Comments -- "Forms of Property in the Cuban Economy - Agriculture"
Dr. Armando Nova González
Centro de Estudio de la Economía
Universidad de La Habana
SEPTEMBER –OCTOBER 2012
Mario A. González-Corzo, Ph.D.
Associate Professor, Department of Economics, LEHMAN
Faculty Fellow, BILDNER CENTER, CUNY
I concur with DR. NOVA in that Cooperatives represent a viable form of
property, in which Cuba already has vast accumulated experience, and
could play a decisive role in transformation of the agricultural sector by:
Improving the rational use of resources and the allocation of agricultural output
Improving total factor productivity (TFP)
Contributing to the reduction of the massive FOOD IMPORT BILL
Providing alternative means of employment in the Non-State sector
DR. NOVA found that:
Cooperatives produce 77%77% of food.
The most efficient are: CCS and Private.CCS and Private.
Combined, these Non-State agricultural producers account for 57 %Combined, these Non-State agricultural producers account for 57 %
of the total food output for the country, with onlyof the total food output for the country, with only 24.4 %24.4 % of the arableof the arable
They produceThey produce 63 % of milk63 % of milk (the State produces 13 %), own more(the State produces 13 %), own more 64% of64% of
the milk-producing cattlethe milk-producing cattle and more thanand more than 57 and 60 %57 and 60 % of cattle andof cattle and
hogs, respectively.hogs, respectively.
As Dr. NOVA indicated, The “Guidelines” approved in 2011 represent a step
in the right direction.
However, these “Guidelines” still contain certain characteristics that still do
not facilitate the full realization of property.
I. ECONOMIC MANAGEMENT MODEL
The socialist planning system will continue to be the main national
management tool of the national economy. Its methodology and
organization and control must be modified. Economic planning will influence
on the market and take into account its characteristics.
The management model recognizes and encourages socialist State-owned
companies – the main national economic modality - as well as the foreign
investment forms described in the law (e.g., joint ventures and international
association contracts), cooperatives, small farming, usufruct, franchisement,
self-employment and other economic forms that may altogether contribute
to increased efficiency.
In the forms of non-State management, the concentration of property in
the hands of any natural or legal person shall not be allowed.
DR. NOVA argues that property cannot only be associated with possession of material goods, and that the realization
of property consists of:
Giving Producers’ autonomy to make resource allocation and output distribution decisions, taking the social good
Expanding their access to a market (or markets) for inputs,
Giving them the ability to hire labor, as necessary, AND
Expanding their access to financial resources (such as credit, loans, etc.) and technical assistance
While I agree with DR. NOVA that conceptually any movement towards the full realization of
property is a positive step, the definition of this concept raises several questions for
future research and discussion:
1) How much autonomy should producers have? Can this be adjusted over time?
Depending on circumstances?
2) Who makes this choice? The bureaucratic apparatus? A Central Planning Board
(CPB) as proposed by the classical proponents of “market socialism” like Oskar
Lange and Abba Lerner?
3) How is the “social good” defined? How can it be incorporated into the objective
function --- i.e. utility max. profit max. ---- of producers capable (and free to) make
autonomous factor utilization decisions and output decisions?
4) What is the role of prices in the realization of property? For example, can I enjoy the
realization of property, even if I am given legal title and economic rights over it –
but face fixed prices (set by the State) for the output it produces?
5) If access to financial resources is a requirement for the realization of property, how
is the supply of credit financing to be determined? Price controls? Subsidies?
Quotas? Market Forces – taking risk into account?
6) If measures to achieve the realization of property are to be implemented
systematically, what are some of the features of the system to be put in place to
achieve this goal?
7) What roles should centralized coordination mechanisms play? What roles should be4