A History of the Sugarcane Industry in Cuba

When the Spanish settled in Cuba, they saw the possibility of profit on a fertile island. Crops of tobacco, sugarcane, and coffee were some of the natural resources that offered a flourishing economy. Sugarcane quickly became Cuba’s primary product and an important world producer (www.nationmaster.com/encyclopedia/History-of-Cuba). Sugar also became a product of economic disaster that would lead to the collapse of an abundant country’s economy. The United States’ involvement in sugar production may have been the cause. Did the United States help or destroy the Cuban economy with their “investment” in the sugar business? Was there any benefit whatsoever for the Cubans, or just the Americans? Did the United States’ involvement push Cuba into the hands of Communism? Did Fidel Castro take a wrong turn for Cuba’s economy when he looked to the Soviet Union? To possibly find some kind of answer to these questions, it is important to look back a little to see how sugar lead Cuba to become financially dependant on other countries because of their “cash” crop.

During the period of the Napoleonic Wars (1792-1815), sugarcane crops grew strong as demand for the product increased, resulting in Cuba’s prosperity. This demand led to introducing more capital into the crop’s production. This capital was based on foreign investment and trade, resulting in investments from the United States. Trade between Cuba and other countries, especially the United States, increased. Eventually, trade began Cuba’s dependence on other countries to survive. Even though Cuba had strong products for export, they leaned on other countries’ imports for their own consumer goods.

After 1878, Cuba’s sugar industry had strong competition from European beet-sugar producers, leading them to strongly rely on the U.S. market. This U.S. market was a monopoly controlled by the American Sugar Refining Company. This company controlled 19 sugar refineries in Cuba and supplied the U.S. with 70 to 90% of its sugar. This basically allowed the company to set whatever prices they wanted. It also allowed the restructuring of the sugar industry in Cuba by streamlining smaller, less productive mills into fewer larger ones, reducing not only monetary losses for them, but production and work for the Cubans working in this industry (www.cubafacts.com/History/hisprelude.htm).

The involvement of the United States in the early part of the 20th century changed how the sugar industry was run to a large degree. World War I caused a boom in the industry because of railroad expansion which gave more inland sugar mills access to the sea in order to get the sugar out. One might consider this as just more exploitation of Cuba’s resources. Hires and Company, the Armour Corporation, and the Hershey Corporation took full advantage (Ayala, pg. 218). This added to the economy of the U.S., not Cuba. Between 1914 and 1934, new American sugar mills were much bigger than the average Cuban sugar mill. By the 1920s, the United States monopolies ultimately crushed Cuba’s manufacturing industries. Companies in the United States owned two-thirds of Cuba’s fertile farmland. The American Sugar Refining Company owned two of these new “mega” mills, the Cunagua and the Jaronu.. From 1928 to 1929, they produced over 180,000 tons of sugar. Two of the Cuba Cane Sugar Corporation mills, the Elia and the Cespedes, only produced about 93,000 tons between the both of them. The Cuban sugar mills could just not compete with the American ones (Ayala, pg. 217). What crushed their industries were the tariffs imposed by these companies that Cuba relied on for their economic livelihood.

Once the Great Depression hit, Cuba began battles of civil unrest and changes in Cuba’s government. These changes were not necessarily better for the economy. The first coup d’etat was that of President Gerado Machado y Morales in 1933. He was then replaced by an army sergeant named Fulgencio Batista. President Batista had complete control over Cuba’s economy and got the country financially involved with many illegitimate relationships. Corruption and other criminal activities involved with Cuba would ruin any chances of economic recovery. At one time, Cuba’s casinos were flowing into the country’s revenues, but it was ruined by Batista’s alliances with Meyer Lansky, an American Mafia boss, who paid Batista for control of all the casinos. Cuba deteriorated over the next twenty years, losing its only assets to foreign “investments”. Cuban citizens had none of the living standards that Batista and his people had. Unemployment rates also grew rapidly. This made Cuba’s economy and future even more dependant on other countries, leading them into a Revolution and then later into communist hands.

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