 million pesos, look with special alarm at the Poultry Company which, even before closing its fiscal year in 2022, already predicted that the next twelve months would bring only losses.

Despite the fact that both the authorities and the local press insist on pointing out that this year there are 11 fewer  companies with losses than in the previous period (21 losses), the complaints of managers who had to suffer “reprimands” focus on three fundamental issues: the shortage of fuel, raw materials and the lack of government financing. All are the responsibility of the State.

Leyda Martínez Arnáez, director of the Poultry Company, explained to Invasor that “the lack of feed and the subsidized price of eggs have led this entity to bankruptcy.” For several years it has been hard to “square” the accounts, and the debt amounts to tens of millions.

The new option to overcome the problem, she argues, is to ally with the micro, small and medium-sized enterprises (MSMEs) to help “reverse the state of affairs.” She stressed this to her superiors, who must approve the new project of “linking” with the private ones, since “the allocation of foreign currency centrally [by the Government] shows no signs of improvement,” she lamented.

They must approve the new project of “linking” with the private ones, since “the allocation of foreign exchange centrally [by the Government] shows no signs of improvement”

A similar option has been sought by La Cuba, an agricultural company that mostly plants bananas, which had been carrying a debt of 70 million pesos as of 2022, and still owes more than two million. According to the director, Ricardo Varona, the biggest problem is obtaining fertilizers that no longer arrive “through the channel,” and the company must get them on its own at a higher price.

At the moment, there is hope in the export of bananas and vegetables, but this creates a dilemma that the company cannot assume with its current income: if it buys fertilizers, it loses money and increases the debt; if it does not buy them, its production and the quality of planting decreases.

For months, the Ceballos Agroindustrial Company, known for its sweets and preserves, has also been in a “tense” situation. According to the entity’s officials, the delays in the export of the charcoal it produces, which is “worked” in the port of Mariel, has forced the company to pay for the prolonged stay of its containers, and its finances now show an overdraft of more than 200%.

This has forced Ceballos to lower the cost of the charcoal, also affected, in part, by the appearance of competitors with less expensive products that have diversified the market, the managers explain.

In addition, unlike other State entities that manage their currencies at the exchange rate of one dollar for 120 Cuban pesos, Ceballos continues with the obligation to use one for 24 pesos. “It is contradictory to say the least that the leading company of the Avileño export hub, with import and export capacity, cannot benefit from the exchange market that is approved for others,” Invasor claimed, joining the complaint of the managers.

The sugar companies Ecuador and Primero de Enero face this time, as in 2022, the scrutiny of the authorities for a combined loss of 164 million pesos

Together with the Company of Communal Services, Raw Materials and Industrial Fisheries, Ceballos falls into the category of entities that have not only reported losses but have also failed to meet the expected profits and the level of exports planned for the year.

The sugar companies Ecuador and Primero de Enero are facing this time, as in 2022, the scrutiny of the authorities for a combined loss of 164 million pesos “after a harvest of poor results and failure to meet the sugar plan.” Other indicators, such as gross sales and operations, have also deteriorated.

Similarly, the Renewable Energy Company Rensol owes about one million pesos, but its directors soon assigned responsibility for the lack of financing to the Aqueduct and Sewer Company of Ciego de Ávila, which, due to lack of fuel, stopped the installation of water pumping units with solar panels in which Rensol took part.

During the analysis of Aqueduct, the director pointed out that the company has begun to pay more than 100 new salaries and that the price of fuel has increased, all without the entity receiving the “central subsidy” allocated to it. The authorities, for their part, expect the company to “dig out [other] alternatives from the bottom of the earth.” “With the equipment and human resources you have, you have to go out and fight for more services and pay 100% of the (water) charge,” was the response of Communist Party officials.

Only the Cárnica Company, which plans to sell 200 tons of pork at the end of the year, “said for sure” that, by the end of 2023, they will have already recovered the million pesos of losses they have reported so far.

Translated by Regina Anavy


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