{"id":327600,"date":"2025-08-27T19:48:04","date_gmt":"2025-08-27T23:48:04","guid":{"rendered":"https:\/\/oncubanews.com\/en\/?p=327600"},"modified":"2025-08-28T19:17:42","modified_gmt":"2025-08-28T23:17:42","slug":"what-happened-to-cooperatives-in-cuba-a-review-after-more-than-a-decade-of-updating","status":"publish","type":"post","link":"https:\/\/oncubanews.com\/en\/opinion\/what-happened-to-cooperatives-in-cuba-a-review-after-more-than-a-decade-of-updating\/","title":{"rendered":"What happened to cooperatives in Cuba? A review after more than a decade of \u201cupdating\u201d"},"content":{"rendered":"

Do you remember the new Cuban economy with greater cooperative participation that was promised as part of the \u201cupdating\u201d that began more than a decade ago? The main documents leading this reform process, the <\/span>Guidelines and Conceptualization<\/span><\/i>, and the new 2019 Constitution, establish that cooperatives should be the second most important business form after state-owned enterprises, that they should contribute to solving local problems and that they should receive special attention from the State.<\/span><\/p>\n

Well, instead of the consolidation and expansion of the Cuban cooperative sector, what we have seen is a decline in the total number of cooperatives and their members or associates (\u201cpartners\u201d). The cooperative fad passed quickly: just a couple of years. In fact, the word \u201ccooperatives\u201d seems to have almost disappeared from the vocabulary of public officials, and even from the official media.<\/span><\/p>\n

How are Cuban cooperatives doing more than a decade after the promise of a more social and solidarity-based economy? What explains this current situation in which cooperatives seem to have disappeared from public policies and even from the discourse of public officials, and private companies receive more government attention and a more favorable (or less unfavorable) environment than cooperatives? Could it be that the pause for cooperatives will never end?<\/span><\/p>\n

Evolution over last decade<\/b><\/h3>\n

According to the National Office of Statistics and Information (ONEI), at the end of 2024 there were 5,107 cooperatives in Cuba, of which 481 were non-agricultural cooperatives (CNA) and the rest (4,626) were agricultural: 2,429 CCS, 837 CPA, and 1,360 UBPC.<\/span>1<\/b><\/sup><\/p>\n

As can be seen in Chart 1, this represents a net decrease compared to 2023, with 25 fewer cooperatives, due to a reduction in agricultural cooperatives, almost all of them UBPCs, while the total number of CNAs remained the same.<\/span><\/p>\n

Chart 1. Cuban non-state enterprises, by type of ownership (2012-2024)<\/b><\/p>\n

\"\"<\/a>
Source: Prepared by the author, based on \u201cOrganizaci\u00f3n Institucional. Principales Entidades. Marzo de 2025,\u201d<\/a> ONEI, 2025.<\/span><\/figcaption><\/figure>\n

Most alarming is that the number of agricultural cooperatives has decreased at a much faster rate than in previous decades. While until 2011, an average of 24 UBPCs and 3 CPAs were dissolved annually, between 2012 and 2024 these figures increased to more than 60 UBPCs and 15 CPAs dissolved annually.<\/span><\/p>\n

Thus, by the end of 2024, there were a total of 1,367 fewer agricultural cooperatives, equivalent to 77% of the number in 2012: 67%, 83% and 82% of UBPCs, CCSs and CPAs, respectively. It is important to note that, unlike in previous decades, when the number of CCSs fluctuated slightly, they have also decreased in the last decade.<\/span>2<\/b><\/sup><\/p>\n

Regarding CNAs, a growth of more than 400 was recorded between 2012 and 2017. This growth, compared to other countries and considering the experimental nature of the legislation and the limited two-year approval period, was impressive.<\/span><\/p>\n

Before the approval of the new regulations at the end of 2020, around 439 CNAs had been created, of which 421 still existed at the end of 2020; meaning that only 18 were dissolved after 3 to 5 years.<\/span><\/p>\n

Since then, a net growth of only 60 CNAs has been recorded, evidencing a considerable slowdown in their growth and suggesting that other CNAs have been dissolved, some due to their conversion to private MSMEs, while others have not survived all the shocks analyzed below.<\/span><\/p>\n

Chart 2 shows that cooperative membership has decreased by 88,400 people from 2012 to 2023, representing 85% at that time. Within the non-state sector, the private sector has achieved a greater share of productive employment (26.2%) than the cooperative sector (11.4%), with all the economic, social and cultural implications this entails.<\/span><\/p>\n

Chart 2. Non-state employment in Cuba, by type of company (2012-2023; in thousands of people)<\/b><\/p>\n

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Source: Prepared by the author, based on \u201cEmpleo y Salarios\u201d (Employment and Wages) in the Cuban Statistical Yearbook 2023, ONEI, 2024.<\/figcaption><\/figure>\n

Main shocks and challenges<\/b><\/h3>\n

During the last decade, a \u201cperfect storm\u201d has occurred, affecting even those Cuban cooperatives with solid governance and efficient business management. They have faced enormous challenges resulting from an unfavorable legal environment and a series of national and international external shocks:<\/span><\/p>\n

    \n
  • Redistribution of idle lands, which prioritized private farmers over cooperatives.<\/span><\/li>\n
  • Barriers to cooperatives developing their own supply and marketing channels and meeting the needs of their members.<\/span><\/li>\n
  • Impediment \u2014 until recently \u2014 to creating second-level cooperatives.<\/span><\/li>\n
  • Reorganization Task, which unleashed hyperinflation, de facto dollarization and recentralization, and affected cooperatives the most due to their closer ties (for purchases, sales and rentals of premises) with state-owned enterprises and their greater transparency.<\/span><\/li>\n
  • Regulatory changes that imposed severe limits on their operations and even their management autonomy nullified the advantages cooperatives had enjoyed in terms of so-called \u201cpreferential treatment\u201d and opened the door to demutualization.<\/span><\/li>\n
  • Absence of public policy, legislation and institutional framework necessary for the development of cooperatives.<\/span><\/li>\n<\/ul>\n

    Redistribution of idle land<\/b><\/h3>\n

    A major shock that agricultural cooperatives have suffered since the beginning of the last decade has been the redistribution of idle land policy initiated in 2008, which has prioritized private farmers (individual or family) over cooperatives.<\/span><\/p>\n

    This encouraged cooperative members to abandon them to obtain their own land and better incomes. At the same time, it particularly weakened the CCSs, as they were overwhelmed with the obligation to train and provide services to new beneficiaries, even if they were not members.<\/span><\/p>\n

    Between 2007 and 2018, management of 20% of agricultural land was transferred from cooperatives, primarily UBPCs, to private farmers, while the amount of land under state management remained almost unchanged.<\/span><\/p>\n

    While it was absolutely necessary to put idle land to work, the design and implementation of this measure reflected a contradictory policy shift toward agricultural cooperatives.<\/span><\/p>\n

    It revealed the abandonment of decades of recognition of the cooperative model as the best ally of the individual or family farmer, and a lack of knowledge about the central role that cooperatives have historically played, not only in the nation\u2019s food security, but also in the economic, social and cultural development of rural communities.<\/span><\/p>\n

    \"\"<\/a>
    Photo: Kaloian.<\/figcaption><\/figure>\n

    Access to inputs<\/b><\/h3>\n

    The redistribution of land into more private hands has increased pressure on inputs (seeds, fertilizers, fuel, etc.) and services (plowing, harvesting, transportation, etc.), controlled by state monopolies, and has reduced cooperatives\u2019 access to them.<\/span><\/p>\n

    In recent years, this shortage of agricultural inputs has been critical: agricultural cooperatives currently have access, at best, to 30% of the inputs they had in 2019.<\/span><\/p>\n

    For both agricultural and non-agricultural cooperatives, barriers persist to their developing their own supply and marketing channels and meeting the needs of their members.<\/span><\/p>\n

    While the private sector has been able to be \u201ccreative\u201d in its provisioning and it has even publicly acknowledged its access to the black market, cooperatives face limitations in creating accounts in freely convertible currency (MLC), importing and exporting, and are unable to fund their MLC accounts except through exports.<\/span><\/p>\n

    Even when they can export and earn foreign currency (MLC), they cannot use it because the state-owned importing enterprises that sell them in MLC lack supplies.<\/span><\/p>\n

    Second-level cooperatives<\/b><\/h3>\n

    Until recently, agricultural cooperatives have been prevented from creating second-level cooperatives.<\/span><\/p>\n

    It is inexplicable that the promotion of these cooperatives of cooperatives, which would solve supply problems and many others, and which have demonstrated their validity and great potential internationally, is not at the center of efforts to increase agricultural production.<\/span><\/p>\n

    Reorganization Task<\/b><\/h3>\n

    Cooperatives, like all Cuban business forms, were hit hard starting in 2020 by the so-called Reorganization Task, as it generated hyperinflation and de facto dollarization, accompanied by greater recentralization in the state sector.<\/span><\/p>\n

    But the Reorganization Task had three additional blows that affected cooperatives much more severely, due to their closer ties to \u2014 or dependence on \u2014 state-owned enterprises for their supplies, sales and rental of premises.<\/span><\/p>\n

    The prices of inputs purchased from state-owned enterprises multiplied, exceeding what the cooperatives could charge for their products.<\/span><\/p>\n

    Many of the cooperatives\u2019 clients were state-owned enterprises or institutions, which set disproportionately low prices, halted their purchases for many months and subsequently made downward adjustments.<\/span><\/p>\n

    The CNAs also suffered disproportionate increases in rents for state-owned premises and operational restrictions associated with the Reorganization Task.<\/span><\/p>\n

    Hyperinflation and the need for foreign currency to access inputs further limited the cooperatives. Unlike private ventures, the governance of cooperatives prevents them from operating effectively in the informal market for dollars and productive inputs.<\/span><\/p>\n

    It is more difficult for cooperatives to access the black market because they must be transparent with their members, and one secret among many is no longer a secret.<\/span><\/p>\n

    \"\"<\/a>
    Photo: Kaloian.<\/figcaption><\/figure>\n

    Regulatory changes<\/b><\/h3>\n

    On the other hand, the regulatory changes of 2018-19 and 2023 (for agricultural co-ops) and of 2019, 2021 and 2024 (for non-agricultural co-ops), while included some steps forward, have resulted in three impacts for cooperatives.<\/span><\/p>\n

    On the one hand, especially those of 2018-19, they imposed some serious limits on their operations and even on their management autonomy, which have only been partially overcome.<\/span>4<\/b><\/sup><\/p>\n

    The most recent regulations finally recognized cooperative autonomy, but at the same time \u2014 under the new (neoliberal) dogma of \u201clevel playing field for all enterprises\u201d \u2014 they nullified the advantages that cooperatives had in terms of so-called \u201cpreferential treatment.\u201d<\/span>5<\/b><\/sup><\/p>\n

    Currently, these advantages have been reduced to a lower tax burden, which, in practice, has also been nullified by the effects of the Reorganization Task and the operational barriers already analyzed.<\/span><\/p>\n

    Furthermore, these regulations opened the door to the demutualization or <\/span>conversion of cooperatives to MSMEs<\/span><\/a>, while not even mentioning how an MSME that reaches the maximum of 100 employees could be converted into a CNA.<\/span><\/p>\n

    Cooperatives converted to private MSMEs: urgent need to correct regulations<\/a><\/p><\/blockquote>\n