{"id":321373,"date":"2025-04-18T08:20:43","date_gmt":"2025-04-18T12:20:43","guid":{"rendered":"https:\/\/oncubanews.com\/en\/?p=321373"},"modified":"2025-04-18T08:20:43","modified_gmt":"2025-04-18T12:20:43","slug":"of-incentives-and-marabu-charcoal","status":"publish","type":"post","link":"https:\/\/oncubanews.com\/en\/opinion\/columns\/counterbalance\/of-incentives-and-marabu-charcoal\/","title":{"rendered":"Of incentives and marab\u00fa charcoal"},"content":{"rendered":"

And yes, we are in Holy Week. Holy Week brings back my own image of an 11-year-old boy standing in front of the bus door that would take him on the adventure of his first volunteer work. It also brings back the sound of my father\u2019s words, whispering in my ear: \u201cIf you get on that bus, you have to come back on it and with everyone.\u201d<\/span><\/p>\n

It was a very typical version of that phrase the Roman soldiers used when they marched to their wars of conquest: \u201cWith the shield or on the shield.\u201d Needless to say, I returned on the bus with all my classmates.<\/span><\/p>\n

I tell this anecdote because it was during that first volunteer stint that I first had a personal encounter with marab\u00fa. Our task was to clear lands designated for intensive rational grazing, a technology recommended by a French scientist named Voisin, which seemed like it would be the solution for livestock farming in our country.<\/span><\/p>\n

I never imagined that marab\u00fa and cows would accompany me throughout my life, and not because I dedicated myself to being a botanist or a cowboy.<\/span><\/p>\n

At 11 years old, I discovered how hard marab\u00fa was. Later, and to my disappointment, I saw how the cows didn\u2019t understand Voisin\u2019s ideas. I also realized that marab\u00fa was not only hard but also very resilient. This toughness has made it an ideal plant for charcoal production.<\/span><\/p>\n

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Photo: Yunier Ordan Olivia.<\/figcaption><\/figure>\n

Marab\u00fa charcoal has become a highly prized commodity because, in addition to being exportable, it is now an essential resource for cooking food in Cuban homes where electricity is rarely available and liquefied gas is only occasionally available.\u00a0<\/span><\/p>\n

Today, a bag of charcoal (marab\u00fa, gu\u00e1sima, alm\u00e1cigo, and even ipil ipil \u2014 a plant more invasive than marab\u00fa itself) sells on Havana\u2019s first ring road for between 1,700 and 2,000 CUP.<\/span><\/p>\n

I once heard that a hectare of marab\u00fa, \u201cwell planted\u201d and \u201csufficiently mature,\u201d can produce between 20 and 40 tons of dry matter. If the production process (pyrolysis) reaches an efficiency of 25%, between five and 10 tons of marab\u00fa charcoal could be obtained per hectare. How many hectares of marab\u00fa are planted today in the country?<\/span><\/p>\n

Let\u2019s say half a million; thus, calculating about eight tons per hectare, we have a production potential of 4 million tons of charcoal, of which a portion \u2014 perhaps 70%, to be optimistic \u2014 is of exportable quality. We would have about 280 million potential tons.<\/span><\/p>\n

But of course, there\u2019s no way to harvest all those hectares. If we \u201charvest\u201d 20% (100,000 hectares) annually, we would have 800,000 tons, with about 560,000 of exportable quality. If the international price is around $300\/ton, the math gives us an income of $168 million. Under our current conditions, that\u2019s a lot of money and attracts more than a little attention.<\/span><\/p>\n

And then, Ministry of Economy and Planning Resolution 25 of 2025 emerges, stating \u201cto increase and control the country\u2019s foreign currency earnings from the export of charcoal, which constitutes one of the exportable products with the greatest potential for increasing its production, marketing, and diversification, (which is why, JT), it is necessary to implement a foreign currency financing scheme for this activity.\u201d<\/span><\/p>\n

We\u2019ve already discussed the potential for charcoal production. Let\u2019s now identify the instruments that incentivize production and exports, and the \u201creorganization\u201d of the activity, which is the purpose of the new resolution that allows \u201ccharcoal\u201d to access a closed foreign currency financing scheme.<\/span><\/p>\n

    \n
  1. A foreign currency financing scheme is approved for state-owned exporting entities that are part of the financial scheme for charcoal marketing. Therefore, they will not require subsidies, thus eliminating a distortion.<\/span><\/li>\n
  2. \u201cState-owned charcoal exporting entities begin to operate a new real foreign currency account in the banking system.\u201d In other words, translated into the old terms, it is an account that has liquidity or is backed by liquidity. It is also very important to make it clear that state-owned exporting entities, with the foreign currency they retain, cannot conduct foreign currency transactions unrelated to the inputs and insurance necessary for the production and marketing of vegetable charcoal. Commercial banks will retain transactions that do not meet these requirements.<\/span><\/li>\n
  3. \u201cPayment to the producer is made to a <\/span>real foreign currency account<\/span><\/i> through which they have access to purchase options on the network of wholesale and retail foreign currency markets, including payment in USD for the fuel they require.\u201d In other words, it\u2019s not an unreal account, nor is it imaginary; it\u2019s an account that is backed by liquidity. This is very important because, although producers cannot transfer money from that account to other foreign currency accounts or withdraw cash, it allows them to carry out transactions that previously they couldn\u2019t, and in a much more transparent manner.<\/span><\/li>\n<\/ol>\n

    Export revenues are distributed as follows. Of every 100 cents of exports:<\/span><\/p>\n