Tag: cooperatives

The Land Is There, the Cubans Are There, but the Incentives Are Not

The Washington Post has an interesting story today on the program of the Cuban government to transfer idle state-owned land to private farmers so they can resurrect the dilapidated agricultural sector on the communist island. As Ian Vásquez and I wrote in the chapter on U.S. policy toward Cuba in Cato Handbook for Policymakers, before this reform, the agricultural productivity of Cuba’s tiny non-state sector (comprising cooperatives and small private farmers) was already 25 percent higher than that of the state sector.

At stake is an issue of incentives. Collective land doesn’t give farmers an incentive to work hard and be productive, since the benefits of their labor go to the government who distributes them (in theory) evenly among everyone, regardless of who worked hard or not. While with private property, “The harder you work, the better you do,” as a Cuban farmer said in the Post story.

The country’s ruler, Raúl Castro, recently declared that “The land is there, and here are the Cubans! Let’s see if we can get to work or not, if we produce or not… The land is there waiting for our sweat.” However, it’s not a matter of just having land and lots of people. It’s also a matter of incentives to produce. Failing to see this, as in the case of Cuba’s failed communist model, is a recipe for failure.