Cuba announces further downsizing of sugar industry

Wed Sep 7, 2005 10:55 AM ET

By Marc Frank

HAVANA, Sept 7 (Reuters) - Cuba plans to shut down more sugar mills and replace them with food processing facilities, the Sugar Ministry said this week, in the first official confirmation many mills would be idled after 71 were closed in 2002.

"This period, through 2007, includes the closing for the next harvest of another group of mills that will be temporarily preserved," the Communist party daily Granma said on Wednesday, reporting on a meeting between ministry officials and workers.

Warehouses and workshops will be put to other uses and "more than 100 factories to produce pastas, chocolate, candy, process soy beans and corn will replace mills," Granma said.

The downsizing comes in the wake of this year's estimated 1.3 million tonne crop of raw sugar, the lowest since 1908, and the prospect that next year's will be more or less the same.

Cuba is importing sugar from Columbia to meet contracts and cover its 700,000-tonne domestic consumption.

[Once the largest exporter of sugar in the world, Cuba is now importing sugar to cover its own consumption]

Industry sources said at least 40 of 85 existing mills would not operate next year as output would be no more than 1.5 million tonnes of raw sugar.

The harvest runs from January into May.

The Communist-run Caribbean country shut down 71 of 156 state-run mills and relegated 60 percent of 2 million hectares (5 million acres) of sugar cane plantations to other uses in a 2002 restructuring that failed to halt the industry's decline and improve efficiency.

"The reasons the country's leaders decided to transform the sugar industry are more relevant than ever," Granma said, referring to the high cost of fuel and other inputs and low prices.

International and local experts said general neglect of the state-run industry was the underlying reason for its precipitous decline from a peak of 8 million tonnes when the Soviet Union guaranteed a market at subsidized prices.

Just eight of Cuba's mills were built after President Fidel Castro came to power in a 1959 revolution.

"In recent years our Commander and Chief Fidel Castro has reiterated that sugar production was no longer of economic benefit to the country," Granma said.

[Of course if el comandante says so, it must be true]

Some 200,000 workers have been laid off in recent years, with the government paying their salaries while they are retrained mainly for agriculture-related jobs on lands that were dedicated to sugar cane.