The Cuban regime "facilitated" the purchase of 13 Chinese Yto-X904 tractors to farmers in Pinar del Río. However, the selling price of each unit is nearly triple the selling price of these same vehicles in the international market.
In a meeting with Marino Alberto Murillo Jorge, president of Tabacuba, the tobacco farmers of that province were informed about the "facilities" for the acquisition of tractors. One of them spoke to the independent media outlet 14ymedio and confirmed that the selling price of each unit is $26,000.
"The only condition is to have the money in MLC and to have earned it with tobacco," explained the source to the aforementioned media outlet. "We are here to produce and sell tobacco," said the architect of the failed Order Task, emphasizing a "market logic" that is not in line with the price of the tractors "provided" to the tobacco growers.
And it is that the urgency of the leader to increase tobacco production at an accelerated pace -which is why they decide to authorize the sale of tractors to Cuban farmers- should be an incentive to sell them at a price more in line with international market prices, without the current high profit margins.
According to data obtained from e-commerce websites, tractors can be purchased in the international market for approximately 9,000 dollars. The markup imposed by the Cuban government has generated controversy among producers, who must pay in CUC (freely convertible currency) and demonstrate that they have earned the currency through the sale of tobacco.
"The tractors that they are selling to the tobacco farmers for $26,000 and with conditions are bought at retail for around $9,000. The wholesale price and with discounts for quantities (and being a friendly regime, it should be much lower). The real price is a secret like everything in Cuba, the country of workers," said a user from X who compared the selling price of the Cuban regime with that of other suppliers in the international market.
A search on the Alibaba e-commerce page reveals that the price of the Yto 90hp X904 tractor varies depending on the quantity purchased. For orders of 1-2 units, the price is around 10,000 dollars. For orders of three or more units, the price is 3,990 dollars each.
Assuming that the Cuban government had bought them at the unit price ($10,000), their sale for $26,000 would represent almost triple the amount disbursed.
With 13 tractors to be sold to the farmers (this being the third sale of its kind, according to the aforementioned source), it is almost certain that the Chinese manufacturer has sold them at a unit price of $3,990, in which case the company led by Murillo Jorge would be selling the vehicles at six times the price paid by Tabacuba.
Without data to confirm it, it is easy to imagine that the payments made by Tabacuba to Pinar del Río's tobacco farmers for their production are not three or six times higher than those of farmers in other tobacco-producing countries. According to 14ymedio, Tabacuba pays them in MLC 3.6% of the high-quality tobacco - from the locations of San Juan y Martínez, San Luis, Pinar del Río, and Consolación - that they sell in foreign currency.
During the meeting, Murillo Jorge highlighted that Tabacuba has also ensured the supply of fuels and lubricants necessary for the tobacco harvest. Additionally, he mentioned that for the upcoming harvest, the rules will be modified for second-rate tobacco and sun-cured tobacco, which will also be paid in MLC.
The government's strategy of selling machinery at inflated prices, according to Murillo Jorge, "aims to incentivize tobacco production." Although some perceive it as an "improvement," the reality is that Tabacuba's "facilities" bring substantial profits to the coffers of the state-owned company.
The Yto 90hp X904 tractors have a power of 90 HP, a 12+12 gearbox, and are used on farms and gardens. They come with a 1-year warranty and feature an enclosed cabin and the option to install air conditioning (which may increase the final price).
Tabacuba and the sale of machinery to tobacco farmers: "We don't make a single penny."
The state-run press has portrayed the sale of tractors as a government achievement, while producers express their concern over the high costs and restrictive conditions imposed to access the machinery.
In May 2023, the pro-government media outlet Cubadebate reported that the Cuban regime would sell 270 tractors to tobacco producers in MLC during that year. Producers could access these machines through a financing scheme where the government would deduct a percentage of the MLC payment from their harvests.
Regarding this, Murillo Jorge assured that the state entity he leads would not make a single cent during the acquisition of these tools and their subsequent sale to the farmers. His statements were made during the handover event of the first batch of 45 of these equipments in Pinar del Río.
According to the prominent economist Pedro Monreal, this sales scheme reinforces "the medieval segmentation of agriculture in Cuba, or how the 'trickle-down business' approach prevails over the notion of integrated development."
In a Twitter thread, Monreal was very critical of this type of sales, which he described as "schemes of 'quarters' to manage one of the scarcest resources in the Cuban economy: foreign currency."
Although Monreal considered it important for tobacco producers who earn foreign currency to have tractors, he also believed that "tractors are important for farmers and ranchers who sell food in pesos that are consumed every day."
"Contrary to what would seem to be the logic of the promoters of 'dollarized stalls' in the Cuban economy, there is no economic rationale justifying the segregation of producers who receive payment in pesos. It is a 'lordly' rationality, imposed politically," he criticized.
The best tobacco in the world: poorly paid and with discontented workers
In 2022, the tobacco growers in Pinar del Río planted approximately 13,921 hectares, according to the Agriculture deputy, Ortelio Rodríguez Perugorría, which represented the lowest planting plan in the country for a long time.
According to the official, the reduction of plantations in the province also responded to discouraging measures adopted by the state-owned Tabaco de Cuba Business Group (Tabacuba), which reduced from 5% to 3% the freely convertible currency (MLC) that tobacco growers can access as a "stimulus" for the tobacco produced that the company considers "exportable."
Since then (December 2021), tobacco growers from the area expressed their discontent to sector officials about the measures adopted by Tabacuba. A series of fires in tobacco fields, sorting houses, warehouses, factories, and tobacco shipments were interpreted on social media as allegedly intentional incidents, carried out as a form of protest.
With this scenario, the former queen of the world's best tobacco was dethroned in August 2023 by the Dominican Republic, where expert tasters located the best plantations and qualities of the mythical leaf.
The neighboring Caribbean island has emerged as a formidable competitor in the luxury cigar industry, surpassing Cuba and earning the title of the new birthplace of Premium cigars, a path achieved over decades of effort, research, and investment.
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