Government regulates prices in agricultural markets

New measures to improve consumers’ purchasing power in one of the tensest areas of commerce in Cuba: the purchase of fresh products in the agricultural markets.

The government centralised the ceiling prices of a group of products in the agricultural markets.

To expand the actions to benefit consumers, the Cuban government announced early this week a group of measures to regulate the prices of agricultural products. This year’s resolutions 157 and 162 of the Finance and Prices Ministry (MFP) came into force starting May 3. They establish retail ceiling prices for more than 20 food products harvested by the country’s agriculture and livestock producers, among other regulations.

According to the Ministry’s official note, the decision gives “continuity to the group of measures geared at, among other purposes, increasing gradually the purchasing power of the Cuban peso.” It makes reference to the price discounts in the chain of shops implemented some two weeks before.

 

The new regulations of the MFP regulate the retail prices and wholesale rates “to increase the collection of agricultural products in high demand and their sale to the population.” This is an attempt to give a reply to one of the conflicts that have most troubled consumers, who since last year have been facing a price hike in the agricultural markets combined with the instability or the contraction of supply.

 

Resolution 157, published in the Official Gazette, establishes ceiling prices for top-quality products and applies a 20 per cent discount on second-class products and on third-class ones a 40 per cent discount. It also takes into consideration the stages of the year of more or less supply in each case.

 

“The prices take into consideration the seasons for each crop,” the official note explains referring to the months in which the yields are higher, the supply increases and the prices usually go down, and the time in which the yields decrease, the presence in the markets and consequently the prices tend to rise.

The recent Finance and Prices Ministry resolutions also regulate the prices of the wholesale marketing of agricultural products.

The recent Finance and Prices Ministry resolutions also regulate the prices of the wholesale marketing of agricultural products.

Foto: Foto: Ladyrene Pérez/Cubadebate.

 

The government included on the list of regulated food products tubers, bananas, green vegetables and fruit.

 

The norm includes state and non-state entities that operate in the markets born years ago under the system of ceiling prices and other regulations which as time went by they abandoned. But it makes an exception for the so-called Supply and Demand markets and the commercial spaces leased in Havana for private workers.

 

In the case of the products that do not have collection prices established by the MFP, that agency orients with Resolution 162 a “top commercial margin rate of 40 per cent over the acquisition prices,” which includes the expenditures and profits of wholesale and retail marketing, from the fields up to their sale to the population.

 

Resolution 157 also approves ceiling prices for the contracts signed by the farmers with collecting state entities forpurchase and collection of agricultural products and the ceiling selling prices of these entities to the Havana Provincial Enterprise of Agricultural and Livestock Markets, among other regular operations in wholesale commerce. These regulations respond to the population’s dissatisfactions and criticism regarding the high price of agricultural products blamed on the wholesale intermediaries.

 

The regulations take into account other common operations of the wholesale market between provinces and leave the door open for the setting of prices agreed by the parties, marketing state enterprises and agricultural producers for the products without a price of the centralised collection centres, among other variants.

 

Moreover, it warns against “the request for subsidies because of the difference in the agreed upon prices and those for retail sale.”

 

“The retail prices for agricultural products cannot require subsidies from the State Budget or cause losses to the marketing enterprises,” Resolution 157 establishes, though it reiterates the existence of a Development Fund to facilitate agricultural producers’access to bank credits.

 

These measures were expected in Cuba since last December when they motivated a debate during the session of the National Assembly of People’s Power, in which the Cuban authorities, MPs and agricultural producers took part. President Raúl Castro spoke on that occasion about the need to take measures even though they are a momentary palliative. The official Cuban position is that the definitive solution of the prices will be achieved with the solution of problems like the dual currency and exchange rate and the increase of production and supply of the agricultural markets. (2016)

 

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