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    Cuba cuts back on rationed products
    By PAUL HAVEN
    MORE FROM BUSINESSWEEK
    HAVANA

    Cuba has cut two staple foods from the monthly ration books that most
    islanders depend on, edging closer to a risky full elimination of the
    decades-old subsidies.

    Potatoes and peas were dropped from the list of rationed foods this
    week, meaning Cubans can buy as much of the products as they want — as
    long as they are willing to pay as much as 20 times more than they used to.

    The move comes amid efforts by 's government to scale back
    Cuba's subsidy-rich, cash-poor . Nearly free lunches were
    eliminated from some state-cafeterias in September. In October, the
    Communist Party's Granma newspaper published a full-page editorial
    saying the time had come to do away with the ration books altogether.

    Authorities say their goal is to encourage more productivity and free
    the state from a crushing economic burden. Critics — including some on
    the streets of Havana — argue that the moves break with what had been a
    sacred covenant of the revolution Fidel Castro led in 1959: that
    socialism would not make people rich, but would provide all Cubans with
    at least the basics.

    Even with the changes, the state pays for or heavily subsidizes nearly
    everything, from to health care, to transportation.
    But many Cubans see the ration book — or "libreta" in Spanish– as a
    flawed but fundamental right, and shoppers on Friday bristled at the new
    changes

    "This is crazy. They should be adding products to the ration book, not
    taking away from it," said Roberto Rodriguez, a 55-year-old delivery man
    buying , sugar and coffee at an official store in Havana's Vedado
    neighborhood. "If they don't produce enough, people will start to hoard
    products and things will get even worse."

    He said he worried that Cubans with access to money sent by relatives
    abroad would buy up all the potatoes and peas they could, leaving
    ordinary people in the lurch if there are shortages.

    Previously, Cubans were entitled to buy up to four pounds of potatoes
    and 10 ounces of peas a month, with the price set at about a penny per
    pound for potatoes and just under a penny per pound for peas. Both were
    available only in state-owned ration stores or on the black market.

    Now, official buying limits are gone, but Cubans must pay 5 cents a
    pound for potatoes and 17 cents a pound for peas at the same ration shops.

    That may not sound like much, but it's significant in a country where
    the average salary is about $20 a month.

    "I would prefer that the ration system continue. It assures people that
    they will have food," said retiree Juana Rodriguez, 78, who was also
    shopping at the Vedado shop but was no relation of Roberto. "There are
    many poor people who simply can't afford to buy food on the open market."

    Cuba's ration system began in 1962 as a temporary way to guarantee basic
    food in the face of Washington's new embargo. Today, however, Cuba
    spends more than $2 billion on imported food, nearly all of which goes
    to the ration system, assuring subsidized rice, legumes, bread, eggs and
    tiny amounts of meat. The government estimates the ration provides a
    third of what the average Cuban consumes.

    Phil Peters, a Cuba expert at the Washington-area think tank the
    Lexington Institute, said the move is part of a well-publicized if
    slow-moving effort to overhaul Cuba's economy.

    "They've been very clear that they want to move away from the libreta
    and from subsidies in general," he said. "They are doing it piecemeal."

    Peters said the government is also trying to dramatically increase the
    amount it pays farmers for their crops in an effort to spur more
    productivity. As a result, it must cut or reduce the subsidies to consumers.

    He said dropping the subsidy on potatoes and peas was a good way to test
    the waters before making a more aggressive move because neither is
    central to the Cuban diet.

    "If they did it with rice and and the supplies disappeared," he
    said, "people would go crazy."

    Cuba cuts back on rationed products – BusinessWeek (6 November 2009)
    http://www.businessweek.com/ap/financialnews/D9BQ6VNG0.htm

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