In October 1994, the Cuban government opened 121 agricultural markets throughout the country.31 As an immediate consequence, the black market in basic food items virtually disappeared. Food prices in the open market were a good deal less than on the black market. The free markets also quickly demonstrated that they led to increased production and spurred higher quality and greater diversity in produce.
Over time, however, supply and demand pricing did result in rising food prices. By the year 2000, food purchases could take up as much as 60 percent of the average Cuban salary. The poor and the elderly turned to urban vegetable stands offering produce from urban gardens.
Studies have shown that the major culprit in rising market prices were the distributors. The lack of fuel in Cuba has resulted in severe transportation shortages. The few people who did own trucks colluded to pay little to the farmers and then charge high prices to the vendors. Some distributors have gained profits of as much as 75 percent.34
To combat this problem, the Ministry of Agriculture is giving used trucks to private cooperatives to allow them to bypass the distributors and take their goods directly to market. The remaining state farms are also selling their produce at low prices in state agricultural markets, in an effort to drive down prices. The experiment in free agricultural markets has shown Cubans that there must be some government controls on price gouging and collusion.
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