Page images
PDF
EPUB

The actual return to growers is not nearly so high as these export prices might indicate. In the first place, about four-fifths of all the leaf used by manufacturers in Cuba is relatively cheap leaf for cigarettes, with an average price (fermented and baled) of only about 10 cents per pound. Including this leaf, the average price of all baled leaf in 1939 is estimated at about 26 cents per pound.

Secondly, these quoted prices are for fermented and baled leaf in storage warehouses. From the quoted prices of baled leaf must be deducted the cost of baling, freight, warehousing costs, and commissions, aggregating an estimated 11 cents per pound. After these charges are deducted, it is estimated that growers received an average of only about 15 cents per pound in 1939. Growers' prices for Vuelta, particularly the better grades, were much higher, while those for Remedios were considerably lower.

Cuban cigars are high-priced; the average wholesale export value in 1939 was 10 cents each. Cigars exported to the United States averaged 11 cents each and those to the United Kingdom 10 cents, while those to Spain, which are of lower quality, averaged around 6 cents each. These high prices for export cigars are explained primarily by the large amount of hand labor involved in their manufacture. Cigars are made, sorted, banded, labeled, and boxed entirely by hand, and for these operations fixed minimum wages are prescribed. In the United States market, Cuban cigars do not compete directly with cigars made from domestic tobacco because of the wide difference in price. To the Cuban wholesale price of about 11 cents must be added shipping charges, import duties, excise taxes, and merchandising charges, bringing the average retail price of Cuban cigars in the United States to well above 20 cents each,39 as compared with an average retail price of only 4.6 cents for all cigars sold in the United States.

Products for the domestic trade in Cuba are relatively cheap. Most of the domestic cigars retail at less than 5 cents each, and most of the cigarettes retail at 5 cents per package of 16, equivalent to 6.25 cents for 20, as compared with about 15 cents for the United States.

GOVERNMENT MEASURES AND TRADE AGREEMENTS

Taxation on tobacco products consumed in Cuba is relatively low. Cigarettes are subject to an excise stamp tax of three-fourth cent per package of 16 cigarettes, equivalent to less than 1 cent per package of 20, as compared with the 6%1⁄2 cents Federal stamp tax in the United States. The low tax and the low price of leaf used in the manufacture of cigarettes permit low retail prices and have undoubtedly helped to maintain the sizable cigarette consumption, even with low consumer purchasing power. Domestic cigars, retailing at less than 2.5 cents each, are taxed $2 a thousand, and those retailing at more than 2.5 cents are taxed $3.

The Tobacco Defense Commission (Comisión Nacional de Propaganda y Defensa del Tabaco Habano) is a semigovernmental organization founded about 12 years ago for the purpose of improving production and marketing of Cuban tobacco, especially in the export field. It is financed from a part of the excise tax collected on tobacco products. This organization also maintains a field laboratory and

39 Fully 80 percent of all Cuban cigars sold in the United States retail at more than 20 cents each.

experiment station for the selection of improved varieties, development of improved curing methods, and production of tobacco seed to supply growers of Vuelta.

Trade agreements involving tobacco have been negotiated with several countries constituting the important export markets, including the United States, Spain, France, Italy, and Argentina. A treaty with Italy in force many years and the treaty with France have been of little value for tobacco exports, since the quantity shipped to these countries has never been large. A treaty with Spain in 1928 has been more important, partly because of that country's taste for Cuban tobacco. However, during the years of the Spanish Civil War, much of the beneficial effect of that treaty was lost.

By far the most important agreements are those with the United States. In the agreement effective September 3, 1934, Cuban filler leaf (unstemmed) and scrap were given a preferential rate equal to 17.5 cents a pound, whereas the full duty from other countries remained at 35 cents. Similarly the duty on stemmed filler from Cuba was reduced to 25 cents, as compared with the full rate of 50 cents. The duty on wrapper (including filler containing more than 35 percent wrapper) was $1.50 a pound. At the same time, it was provided that total imports from Cuba (unstemmed equivalent) were subject to a quota equal to 18 percent of the quantity of all tobacco used in the manufacture of cigars in the United States during the preceding calendar year. Stemmed tobacco and scraps are converted to an unstemmed equivalent for this purpose by multiplying by 1.33. An additional stipulation provided that if the Agricultural Adjustment Administration program on cigar tobacco in the United States were abandoned, the special preferential duties on Cuban tobacco would become inoperative.

When the adjustment program became inoperative early in 1936, the duties on Cuban leaf were raised on March 16, 1936, to the former level. During the year 1935, in which the lower rates had been applicable to Cuban tobacco, Cuban exports to the United States rose from about 13 million pounds to 15.8 million, but after the restoration of the full duty declined again to 11.6 million in 1936 and during the next 3 years varied from 13.1 to 14.9 million.

Effective December 23, 1939, a supplementary trade agreement was entered into between Cuba and the United States under which the previously existing preferential rates were again established on filler tobacco and the duty on wrapper was reduced to $1.20 a pound. This supplementary agreement also provided a tariff quota for imports beyond which the reduced rates would not be applicable; namely, 22 million pounds (unstemmed equivalent), exclusive of wrapper, in any calendar year. Under this agreement, Cuban exports to the United States rose from 14.9 in 1939 to 15.2 million in 1940 and 19.2 million in 1941. From 1936 through 1940 shipments to the United States were always less than the tariff quota.

Under a second supplementary agreement the duties on Cuban tobacco were further reduced on January 5, 1942, to 91 cents per pound on wrapper, 20 cents on stemmed filler, and 14 cents on unstemmed filler and scrap. The tariff quota to which these rates are applicable, however, remained 22 million pounds (unstemmed equivalent).

So long as the war in Europe continues, the Cuban tobacco industry will suffer through having a large part of its export market cut off,

The blockade, shipping difficulties, and economic policies shut off exports to practically all continental Europe except Spain and Portugal. In addition, the United Kingdom's prohibition on the further importation of Cuban cigars cuts off the principal export market for manufactured tobacco.

Exports of unmanufactured tobacco to Europe, exclusive of Spain, during 1935-39 averaged 5.6 million pounds annually, or about onefifth of Cuba's total exports in unmanufactured tobacco. In addition, Europe took about two-thirds of Cuba's exports of cigars, for which possibly 0.8 million pounds of leaf were required. The 6.4 million pounds of leaf for which the market has thus been lost is equivalent to about one-eighth of Cuba's total crop. In terms of value, it amounts to about 2 million dollars' worth of leaf, plus about 2.5 million dollars' worth of cigars, or a total of 4.5 million out of the former total export value of 14.6 million.

It is problematical to what extent these export outlets may be regained after the close of the war. It may be significant, however, that in numerous countries the consumption of cigars has tended to decline over a period of years; and it does not appear probable that the world demand for cigar leaf will be greatly increased. An addiditional adverse factor is the tendency toward the use of cheaper products, whereas Cuban leaf is relatively high priced and Cuban cigars frequently retail at several times the price charged for domestic cigars in the United States. However, the high quality and fine aroma of Cuban tobacco and the inability to obtain similar leaf from any other country assure a consumer preference for Cuban tobacco among most cigar smokers.

OTHER EXPORT CROPS

Fruit ranks third in importance in Cuban agricultural exports, after sugar and tobacco. Exports in the past decade have averaged more than 3 million dollars in value annually, and nearly all, from 92 to 98 percent, were shipped to the United States. Bananas are the most important and comprise about one-half of the total fruit exports. Cuba supplies about 9 percent of the total United States requirements. Pineapples are second in importance and comprise more than one-third of the total fruit exports. Other exported fruits include avocados, grapefruit, guava products, plantains, limes, and papayas (table 26).

Some Cuban fruits are grown largely for the export market, while others are grown solely for local consumption. Many kinds of tropical fruit are not exported at all, usually because they are too perishable. Among these are the zapote, mamey, caimito, anón, tamarind, guanábana, cherimoya, and breadfruit. Mangoes and some of the other fruits are not permitted entry into the United States because of the quarantine to prevent introduction of the fruit fly. Coconuts, although not strictly a fruit, should be mentioned among the important items of domestic consumption.

Even though Cuba is a heavy grower and exporter of fruit, it nevertheless imports some kinds, such as apples, pears, plums, and grapes, from the United States to the value of over $800,000 annually, including fresh, dried, and canned.

[merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][ocr errors][merged small][merged small][merged small][merged small][subsumed][merged small][merged small][merged small][merged small][subsumed][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small]

Fruits for local consumption are grown in all parts of Cuba, but those grown principally for export are concentrated in areas having the best soils and transportation facilities. Bananas for export are grown only in the Province of Oriente near Baracoa, around Ñipe Bay, Tánamo, Sama, and Guantánamo. Grapefruit for export is grown almost exclusively in the Isle of Pines. The chief pineapple-growing areas are located from 30 to 60 miles southwest of Habana. Papayas are grown in most parts of the island, principally in La Habana, Oriente, and Camagüey Provinces. Although avocados are grown in all Provinces, they are packed for export only within a radius of 30 to 60 miles from Habana.

Table 27 shows the acreage and number of trees or plants of each kind of fruit as reported in the Agricultural Census of 1929, which does not include grapefruit or papayas. More recent censuses have been made only for pineapples and papayas, and these indicate a much greater production-from 13,000 to 15,000 acres of pineapples in 1939 and 1940, and an estimated 2,000 acres of papayas in commercial plantings.

Bananas

Mangoes.

Oranges

Avocados.

TABLE 27. Number of fruit trees or plants and acreage, 1929

Kind

Coconuts.

Zapote nísperos.

Mamey zapotes..

[blocks in formation]

1 Does not include grapefruit or papaya. The acreage in bananas appears to be too high compared with the number of plants.

Estadís. Agro-Pecuaria, Cuba Sec. de Agr. Com. y Trabajo.

Most of the fruit, both for the local market and for export, is grown on small farms. The principal exception is pineapples, most of which are produced by large-scale growers. On the small farms additional labor is usually hired during the harvest seasons for picking and hauling to the packing houses. Fruit growers are customarily financed by commission houses or sales agents who contract to purchase the crop. Because of low export prices and unprofitable operations in some recent years, financing firms have reduced the size of their advances, but they have been partly replaced by local merchants.

With the exception of bananas, practically all fruits packed for export are shipped through the port of Habana.40 Shipments to the port are made both by truck and railroad, and most packing houses have been built along the highways and railways to facilitate shipping. Precooling is available at the docks for part of the produce. From Habana shipments are made by refrigerated steamer to New York and New Orleans and by seatrain to Florida ports and New Orleans. The chief markets for Cuban fruit are New York, Chicago, New Orleans, and St. Louis. Fruit is sold both at auction and at private sale by commission firms. In the past some grapefruit was shipped to European markets, chiefly England.

BANANAS

There are more than 20 varieties of bananas grown in Cuba, but these fall into two major groups: The common banana eaten freshthe principal varieties of which are the Gros Michel or Johnson, Guineo, Manzano, Indio, Seda, and Dátil-and the large cooking banana, or plantain of which the principal varieties are Macho, Hembra, and Burro. The plants of both groups look very much alike. Fresh-fruit bananas may again be divided into two groups. Those grown for domestic consumption are quite small and short, principally of the Manzano variety, while those grown solely for export are the larger size commonly known in the United States. These latter export varieties, of which Johnson is the most common, are much better adapted for shipment.

40 The Law of December 10, 1936, provides for the registration and licensing of all packers and exporters of fruits; authorizes the Ministry of Agriculture to determine the types and sizes of packages to be used in packing fruits entering the export trade; authorizes inspections in the packing plants and at the docks; provides for the issuance of inspection certificates and certificates showing that all export regulations have been complied with; and fixes penalties for noncompliance with the regulations. A supplementary law of February 8, 1937, governs the size and type of containers in which fruits are to be packed for export.

« PreviousContinue »