CUBAN CITRUS INDUSTRY
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Document Page Count:
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Document Creation Date:
December 22, 2016
Document Release Date:
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Sequence Number:
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Case Number:
Publication Date:
October 4, 1985
Content Type:
MEMO
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STAT
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ID*4 OCT
MEMORANDUM FOR: (See Distribution List)
Chief, Strategic Resources Division
Office of Global Issues
SUBJECT: Cuban Citrus Industry
1. The attached memorandum contains an assessment on the
ctat,is of the Cuban citrus industry.
a a a an
ave been
2. This analysis was produced byl
of the Agricultural Assessments Branch with contributions from
Cuba-Caribbean Branch, Middle
America-Caribbean Division, Office of African-Latin American
Analysis.
3. Comments and questions are welcome and may be addressed
to the Chief, Agricultural Assessments Branch,
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Attachment:
The Cuban Citrus Industry: Continuing Shortfalls
in a Showpiece Diversification Effort
GI M 85-10251, October 1985
NGA Review Completed
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SUBJECT: Cuban Citrus Industry
OG I/SRD/AAB
Distribution List:
1 - Richard Cannon, Agriculture
1 - Bobby Spiers, Agriculture
1 - Edwin Cissel, Agriculture
1 - Pat Ashburn, Agriculture
1 - Glenn Whiteman, Agriculture
1 - Byron Jackson, Commerce
1 - Kenneth Skoug, State
1 - Joseph O'Mahoney, State
1 - David Smith, State
1 - David Wigg, NSC
1 - SA/DDCI
1 - Executive Director
1 - DDI
1 - DDI/PES
1 - NIO/Econ
1 - NIO/LA
1 - CPAS/ISS
1 - D/OGI, DD/OGI
2 - C/ECD/CM
1 - SOVA/TWAD
1 - SOVA/ING/
1 - C/ALA/MCD
1 - ALA/MCD/C
4 - ALA/MCD/C
1 - ALA/NCD/M
1 - C/SRD
5 - C/SRD/AAB
EP/FT
/CU
U
U
ACD
1 - OGI/EXS/PG/C
8 - OGI/EXS/PG
(4 October 1985) 25X1
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Central Intelligence Agency
ON FILE USDA RELEASE INSTRUCTIONS APPLY
Washington D C 20505
DIRECTORATE OF INTELLIGENCE
0 4 OCT 1985
The Cuban Citrus Industry: Continuing Shortfalls in a
Showpiece Diversification Effort
Overview
In 1969, ten years after the Revolution, the Havana
government embarked on a 12-year experimental program to convert
hundreds of thousands of acres of idle land into citrus
orchards. The program had two announced goals; to diversify
agriculture and to generate income. As part of the program,
hundreds of secondary schools were built in the new orchards, not
only to educate rural youngsters and indoctrinate them in
communism, but also to provide a labor force for the fruit
industry. This continuing program, intended as a showpiece, has
not met expectations. The increased amount of land brought under
citrus cultivation is impressive, but production and foreign
earnings have consistently fallen far short of plan. Furthermore,
while tens of thousands of youth have been educated and
presumably indoctrinated, using them as a labor force in the
orchards has created some serious agronomic problems. Because of
these shortcomings, in our estimation the program is not likely
to become a model for further expansion of agriculture or for
other sectors of the Cuban economy.
Despite a quadrupling of citrus hectarage and output since
the onset of the program and development of the unique support
infrastructure, we estimate that citrus presently contributes
less than one percent of total national income. Moreover, it
ranks a distant second to sugar in terms of agricultural export
earnings, accounting for only about two percent of total revenues
compared to roughly 75 percent for sugar.
In 1981, overly optimistic Cuban production plans encouraged
CEMA countries--the USSR, East Germany, Czechoslovakia, Poland
and Bulgaria--to invest in a further expansion of the citrus
program. In that year, Cuban plans called for output of one
million tons by 1985 and 2.5 million tons by 1990 even though the
previous year's production only reached 441,000 tons. Based on
these projections, the CEMA countries entered into an agreement
with Havana to invest $350 million in the industry over a five
year period. In return, the Cubans pledged to meet these
countries' major citrus import needs. Even though the funds
representing about 15% of all Cuban agricultural investment and
3% of total investment--were allocated, Havana has not been able
to adequately fulfill its part of the agreement. We estimate
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1985 production will be at least 400,000 tons short of the 1985
plan.
Prospects for any significant improvement in the industry
during the remainder of the decade are dim. Because of
obligations to CEMA, only 5 to 10 percent of Cuba's citrus
exports are available for sale to hard-currency paying Western
countries. Hard currency shortages--which have been particularly
acute since Western creditors imposed austerity measures in 1982--
will continue to limit the regime's ability to expand citrus
hectarage or finance imports of key agrotechnical inputs such as
pesticides and fertilizers. As a result, we believe that the
dramatic growth in citrus production achieved during the 1976-83
period will slow and that output will level off at one-million-
tons per year by 1990--1.5 million tons below plan.
Under these circumstances, there is little chance that Cuba
will make direct inroads into the US fresh citrus market. Even
so, an indirect impact is possible. Increased exports of Cuban
citrus to CEMA could cause CEMA's traditional Mediterranean
suppliers to divert their products to the European Community,
thereby cutting into the US share of that market.
In the unlikely event that Cuba's financial situation
permits additional investment in the citrus industry in the near
term, Havana may eventually be in a position to compete directly
with the United States in the juice/concentrate market. New
investment funds could be used to further expand hectarage or to
purchase agrochemicals, either of which--combined with better
orchard management--would boost production above our current
projection. Given the recent completion of three modern, large
scale citrus processing plants, along with the refurbishment of
an existing plant, Cuba could begin exporting surplus quantities
of juice and other by-products to the West, perhaps by the end of
This memorandum was prepared by
of the Agricultural Assessments Branch, Strategic Resources
nivision. Office of Global Issues, with contributions from
, Cuba-Caribbean Branch, Middle
America-Caribbean Division, Office of Africa-Latin American
Analysis. Comments and questions may be directed to
Chief, Strategic Resources Division, on
2
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The Cuban Citrus Industry: Continuing Shortfalls in a
Showpiece Diversification Effort
Introduction
Since the 1959 revolution, Havana has attempted to expand
and diversify its sugar-dominated economy and boost exports to
CEMA trade partners. During its first two years in power, the
Castro regime took more than 15 percent of the island's cane
fields out of sugar production in preparation for agricultural
diversification. As a result of agrarian reforms in 1959 and
1963, large landholdings were reallocated, the bulk of arable
land was organized under state control, and restrictions were
levied on private land ownership. Since 1963 the state has
continued to expand its holdings and now directly controls about
80 percent of the arable land.
The citrus sector was selected to serve as the centerpiece
of Havana's drive to diversify traditional farm exports. Owing
in large part to technical assistance from the Soviet Bloc and
assured, subsidized CEMA markets for citrus, significant progress
has been made. A 12 year plan launched in 1969 for massive
plantings of state groves--most in areas where citrus had never
been grown--resulted in an impressive expansion of the citrus
sector. Prior to the revolution, citrus landholdings amounted to
only 12,000 hectares, yielding an annual average of about 58,000
tons of fruit. From 1968 to 1978, according to Cuban statistics,
citrus plantings more than quadrupled, increasing from 30,200
hectares to 129,500 hectares. By 1983, when many of the newer
trees had begun to bear fruit, production totaled 632,000 tons
and exports had reached about 380,000 tons, almost all of which
was destined for the Soviet Bloc (Figure 1). Long range plans
call for a further doubling of hectarage to about 250-300,000
hectares, approximately the citrus area of Florida.
Despite sizable progress, Havana has often fallen short of
its announced annual goals for citrus production and exports. The
shortfall is due, in our estimation, to an inability to finance
either needed technological inputs or the further expansion of
planted area. The financial squeeze has been particularly tight
since 1982 when Havana's freewheeling import policy first came
under the close scrutiny of Western official and commerical
creditors attempting to roll over Cuba's hard currency debt.
Hard currency shortages have especially limited the regime's
ability to finance critical imports, such as Western pesticides
and fertilizers, that are required to control pests and diseases
and to increase yields.
The Agricultural Setting
Climate. Citrus growing conditions on Cuba are good though
not ideal. The soil is a sandy to sandy loam and provides good
drainage. The soil profile--about three feet--is generally
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Figure 1
Cuban Citrus Exports as a Proportion of Total Production
Cuban citrus production,
Thousands of tons
Total citrus produced
Cuban citrus exports
1957/ 58/ 59/ 60/ 61/ 62/ 63/ 64/ 65/ 66/ 67/ 68/ 69/ 70/ 71/ 72/ 73/ 74/ 75/ 76/ 77/ 78/ 79/ 80/ 81/ 82/ 83/
58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84
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adequate and the 6.5 average pH is ideal. These favorable
characteristics closely resemble those of eastern Florida. The
tropical climate, with little diurnal or seasonal temperature
variation, also allows fruit to be harvested one-two months
earlier than citrus produced in semi-tropical climates (e.g.
Florida).
The Cuban climate, however, also has some drawbacks. The
lack of seasonal temperature variations prevents the trees from
undergoing dormancy, which, in part, causes citrus to turn its
expected color, and builds sugar and aroma. Much of Cuban
citrus, therefore, remains green at harvest. Most precipitation
occurs during the spring-summer rainy season. Because of the
seasonality of precipitation and the sandy character of the
soils, the orchards must be periodically watered. Finally, pests
and diseases tend to be more prolific in Cuba's tropical
environment, an especially important problem because of pesticide
shortages.
Infrastructure. Concurrent with the hectarage expansion of
the 1970s, was the development of the infrastructure needed to
maintain the new and larger groves and to handle increases in
production. Secondary schools, termed ESBECs, were built in
hundreds of new state groves. Students attending these
institutions are required to spend half of their school day
helping to tend adjacent citrus plantings.
The inexperienced and
physically immature students have created some serious
problems. For example, in some orchards, trees have been
improperly grafted and planted, and the fruit--especially on the
higher branches-- not completely harvested. In contrast to the
student labor force, well qualified scientists at six
experimental stations scattered over the island investigate all
facets of citrus production, including variety research,
breeding, pest control, cultural practices and harvesting.
According to US experts, the results of these investigations are
highly respected by citrus scientists worldwide. Recently, three
modern large-scale citrus processing plants were completed.
Along with a refurbished older plant, these facilities are
enabling the Cubans to produce juices, concentrates, jams and
oils both for internal consumption and planned export in the near
future (Figure 2).
The Role of Citrus in the Cuban Economy
Notwithstanding recent dramatic growth in Cuban citrus
production, the sector still plays a relatively minor role in the
1 Escuelas Secundarias Basicas en el Campo, "Basic Secondary
Schools in the Country."
4
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Cuban economy. We estimate that citrus production--which
utilizes no more than one percent of the agricultural lands not
planted to sugar cane--contributes less than one percent to total
national income. Although about 55-60 percent of the fruit is
exported, citrus is still a distant second in terms of
agricultural export earnings, contributing only about two percent
to total export revenues as compared to approximately 75 percent
for sugar.
As citrus production began to leap in 1980 and 1981, overly
optimistic projection figures were promulgated for the rest of
the decade. Plans called for Cuba to produce one million tons of
citrus by 1985 and 2.5 million by 1990, of which 1.5 million
would be exported. As a result of these projections, an
agreement was drawn up in 1981 between Havanna and five CEMA
countries (USSR, Bulgaria, Hungary, German Democratic Republic
and Czechoslovakia) in which the latter agreed to invest $350
million into the further development of the Cuban citrus industry.
This was seen as a method of reducing the dependence of these
countries on Western citrus exports and as a means of conserving
hard currency. In return, Cuba agreed to increase its exports of
citrus fruits and become the main supplier for these countries.
Although citrus output and exports have increased, they have fallen
considerably short of expectations.
Approximately 90-95% of current Cuban exports are delivered
to CEMA countries, with the USSR and German Democratic Republic
accepting the largest deliveries (Figures 3 & 4). The remaining
exports go to various Western countries early in the production
season as Cuban citrus matures one to two months earlier than in
Mediterranean countries or the US. Later deliveries will not
sell because the quality of the Cuban fruit falls considerate
short of that to which Western consumers are accustomed.
Citrus Industry Trends
Hectarage. Following the rapid expansion of citrus
plantings that ocurred in the 1970's, hectarage in recent years
has declined somewhat. Based on Cuban government statistics,
planted area reached an all time high of 129,500 hectares in
1978. The average hectarage in subsequent years has only been
122,000 hectares, 10 percent of which are private landownings
(Figure 5). Approximately 5,000 hectares per year were planted
during this time period, generally to replace dead or diseased
trees or for limited expansion of orchards with pockets of poor
soil. The proportions of citrus fruit produced and the varieties
grown closely parallel those of Florida. Slightly over two-
thirds of citrus consists of oranges, about one-fifth is
grapefruit and the remainder of plantings are tangerines, Persian
limes and some lemons (Figure 6).
5
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Figure 3
Distribution of Cuban Citrus Exports, 1977-83
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Figure 4
Percent of Imported Citrus Supplied by Cuba in 1983
Total citrus imported
Supplied by Cuba
35,E tp4s
ON imps d
Cuban citrus
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Figure 5
Cuban Citrus Hectarage
Thousands of hectares
150
Immature
Mature
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Figure 6
Proportions of Cuban Citrus Fruit Produced, 1977-83
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(end in-text statement)
The reduction in hectarage since 1978--about 5 percent--
probably is attributable to environmental and logistics problems
as well as competing investment priorities. Three large
hurricanes struck the island during 1979 and 1980 damaging and
destroying trees and fruit. One US expert believes the Cubans
also may be stabilizing citrus hectarage because increasing fruit
production in the last several years has made it very difficult to
keep up with harvesting, delivery, packaging and marketing. It is
only within the last two years that some of the fruit could be
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Figure 7
Cuban Citrus-Producing Hectarage
Total hectarage under citrus production, per provincia
Hectarage of immature citrus groves
Hectarage of mature citrus groves
Provincia-level boundary
Note: All numbers represent a percentage of total
hectarage devoted to citrus production, by provincia.
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Figure 8
HECTARAGE
P
ER
CEld1 OF
PLANNED
MA
TURE Th 4ATURE
TOTAL TO
T
AL HECTARAGE
HECTARAGE
Guantanano 2
377 206
2,583
2.1
10
Santiago De Cuba 11,
126 838
11,964
9.6
253
G arena 1,
248 730
1,978
1.6
-
Hblguin
326 633
959
.8
62
Las Tunas
64 41
105
.1
-
Sancti Spiritus
16 893
909
.7
225
Cienfuegos 1,
915 3,621
5,536
4.4
13
Villa Clara 2,
325 574
2,899
2.3
-
Camaguey 3,
851 3,344
7,195
5.8
404
Ciego De Avila 5,
959 4,059
10,018
8.0
590
La Habana 4,
832 1,703
6,536
5.2
2
Pinar Del Rio 7,
771 8,500
16,271
13.0
250
Isla De La Juventud 11,
358 9,634
20,992
16.8
100
Cuidad De La Habana 1,
164 20
1,184
1.0
-
Matanzas 26,
555 9,056
35,611
28.6
823
80,
887 43,852
124,739
100.0
2732'
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diverted to the new processing plants for conversion to juice and
other products. This logistics crunch will continue over the next
couple of years as production continues to climb.
Austerity measures imposed by Western creditors have
diverted Cuban investment priorities from citrus to export
products for which Havana expects to be able to obtain hard
currency (i.e., textiles, tobacco, leather goods and coffee).
CEMA citrus delivery obligations and the need for costly Western
inputs (e.g. pesticides) as well as inferior fruit quality
prevent citrus from becoming a hard currency earner. This poor
earnings prospect is a particular disappointment to Havana in
light of the massive amount of funds already invested in the
industry.
Yields. Cuban citrus yields are low when compared to other
producing nations. The average yield of mature trees from 1975-
83 was 5.4 tons per hectare compared to 25-30 tons per hectare in
Florida. Futhermore the situation is improving only very slowly;
between 1975 and 1980 yields increased from 4.86 to 5.65 tons per
hectare. In 1983, 6.28 tons per hectare were produced. Several
factors account for this poor performance. First, insects and
diseases cause considerable fruit damage, decreasing quantity,
marketability and storage life. In addition, insufficient
nutrients and serious weed infestations hinder tree growth and
productivity. Although yields may continue to increase in
forthcoming years as better irrigation, cultivation and
harvesting schedules are implemented, we believe it doubtful that
yields will ever exceed 10 tons/hectare. Yields will be held to
this level primarily by continued improper and inadequate
applications of both fertilizers and pesticides (insecticides,
fungicides and herbicides). Such agrochemicals are not currently
available in sufficient quantity and Havana does not have the
investment funds or technology needed to purchase or produce
them.
Production. Despite the recent downturn in hectarage,
Cuba's citrus production has continued an upward trend,
principally because an ever increasing proportion of trees are
attaining maturity, the stage when yields are highest. During
the late 1960s and early 1970s, production ranged from about
120,000 to 160,000 tons. The very extensive plantings made from
1973 to 1976 (averaging over 23,000 hectares per year) began to
mature in the late 1970s and production climbed to 441,000 tons
in the 1979/80 growing season. Output continued to increase
steadily and reached a record 632,000 tons in 1982/83. In the
1983/84 season production dropped to 600,000 tons due to the
shortage of fertilizers and the outbreak of a severe drought
(Figure 9). The drought has continued into the current
production season, causing widespread water rationing and
severely stressing citrus orchards. As a result we believe this
season's crop will likely fall below the 1983/84 level.
Over 70 percent of current Cuban hectarage is now composed
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1957/58
1958/59
1959/60
1960/61
1961/62
1962/63
1963/64
1964/65
1965/66
1966/67
1967/68
1968/69
1969/70
1970/71
1971/72
1972/73
1973/74
1974/75
1975/76
1976/77
1977/78
1978/79
1979/80
1980/81
1981/82
1982/83
1983/84
Citrus Production (Tons) Citrus
Larons, Limes Exports
oranges (Tangerines) Grapefruit and Other Citrus Total (tons)
* 51,000
* 57,000
* 57,000
* 49,000 (* 8,000)
* 49,000 (* 8,000)
64,000 ( 8,000)
86,000 ( 5,000)
83,000 ( 8,000)
118,000 ( 9,000)
110,000 ( 13,000)
120,000 ( 4,000)
108,000 ( 12,000)
122,000 ( 11,000)
85,000 ( 8,000)
110,000 ( 11,000)
114,000 ( 10,000)
108,000 ( 12,000)
127,000 ( 10,000)
129,000 ( 20,000)
158,000 ( 11,000)
184,000 ( 21,000)
184,000 ( 22,000)
296,000 ( 30,000)
333,000 ( 26,000)
360,000 ( 30,000)
432,000 ( 35,000)
#405,000 (#35,000)
* 7,000
* 7,000
* 7,000 * 7,000
* 7,000 * 6,000
* 7,000 * 6,000
7,000 7,000
9,000 9,000
12,000 12,000
11,000 12,000
13,000 11,000
15,000 15,000
13,000 18,000
17,000 13,000
14,000 17,000
19,000 22,000
25,000 23,000
30,000 24,000
25,000 20,000
34,000 25,000
32,000 23,000
52,000 23,000
52,000 25,000
83,000 32,000
85,000 27,000
110,000 30,000
125,000 40,000
#120,000 #40,000
Citrus Hectarage yield
Newly (T/
Mature Planted Total Hectare)
* 58,000
* 64,000
* 71,000 * 1,600
* 70,000 * 2,000
* 70,000 * 2,000
86,000 * 2,000
109,000 * 2,000
115,000 3,000
150,000 4,100 5,000 21,400
147,000 12,800 4,000 24,000
154,000 19,100 6,000 30,200
151,000 25,700 14,200 43,200
163,000 28,300 18,500 3,900 46,200 4.80
124,000 25,400 1 900 42,200
161,000 42,500 2,900 43,200
172,000 50,600 21,700 59,900
174,000 56,000 34,500 92,000
182,000 59,700 23,400 25,200 116,400 4.86
208,000 61,200 26,400 11,300 122,000 5.12
224,000 83,600 32,200 7,700 125,000 5.09
280,000 143,500 40,000 7,000 129,500 5.30
283,000 161,000 45,800 4,300 118,000 4.67
441,000 192,700 63,800 6,500 121,800 5.65
471,000 256,000 69,100 5,200 123,200 5.61
530,000 319,500 79,500 5,200 126,100 5.59
632,000 382,300 84,500 4,200 121,200 6.28
600,000 #360,000
Source: FAS estimates based on FAO, Anuario Estadistioo de Cuba, and Press reports.
* usr estimate
# CIA estimate
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of mature trees whose production will not vary dramatically given
current practices. Citrus trees planted in a tropical
environment (e.g., Cuba or Brazil) have a productive lifetime of
30-40 years before senescence, whereas plantings in a subtropical
regime such as Florida will produce for at least twice that
length of time. The main reason for this difference is that in a
tropical environment the trees are constantly growing; they do not
undergo the physiological slowing exhibited by overwintering trees
in subtropical areas.
Outlook
Havana's pressing need to allocate its scarce resources to
exports that generate hard currency probably will preclude any
significant increase in investment in the citrus sector over the
next few years even though such action would demonstrate to
Moscow that Castro intended to support his rhetorical commitments
to CEMA. Indeed citrus exports earned only $4 million in hard
currency last year and any future payoff resulting from new
citrus plantings would not be realized until at least the late
1980's when trees planted this year began to produce fruit. Even
without a major investment, Cuba's crop will continue to increase
during the remainder of this decade as immature trees planted in
the 1970s begin to fully produce. Yearly increases, however,
will tend to become smaller and the overall growth curve will
plateau as the end of the decade approaches. By 1990, given no
dramatic new expansion in hectarage and a slight increase in
yield per he5tare, yearly production will be approximately one
million tons --1.5 million tons short of plans adopted in the
early 1980s. Some 55 to 65 percent of this production will be
available for export and the bulk (85-90 percent) should continue
to be shipped to CEMA countries.
It would take a sharp improvement in Havana's hard currency
picture--an unlikely development in the near term--to permit
significantly greater resources to be diverted to citrus. if
such unexpected flexability were to develop, Havana might
initiate an effort to significantly increase citrus hectarage
that could rival the intensive plantings of the early 1970's. By
doubling the current citrus hectarage to approximately 250,000
hectares, for example, we estimate Cuba would be able to increase
the volume of exportable fruit from recent levels of less than
400,000 tons recently to well over one million tons by the mid-
1990's, assuming that yields remain at about present levels.
Alternatively, by providing adequate protection from pests
through a major investment in pesticides, spraying equipment, and
training for personnel, Cuba probably could double or even triple
2 The current severe drought over most of Cuba may reduce ttie
1985 and 1986 production but the long term estimate should
hold.
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its current citrus production and exportable surplus by the early
1990s without expanding hectarage. In either event, such a
program would represent a sizeable resource commitment well
beyond what we presently think Havana can afford.
Implications for the US
Assuming that CEMA will continue to import at about current
levels and barring a significant investment in the citrus
industry, only limited amounts of Cuban citrus will remain
available for export to the West during the remainder of the
decade. There is little likelihood under these circumstances
that the Cubans will impinge directly on US markets for fresh
citrus, but they may have an indirect effect. The Mediterranean
countries of Italy, Greece, Morocco, Egypt and Turkey presently
export substantial amounts of their citrus to CEMA members.
Continued expansion of Cuban citrus exports to CEMA could
eventually force the Mediterranean producers to divert sales to
other heavy EC consumers (e.g. France, Beneleaux countries, UK),
cutting into the US market in this area--presently about twelve
percent of its total fresh citrus exports.
If Havana initiates a new citrus planting campaign by the
end of the decade or boosts yields through better pest
protection, Cuba may be able to make greater inroads into the US
market by the mid-1990s. Further increases in citrus exports to
CEMA would exacerbate the indirect losses to US producers resulting
from the diversion of Mediterranean citrus from CEMA to Western
European markets. While there is an outside chance that US
producers could sustain losses in the fruit market as a result of
direct competition with the Cubans, unless the quality of Cuban
fresh fruit improves significantly, these losses would likely be
minimal.
Of greater concern to US citrus growers would be the
potential large-scale production of juice/concentrate products by
Cuba that could result from a future surge in citrus output.
Because Cuban citrus varieties are conducive to these types of
processed output, Havana may eventually become a direct
competitor with the United States in this market. Although no
official statistics are currently available on processed citrus
products, most of them probably would be consumed domestically
and/or shipped to CEMA countries in the short run. But given the
recent completion of the three new processing plants and the
refurbishment of another, Cuba may well try to market a portion
of its juice output by the end of the decade in Western marked
to acquire even a small amount of additional hard currency.
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