The pursuit of greater efficiency in order to attain higher levels of development underpins the sprit of reforms currently underway to the country’s economic and social policy. It is a gradual process, but time is pressing and every step must be supported by initiatives which ensure that workers and production results are not negatively impacted.
A financial audit of sector entities resulted in the decision to liquidate or merge with more successful facilities those which have failed to make a profit for three or more years. These measures will also be applied to other successful institutions with the aim of simplifying organization structures and concentrating human and material recourses.
The largest number of entities to undergo this process (73% of the total) are in the agriculture sector, hence only 360 of the 406 institutions affiliated with the Ministry of Agriculture (Minag) will remain.
“The agriculture industry is striving to improve; this process must encompass the greatest percentage of solutions to today’s problems,” stated Alexis Rodríguez Pérez, Minag director of Accounting and Prices. He explained that the process also entails the reorganization of the state system, including research centers and the ministry itself, as well as the creation of municipal and provincial delegations and groups representing territorial entities alongside agricultural production centers which are not part of an enterprise group or liquidated entity.
PRODUCTION UNITS REORGANIZED
”These improvements will strengthen the enterprise system, through the reorganization of production units across all areas, given that today for example, we have three entities with a certain amount of available resources, whose production levels are not consistent with the organizational structure.
”It is not possible to justify the existence of an entity with annual sales of one million pesos, when there are cooperatives able to make 50 million in the same period. We need to increase food production by consolidating workers, land, technology, livestock, working capital and transport,” noted the official.
According to Rodríguez, another incentive to support national agricultural production is the introduction of new equipment and investment, as well as training efforts carried out across all entities, contributing to employees’ professional development and their ability to provide higher quality services.
The improvement process also takes in to account factors associated with the workforce, given the importance of manual laborers in raising production levels.
“We need all basic production workers to continue carrying out their tasks, and collectives to be strengthened, primarily with the surplus technical personnel from research centers and enterprise management offices,” he added.
Minag’s Director of Accounting and Prices noted that the new policy requires that rigorous productivity studies be carried out: “When layoffs are approved, the workers must be consulted, they must be informed of the steps that will be taken and every employee that is not re-hired must be offered the stipulated alternative employment options.”
He also reported that the restructuring process includes a fiscal procedure to clear entities’ outstanding debts, similar to the one being applied to Basic Unit of Cooperative Production (UBPC) and Agriculture and Livestock Production Cooperatives (CPA), which have seen their debts renegotiated over a 25 year term.
“This is very different from how it used to be done, when the remaining entities would assume the debts of those which had been dissolved,” he explained.
Rodríguez reported that the end of 2015 will see some 90 organizations involved in various stages of the improvement process being undertaken by Minag, for a total of 319 entities, and efforts are scheduled to continue through March 2016. According to the ministry official the enterprise system will see layoffs of 1,126 employees, while there will be 4,777 across the state system.
Given the impact of initial reforms to the enterprise system, today the Ministry of Agriculture’s economic situation is better than it was in 2010, when over half of affiliated entities incurred losses of almost 1.2 billion pesos, due to ineffective management and low yields.
The situation began to change three years later, when only 82 unprofitable entities remained and total losses were down to 209,000,000 pesos. The following year saw a dozen institutions leave this negative trend, with only 17% of all entities with losses remaining and a significant reduction in outstanding debts.
At the end of the first half of this year, the situation is even more encouraging: only 46 entities reported losses, while the agriculture sector saw net earnings of 411,832,000 pesos. These results represent the revival of Cuban agriculture.