CONTROL SHEET

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01049A002400110001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 25
• Document Creation Date: November 16, 2016
• Document Release Date: January 10, 2000
• Sequence Number: 1
• Publication Date: March 1, 1962
• Content Type: FORM

25X1 A Analyst:
Approved For Release 2000/04/18 : CIA-RDP79TO1049A
CJA/ AR -E P-6112 7 2.1
0 fa
March 1962 ,
. DD1....
,AD/R.
Ch/G
1-.2 .
__
_St/FM
14, 1.5
DJA
16,_.17
D/.L ...,,
18, 19
D/M
22
D/S
Ch/E
23
AD/OO
24
AD/BI
25
AD/SI,..
26, 2 7 - 31
AD,/NE
S/CU
321- 41......._...
42
43
,44
45
46-49
50
5j,_7_60,
61_- 69
70 - 85
7/-7a
25X1A
3, Apr 62
RID/AN (Room 2051 L Bldg. )
LS . CR for USIA
LS/CRfor Dept.
Task Force W/Plans
OCR
of Agriculture
LS/CR for Dept. of State
NSA LO for
C
sr/r?/C
/~
/4~
001e- 1~'
CIA-RDP79TO1049AO02 Q
S/CU
4)
SECRET
16.e.::?
6-2
25X1A
25X1A
25X1A
25X1A
1.2 hA" 6r-
 v c-a ~ - - V.
A Apjroved Fo ele en 000/04~-c_/1 i~-RDcP79TO1 -1
25X1
25XIA cr s /P 1 Ivw t
JV!
2541 C
25X1A
25X1A
/ ? 111-U 4 ,^
25X1A
 Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
SECRET
AN APPRAISAL OF THE CUBAN SUGAR INDUSTRY
CIA/RR EP 62-21
March 1962
WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
SECRET
Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
 Approved For Release 2000/04/18 : CIA-RDP79T01049A002400110001-2
S-E-C-R-E-T
This publication presents a basic survey of the sugar industry of
Cuba with particular emphasis on the period 1955-61. It is designed
to provide a background to be used in making assessments of future
economic activities in the sugar industry. Sources used in the publi-
cation are available in the files of this Office.
S-E-C-R-E-T
Approved For Release 2000/04/18 : CIA-RDP79T01049A002400110001-2
 Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
S-E-C-R-E-T
CONTENTS
Summary and Conclusions . . . . . . . . . . . . . . . . . . . 1
I. Introduction . . . . . . . . . . . . . . . . . . . . . . 5
II. Organization . . . . . . . . . . . . . . . . . . . . . . 5
III. Quantitative Aspects . . . . . . . . . . . . . . . . . . 6
A. Output . . . . . . . . . . . . . . . . . . . . . . . 6
B. Yields . . . . . . . . . . . . . . . . . . . . . . . 8
C. Stocks . . . 8
D. Prospects for 1962 10
IV. Critical Points in the Time Cycle . . . . . . . . . . . . 10
A. Planting . . . . . . . . . . . . . . . . . . . . . . 10
B. Growing . . . . . . . . . . . . . . . . . . . . . . . 11
C. Harvesting . . . . . . . . . . . . . . . . . . . . . 11
D. Processing . . . . . . . . . . . . . . . . . . . . . 12
V. Inputs . . . . . . . . . . . . . . . . . . . . . . . . . 13
A. Labor . . . . . . . . . . . . . . . . . ... . . . . . 13
B. Fertilizers . . . . . . . . . . . . . . . . . . . . . 14
C. Tractors . . . . . . . . . . . . . . . . . . . . . . 14
D. Bagging . . . . . . . . . . . . . . . . . . . . . . . 15
VI. Balance Sheet of Strengths and Weaknesses in the Cuban
Sugar Industry . . . . . . . . . . . . . . . . . . . . . 17
A. Strengths . . . . . . . . . . . . . . . . . . . . . 17
B. Weaknesses . . . . . . . . . . . . . . . . . . . . . 18
Tables
1. Production of Raw Centrifugal Sugar, 1955-61 . . . . . . 7
2. Exports of Raw Centrifugal Sugar, 1955-61 . . . . . . . . 7
3. Harvested Area, Production, and Yields of Raw Centrifugal
Sugar in Cuba, 1955-61 . . . . . . . . . . ? . . . . . . 9
S -E -C -R-E -T
Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
 Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
S-E-C-R-E-T
Page
4. Production, Exports, Apparent Domestic Consumption,
and Stocks of Raw Centrifugal Sugar in Cuba, 1955-61 10
5. Imports and Inventory of Tractors in Cuba, 1945-62 . . . 16
S-E-C-R-E T
Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
 Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
S E-C-R-E T
AN APPRAISAL OF THE CUBAN SUGAR INDUSTRY*
Summary and Conclusions
Production of raw sugar is the keystone of the Cuban economy and
will continue to be so far into the future. The prospects of the
Castro regime depend to a large extent on the successful functioning
of the Cuban sugar industry, which now is operating primarily under
government control.
Cuba devotes more than one-half of its cropland to sugarcane, pro-
duces approximately 12 percent of the annual world production of raw
centrifugal' sugar, and normally contributes about one-third of the
total raw sugar moving in international trade. The potential exists
for increases in production of cane, both by expanding the acreage of
cane and by the use of more intensive techniques.
Cane is a perennial that needs to be replanted only every 8 or 9
years. It grows readily in the hospitable climate of Cuba. Pests
and diseases are of only minor significance. The crucial time in the
economic life of the crop is the harvest season, which lasts from
January through May, the dry season of the year. At this time the
cane must be cut and quickly transported to the mills for grinding.
Any delay between cutting and grinding results in a decreased yield
of sugar from the cane.
During both the harvest of 1961 and the current (1962) harvest the
Castro regime has been forced to draft "volunteer" canecutters in order
to overcome a shortage of labor in the canefields. Because of the lack
* The estimates and conclusions in this publication represent the
best judgment of this Office as of 1 March 1962.
** Raw centrifugal sugar is the form of sugar produced when the sugar
syrup is extracted, from either the beet or the cane, with the color
and the impurities removed, the water boiled off at restrained tem-
peratures under vacuum, crystallization induced, and sugar crystals
separated by centrifugal action from the final juice. This form is to
be differentiated from the product consumed in India, Pakistan, Colombia,
mainland China, and Burma, which consists of the juice simply squeezed
out of the cane and boiled to varying consistencies and also is to be
differentiated from the pure white, completely refined sugar, which is
produced from the raw centrifugal sugar with up to a 10-percent loss of
weight.
Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
 Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
SE-C R-ET
of proper technique and physical endurance required in the cutting of
cane, these voluntary cutters have proved to be somewhat inefficient
harvesters and occasionally have damaged the perennial root stock. In
spite of both exhortation and expedients resorted to by the regime,
the Cuban sugar crop in 1962 will be the smallest since 1955, according
to current indications.
At the time of their expropriation by Castro, the 161 grinding mills
in Cuba had capacity well in excess of requirements, but the increasing
shortage of spare parts for these mills already is tending to reduce
the original grinding capacity.
Since 1960, countries of the Sino-Soviet Bloc have delivered thou-
sands of tractors, trucks, and other farm machinery to Cuba, the bulk
of which has been scheduled for use in the sugar industry. Available
evidence indicates, however, that much of this machinery is not well
adapted to tropical conditions in Cuba and that the suppliers in the
Bloc have not followed through with the necessary spare parts and main-
tenance facilities.
Unlike many sugar-producing countries, Cuba has been backward in
developing methods and facilities for bulk handling and presently re-
quires large quantities of jute bagging that cannot be supplied directly
from indigenous Bloc sources.
In summation the Cuban sugar industry is characterized by a number
of important strengths and weaknesses. On the positive side, it must
be noted that the physical environment in Cuba is ideal for production
of cane. Cuban sugar mills still possess grinding capacity well in
excess of normal requirements for production. In the Bloc the Castro
regime has found an area willing to substitute itself for the US, both
as a purchaser of Cuban sugar and as a supplier of material inputs for
the Cuban sugar industry. Finally, the availability to Cuba of a carry-
over sugar stock of more than 1 million tons* from 1961 will serve to
mitigate substantially the adverse effects of the short crop expected
in 1962.
On the negative side, disruptions introduced by the regime in the
occupational structure of Cuba appear to be resulting in an increasingly
severe labor shortage at sugar-harvesting time. In addition, a poten-
tial future weakness lies in the accelerating deterioration of the sugar
grinding mills, which are primarily equipped with US machinery and for
which replacement parts have become almost impossible for Cuba to obtain.
By substituting the Bloc for the US as its primary trading partner, the
* Tonnages are given in metric tons throughout this publication unless
otherwise indicated.
- 2 -
S -E -C -R -E -T
Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
 Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
S-E-C-R-E-T
Castro regime has thrust on the Cuban sugar industry the penalties of
extremely long lines of communications; significantly higher transport
costs; and a long lag time between requests for and receipt of machin-
ery, parts, and technical assistance. The countries of the Bloc are
notoriously poor suppliers of spare parts and service, and Cuban
authorities have discovered that Bloc agricultural machinery is poorly
adapted to tropical conditions in Cuba.
As of the beginning of 1962, Cuba has no facilities for the bulk
handling of sugar, nor has it developed a domestic source for production
of bagging. Its very heavy requirements for bagging cannot be obtained
directly from sources in the Bloc and are traditionally filled instead
by India and Pakistan.
Although the Cuban position in the world sugar market in 1962 can
be shored up to some extent by the availability of its large carryover
stock from 1961, the net effect of a short sugar harvest in 1962 is
likely to be that the already serious shortage of foreign exchange in
Cuba will be further aggravated.
- 3 -
S-E-C-R-E-T
Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
 Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
S -E -C -R-E -T
I. Introduction
In the wake of the commitment of Castro to Marxism and the Communist
style of dictatorship, the economic partnership between Cuba and the US
has been dissolved. Concomitant with this turn of events, the success-
ful functioning of the Cuban sugar industry has become primarily depend-
ent on the Sino-Soviet Bloc, both as a market for its product and also
as a source of supply for capital equipment and other material inputs.
In the discussion that follows, an effort has been made to survey
the relative position of Cuba in the sugar-producing world, the impor-
tance of sugar to the Cuban economy, and the biological and economic
characteristics peculiar to the Cuban sugar industry. In the light of
the new politico-economic orientation of Cuba, this survey also attempts
a preliminary evaluation of the extent to which the Bloc has been able
to take the historic place of the US in this production relationship as
well as an assessment of the present status of the Cuban sugar industry.
II. Organization
By May 1961, Castro, through the agency of the National Institute
of Agrarian Reform (INRA),* had converted the former large sugar estates
into 622 cooperatives, covering an area of 1.1 million hectares** and
representing about 12 percent of the total area of farmland in Cuba.
Of this total area, approximately 750,000 hectares are devoted to pro-
duction of cane. The 622 cooperatives employ about 122,000 permanent
workers and about 80,000 seasonal workers, all of whom are directly
controlled by the General Administration of Cane Cooperatives (AGCC),
which operates under the authority of INRA.
The owners of small farms were permitted to retain their holdings,
although INRA controls to a great extent the availability of supplies
and the disposition of output of this sector of the agricultural economy.
The small farms cover a total area of 5.3 million hectares, or about
58 percent of the total farmland. About 750,000 hectares are devoted
to production of cane, the remainder being used to produce the bulk of
other Cuban agricultural crops. INRA controls the small farms through
the National Association of Small Farmers (ANAP), which coordinates
* In August 1959, all autonomous agricultural and marketing organi-
zations were incorporated under INRA, which was endowed with indepen-
dent juridical authority for handling all matters pertaining to agrarian
reform, agricultural production, credit, commerce, and trade.
** One hectare equals 2.471 acres.
S-E-C-R-E-T
Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
 Approved For Release 2000/04/18 : CIA-RDP79T01049A002400110001-2
agricultural activities in the private sector to meet national agricul-
tural goals. Loans are made to the small farmers through a credit de-
partment within ANAP.
The large livestock farms also were confiscated by Castro and trans-
formed into 263 state-owned Peoples Farms. These farms cover a total
areaof 2.6 million hectares and comprise about 29 percent of the total
farmland. The main occupation of the Peoples Farms is the raising of
livestock, and these farms are of only minor significance in the sugar
industry.
It is too early at this time to evaluate the effect of this govern-
ment control and reorganization of the sugar industry, although there
are indications that economic incentives have been diminished by the
changes.
III. Quantitative Aspects
A. Output
The raising of sugarcane and the extraction of raw sugar from
the cane form the keystone in the Cuban economic structure. More than
one-half of the total harvested area of Cuba is devoted to production
of cane. Because traditionally not all of the sugarcane crop is har-
vested, the allocation of Cuban land resources to production of cane
is even greater than a measure based only on harvested area would
indicate.
Although Cuba is a small country by most standards, it accounts
for about 12 percent of the annual world production of raw centrifugal
sugar, including that derived from both cane and beets. The statistical
relationship between the annual output of sugar in Cuba and the world
total is shown in Table 1.*
Because the population of Cuba amounts to only 7 million people,
the large Cuban output of raw sugar obviously cannot be consumed do-
mestically. Traditionally, Cuba consumes only about 5 percent of its
domestic production and exports the remainder. In terms of world ex-
ports of raw sugar, the Cuban share tends to approximate one-third of
the annual total, as shown in Table 2.**
Table 1 follows on p. 7.
Table 2 follows on p. 7.
S-E-C R-E.JT
Approved For Release 2000/04/18 : CIA-RDP79T01049A002400110001-2
 Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
Production of Raw Centrifugal Sugar
1955-61
Year
World
(Thousand Metric Tons)
Cuba
(Thousand Metric Tons)
Percent
of Total
1955
38,581
),528
11.7
1956
39,770
),7)0
11.9
1957
)3,868
5,672
12.9
1958
)7,108
5,779
12.3
1959
)9,557
5,964
12.0
1960
52,627
5,862
11.1
1961
N.A.
6,768
N.A.
Exports of Raw Centrifugal Sugar
1955-61
Year
World
(Thousand Metric Tons)
Cuba
(Thousand Metric Tons)
Percent
of Total
1955
1),053
),657
33.1
1956
13,918
5,))0
39.1
1957
15,29)
5,307
3).7
1958
15,280
5,632
36.9
1959
1),835
4,952
33.4
1960
17,565
5,63)
32.1
1961
N.A.
6Y413 J
N.A.
-7-
S-E-C-R-E-T
Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
 Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
S E-C-R-E-T
The yield of raw sugar per harvested hectare in Cuba is low
compared to yields in other cane-producing areas. From 1955 through
1960, yields of sugar averaged 5.1 tons per hectare. This yield is
less than one-half of the yield obtained in Hawaii, Peru, Java, and
Taiwan. The extensive nature of production of Cuban sugarcane is
partly obscured by the fact that Cuba has one of the highest recovery
rates of raw sugar from sugarcane. Cuba has an abundance of land to
use for the growing of sugarcane and thus has low yields of cane per
unit of land area. Once the cane is harvested, however, its sugar
content is efficiently extracted at the mill.
International comparisons of yields of cane sugar per unit
of land areas are complicated by the fact that some cane-producing
areas -- for example, Hawaii and Peru -- require a growing season of
up to 2 years, whereas other areas such as Louisiana require no more
than 10 months. Cuba requires 12 to 14 months. Also, some regions
must replant completely every year, whereas others need replant only
a fraction of the total cane area.
Cuban yields per unit of land area reflect no well-defined
trend in the period from 1955 through 1960, as shown in Table 3.* No
conclusions can be drawn concerning the apparently low yield in 1961,
because of the fact that the estimate of harvested area for that year
requires further validation.
Cuba has the potential to increase production of sugar sub-
stantially without increasing the land area devoted to cane. This
increase can be accomplished by the utilization of more intensive
techniques of production of cane including greater emphasis on the
application of fertilizers and the wider use of irrigation.
End-of-year stocks of raw sugar in Cuba averaged 970,000 tons
during the period 1955 through 1960. Stocks on hand at the end of
1961 are estimated to have been somewhat above this average. The
volume of end-of-year stocks in the last 3 years (1959-61) has tended
toward a level almost double that of the previous 3 years (1956-58),
as shown in Table 4.**
* Table 3 follows on p. 9.
** Table 4 follows on p. 10.
S -E -C -R E -T
Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
 Approved For Release 2000/04/18 : CIA-RDP79TO1049AO02400110001-2
O\
LC\
O\
H
00
LC\
O\
r-I
N
LC\
O\
H
LC\
O\
r-I
LC\
H
\O N
(Y) \,O
O cO
N dl
O C-
r-H LC\
Ln
LC\ CV