A staggering debt exceeding 150 million pesos owed to private dairy producers has virtually halted milk production in Sancti Spíritus, a key province for Cuba's milk supply. This crisis directly affects the availability of milk intended for vulnerable groups such as children, pregnant women, and individuals with medical diets.
The issue was highlighted by the state-run newspaper Trabajadores, which detailed a chain reaction of unpaid debts that began in the last quarter of 2024. This financial turmoil has ensnared producers, industries, and state entities connected to the dairy sector, resulting in a "domino effect" that ultimately disrupted milk supplies.
Alberto Cañizares Rodríguez, head of the Río Zaza Dairy Products Company, reported that they managed to recover some outstanding payments after disputes with debtor companies. This recovery enabled them to clear payments for October and November. However, the December dues remain unpaid because the bank credit received cannot be applied to previous year's debts, as noted by Trabajadores.
Cañizares pointed out that entities like the Sancti Spíritus Business Group of Commerce and the dairy complexes in Havana and Artemisa still owe Río Zaza nearly 200 million pesos. The industry is further crippled by collection failures, power outages, and high distribution costs, according to Trabajadores.
In 2024, the company collected 27 million liters of milk, with seven million considered as overproduction. Unfortunately, instead of using this excess to produce income-generating derivatives, it was directed towards state orders, leading to further losses, emphasized the news outlet.
"We are subsidized for milk up to 39 pesos, but delivering it to the store costs 45, and extra collected milk is paid at 70 pesos. We lose over 30 pesos per liter," admitted Cañizares. This situation has also led to milk being diverted to the informal market, where it fetches better prices and cash payments.
Producers like Modesto Ibarra Socarrás from the CCS Primero de Enero and Luis Caraballé Fernández from the Ñico López cooperative highlighted the challenges they face in receiving due payments. "The nearest cash point is 30 kilometers away, and many farmers cannot leave their farms or don't have phones. Cash is essential," lamented Caraballé, illustrating the rampant bureaucracy and inefficiency in the country.
Additionally, the crisis is exacerbated by drought, cattle theft, and cash access problems. Some farmers, unable to receive timely payments, have resorted to processing their own milk or selling it directly. From the cooperative sector, voices like Ernesto Cordoví, president of the CCS José Regino Sosa, noted that some organizations have used their own funds to ensure production continues. Yet, the severe cash flow issues remain a significant threat to the system's stability, acknowledged Trabajadores.
During the plenary session of the 13th ANAP Congress in Sancti Spíritus, the dignity of the farming community was acknowledged, but it was stressed that no commitment can endure without fair and timely compensation. "Fulfilling goals cannot depend solely on the farmers' goodwill but on real incentives," stated Eidy Díaz, provincial president of the organization.
Since late 2023, Cuba's dairy industry has shown clear signs of structural collapse. In November, the then Minister of Food Industry admitted that the country lacked sufficient milk to meet the population's needs, aiming only to supply "a portion" to the most vulnerable groups—a stark admission of the state's limitations in ensuring an essential product.
A month later, the government declared that powdered milk would only be distributed to children aged zero to six, excluding pregnant women and other traditionally supported groups. This decision sparked outrage and highlighted the worsening shortage.
In the same month, the minister addressed the National Assembly, attempting to justify the state's inability to maintain basic supplies by citing financial and logistical challenges, without offering sustainable solutions to the deputies.
The crisis extended beyond the mere lack of product. In Ciego de Ávila, the absence of powdered milk led to its replacement with a "vitamin drink" for children's diets. This decision faced harsh criticism from nutritionists and families, who deemed it inadequate both nutritionally and symbolically, reflecting a historical neglect of the Cuban state's commitments.
In response to growing discontent and reports of milk being diverted to the informal market, the regime promised in February to severely punish those responsible for the failures. However, these threats were not accompanied by structural reforms to ensure payments to producers or an incentive scheme to reverse the collection decline.
Key Questions on Cuba's Dairy Crisis
What is the main cause of the dairy production halt in Sancti Spíritus?
The primary cause of the dairy production halt in Sancti Spíritus is a significant debt exceeding 150 million pesos owed to private producers, leading to financial instability and supply chain disruptions.
How has the milk shortage affected vulnerable groups in Cuba?
Vulnerable groups such as children, pregnant women, and individuals with medical diets are directly impacted by the milk shortage, as these groups rely heavily on state-supplied milk.
What measures have some farmers taken in response to delayed payments?
Some farmers, facing delayed payments, have started processing their own milk or selling it directly to mitigate financial losses.
What structural issues have been identified in Cuba's dairy industry?
Cuba's dairy industry suffers from structural issues such as unpaid debts, collection failures, and high distribution costs, compounded by power outages and cash access problems.