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Citrus sector begins to approach production levels seen before economic crisis.

It has been a long struggle, but the Cuban citrus industry finally appears to be on the road to recovery.

Like most other sectors, the loss of markets in the former Soviet Union and other Easter Europe and the end of financial assistance dealt a body blow to the citrus industry. In the 1970s, the government invested heavily in citrus with the idea that Cuba would supply citrus fruit and products to the Soviet bloc. With Soviet financial help and protected markets, Cuban citrus production exploded, peaking at just over 1 million tons in 1990.

Soon after, however, the industry went into a free fall. The industry had come to rely on large quantities of imported machinery, fertilizers and other equipment that could not be sustained after the loss of Soviet aid. At the same time, countries of the former Soviet Union and Eastern Europe cut their purchases of Cuban citrus and the island's growers were unable to find new markets because of the poor quality of their produce.

Cuba has 13 major citrus growing plantations. About 60% of the acreage grows oranges, 30% grapefruit with the rest divided among lemons, limes and tangerines.

Production dropped to 505,000 tons by 1994 as the government was unable to maintain the country's orchards. Exports fell by even more as markets dried up.

In recent years, however, production has risen sharply as foreign investment and better management has boosted the sector.

Israel's BM Group, which runs the huge Jaguey Grande plantation and farms on the Isle of Youth, is the largest investor in citrus. I.N.G. of Chile, operating in Jaguey produces juice and concentrates (Tetra Pak Juice and Tropical Island brands). Palmara of Italy has investments in citrus processing plants as does Olex of Luxembourg.

Total citrus production recovered to 713,200 tons in 1998 and 709,900 tons in 1999. Production in 2000 was about 898,500 tons on the strength of output of more than half a million tons from Jaguey Grande. Cuban officials claim the crop will exceed 1 million tons again by the end of the 2001-2002 harvest. Citrus exports, which in the late 1980s accounted for between 2% and 3% of export earnings, in 1999 accounted for 1% of export revenues.

The recovery has been most notable in key production areas. Jaguey Grande, one of the largest citrus groves in the world, reported production of 500,000 tons this year, up from 421,000 tons in 2000. Orange production on the Isle of Youth is expected to double to 60,000 tons this year. Officials say that nearly three-quarters of the oranges from that small island off Cuba's southern coat will meet export standards.

Exports also are recovering strongly. Partial figures from the current harvest now drawing to a close indicate that Cienfuegos--the port through which 80% of Cuba's citrus crops is exported--has loaded 28 refrigerated vessels carrying 77,000 tons of fresh fruit, juice concentrates and essential oils to European markets. However, the reported expansion of production has yet to be reflected in a big way in export figures.

The current recovery also appears to be sustainable as it has been achieved with few government subsidies and as a result of significant management reforms. The reforms have allowed growers to focus on proper maintenance and care for citrus trees, as opposed to large-scale and expensive replanting campaigns that were responsible for the increases in production in the 1980s.

Jaguey Grande accounts for about half of Cuba's total output of citrus from its 20,000 hectares under cultivation. However, this is 2,500 hectares less than in 1997. Two thirds of the current output--production from Jaguey Grande and the Isle of Youth--is achieved with only 56% of the land used in 1995 and only 51% of machinery and equipment.

In addition, the private management of the industry has convinced the government to allow it to lay off excess workers, while paying those that remain bonuses based on productivity. The citrus industry work force reportedly is half the size it was seven years ago, even as production is edging toward all time records.

Agricultural yields have risen as well. Cuban officials say orange yields are 20 tons per hectare, compared to 10.7 tons per hectare in 1998 and 6.9 tons per hectare at the height of the crisis.

The citrus industry also has increasingly focused on selling value-added products such as juices, juice concentrates, essential oils and other processed items. In 1990, only about 25% of Cuban exports were of processed citrus products. However, the construction of new processing facilities in Granma province and Pinar del Rio province, as well as the expansion and modernization of the existing facility in Jaguey Grande has boosted that substantially.

The Cuban industry also has focused much of its recent attention on expanding production of grapefruit, which is not subject to the same volatility as oranges. In 2000, the Jaguey Grande plant processed more than 220,000 tons of grapefruit and produced revenues of $76 million.

The government, via Citricos Caribe--a new exporting corporation--has been promoting the cultivation and sale of organic citrus, which sells for higher prices than conventional produce. Cuba last year exported 60 tons of organic juice to Europe.

In cash terms, citrus is the fourth leading Cuban hard currency earner after sugar, nickel and tourism.

The military, which basically took over the industry in 1995, has led the recovery as part of its perfeccionamiento empresarial business reform program. After stabilizing the industry and bringing in ample foreign investment, the armed forces held a symbolic handover of the citrus sector to the Agriculture Ministry last year.
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Author:Amuchastegui, Domingo
Geographic Code:5CUBA
Date:Oct 1, 2001
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