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Cuba Co-ops Set to Expand, Need Law

Cuba Co-ops Set to Expand, Need Law
November 14, 2011
Patricia Grogg

HAVANA TIMES, Nov 14 (IPS) — The creation of co-operatives forms part of
the current "updating" of the Cuban , even though no official
information has been provided about the expansion of this form of
business management, which has already been tested, with mixed results,
in .

This is not a new issue in academic circles. "Years ago, I conducted a
study and proposed, as my personal opinion, to create co-operatives for
the collection, and distribution of farm products," economist
Blanca Rosa Pampín, an expert on agricultural issues, said in a recent
interview with IPS.

In her view, this type of self-management could solve the problem of the
buying, selling and distribution of agricultural foodstuffs, which until
now has been based on a state system that slows down the whole process,
discourages producers, causes losses due to transport delays, and drives
up the cost of products.

"The guidelines do not talk about this," Pampín added, referring to the
document approved in April during the Sixth Congress of the governing
Communist Party, which sets the agenda for the Raúl Castro government's
modernisation of the country's economic and social policies.

The document, however, does announce that "first-degree" co-operatives –
where members are individuals or legal entities – will be created as a
socialist form of collective ownership in different sectors, with the
goal of producing and providing useful services for society, with
members using their income to pay for all costs.

It also provides for "second-degree" co-operatives, whose members are
"first-degree" co-ops, with the goal of organising complementary
activities that are related to or add value to the products and services
of member co-ops (involved in production, services or distribution), and
making joint sales and purchases for greater efficiency.

Legal regulations reportedly now being drawn up are expected to
guarantee that co-operatives, as a form of social property, cannot be
sold, nor can their ownership be transferred to other co-operatives,
non-state businesses or individuals. At the same time, the regulations
will serve as the basis for determining the income of workers and the
distribution of profits.

For some analysts, the delay in the materialisation of these initiatives
may be due to the fact that they are changes that the government does
not wish to rush, to avoid subsequent errors or delays. "We are not
going to rush things to meet a timetable," Castro said, referring to the
pace of reforms during a government meeting in September.

For now, the authorities seem to be focusing on the expansion of
self-employment or private enterprise as an alternative for the tens of
thousands of people who have lost their jobs in a slashing of the
bloated public payroll. This includes the distribution of idle state
land to new farmers, under a 2008 law.

But experts say more measures are needed to make the economy grow.

In an article published by the Catholic magazine Palabra Nueva, Camila
Piñeiro, a researcher with the Centre for the Study of the Cuban
Economy, said additional advantages would be provided by legal
regulations for the expansion of co-operatives not limited to agriculture.

"It would allow like-minded people to come together to carry out
activities like those engaged in by self-employed workers, but with
higher levels of productivity and without having to recur to a
concentration of wealth or exploitative work relations," Piñeiro said.

In her opinion, in this country, progress will be made in the
construction of a new economic and social order to the extent that "the
number of genuine co-operatives increases and state and private
enterprises democratise their management," along with other conditions.

"The way that co-operatives are organised internally not only makes them
compatible with democratic socialism, but also essential, although of
course they are not sufficient, nor are they the best way to organise
all economic activities," she said.

In Cuba, Credit and Services Co-operatives (CCS) were formed in the
1960s by land-owning private farmers who voluntarily joined to receive
loans, technology and marketing benefits.

A decade later, the Agricultural Production Co-operatives (CPA) emerged,
made up of farmers who went from being private to collective owners by
selling their land and means of production to the new business entity.

According to economist and agricultural expert Armando Nova, the
positive performance of the CPAs over more than two decades served as a
model for the creation of the Basic Units of Co-operative Production
(UBPC) in 1993.

Over the course of time, however, the UBPCs became "a transfigured form
of state enterprise, with unsatisfactory results," Nova commented in an
article on the issue. In any case, the farmland cultivated by
co-operatives grew from 15 percent in 1989 to 70 percent in 1999.

According to the information provided by the researcher, the CCSs and
private farmers show better results on average than the CPAs, and by
2009 they accounted for 57 percent of total production with 24.4
percent of arable land.

In Piñeiro's opinion, if co-operatives have been less successful than
private farmers who hire labour, it is due in great measure to the fact
that they have not had the autonomy needed to make purchases and decide
on their production and sales, among other hurdles.

The co-operatives became "distorted by the statist view of socialism
that has predominated," and the fact that many do not see how the group
interests of co-ops can be brought into line with broader social
interests without the direct intervention of the State, she said.

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