Voluntary Report - public distribution

**Date:** 8/22/2005

**GAIN Report Number:** CU5002

CU5002

**Cuba**

**Market Development Reports**

**Hurricane Dennis\' Impact on Cuba Agriculture**

**2005**

**Approved by:**

![](media/image1.wmf)Omar Gonzalez, Acting Director

Caribbean Basin ATO

**Prepared by:**

William A. Messina. Jr. & Thomas H. Spreen, University of Florida

**Report Highlights:**

This report was prepared by William A. Mesina, Jr., Coordinator of
Economics Analysis, and Thomas H. Spreen, Professor and Chair, both of
the Food and Resource Economics Department, Institute of Food and
Agricultural Sciences, University of Florida. The report highlights the
effects of hurricane Dennis (July 2005) on Cuba\'s agricultural sector
as well as on other economic sectors.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Miami \[C11\]

\[CU\]

**Hurricane Dennis' Impact on Cuban Agriculture**

William A. Messina, Jr. and Thomas H. Spreen[^1]

**[GENERAL INFORMATION]{.underline}:**

Between July 7 and July 9, 2005, Hurricane Dennis moved along the
southern coast of Cuba then moved across the island, enveloping nearly
the entire country with strong hurricane and tropical force winds and
driving rain. This was the fourth major hurricane to strike Cuba in the
last four years. As a Category 4 storm on the Saffir-Simpson Hurricane
Scale[^2] when it came ashore in central Cuba on July 8, Hurricane
Dennis brought with it sustained winds reported at nearly 150 mph (240
kph) and wind gusts as high as 155 mph (250 kph), making it the
strongest hurricane to strike Cuba in four decades (Havana Journal, July
10, 2005).

As Hurricane Dennis approached southeastern Cuba on July 7, the U.S.
National Hurricane Center (NHC) reported that hurricane force winds
extended outward for 50 miles from the center of the storm, while
tropical storm force winds extended for up to 140 miles from the center.
Prior to the eye of Hurricane Dennis making landfall in central Cuba,
the storm traveled parallel to Cuba's shoreline south of the island,
blanketing Cuba's eastern-most provinces with tropical storm force winds
and very heavy rainfall, which the NHC reported could be as high as 5 to
10 inches and possibly as high as 15 inches over the Sierra Maestra
mountains in southeastern Cuba. Cuba has been experiencing severe
drought conditions for the last few years, particularly in the eastern
portions of the island, so rainfall associated with the storm allowed
notable replenishment of some of the nation's water reservoirs and
presumably helped to replenish groundwater resources. Such heavy
rainfall amounts over a short period of time, however, caused serious
flooding problems in many areas, including the destruction of an
important road between Santiago de Cuba and Granma provinces in the
Sierra Maestra Mountains. Prensa Latina (July 12, 2005a) reported that
20 km of Cuba's railway lines were destroyed by the storm.

Hurricanes typically tend to move across Cuba's long and relatively
narrow land area. However, after moving parallel to Cuba's south coast
just offshore, the eye of Hurricane Dennis move onshore on the southern
coast in the central portion of the island near the port city of
Cienfuegos (Map 1) at about 1PM on July 8. Once it made landfall, the
storm traveled slowly west-northwest across a major portion of the
island until it exited at Guanabo, approximately 30 km east of the city
of Havana as a Category 1 hurricane (Bauzá; July 9, 2005; Boadle, July
9, 2005). The eye of the storm was over land in Cuba for about 11 hours.

Because of its path, Hurricane Dennis directly and significantly
impacted 12 of Cuba's 14 provinces (all but Cuba's western-most province
Pinar del Rio and the Isle of Youth, off Cuba's southwest coast),
affecting eight million of Cuba's total population of over 11 million
(UN-OCHA, July 13, 2005).

Map 1. Path of Hurricane Dennis.

![](media/image2.wmf){width="4.995833333333334in"
height="3.751388888888889in"}

The hurricane caused 16 deaths in Cuba,[^3] the most of any storm since
Hurricane Flora in 1963, which caused over 1,100 deaths and prompted a
complete restructuring of Cuba's emergency preparedness systems, which
now rank among the best in the developing world.[^4] Over 1.5 million
Cubans were evacuated in advance of the storm, along with nearly 17,000
tourists (Reuters, 11 July 2005).

Initial estimates of economic damage from Hurricane Dennis are in excess
of \$1.4 billion, although in a televised speech and program on July 11
and 12 Fidel Castro indicated that had the storm struck the city of
Havana directly, damage could have exceeded \$3 billion (Oramas, July
12, 2005).

Storm assessment and recovery efforts have been hampered by severe
damage to electrical and communications services across the island from
Hurricane Dennis. These include the destruction of over 1,000 electrical
power poles, 28 radio and communication relay towers, 4 television
towers, and 39 high voltage electric towers by the storm's ferocious
winds (Reuters, July 11, 2005; Prensa Latina, July 12, 2005a).

Initial reports indicate that more than 120,000 homes were damaged by
the storm, 15,000 of which collapsed; 24,000 of which had their roofs
blown off; 60,000 of which had partial roof damage; and 25,000 of which
had other damage (UN-OCHA, July 13, 2005). Over 73,000 Cuban people are
reported to be homeless and nearly 160,000 do not have adequate shelter
as a result of damages caused by the storm (Havana Journal, July 11,
2005). Significant damage also has been reported to schools, stores, and
factories throughout the island along with 160 health facilities,
including clinics, hospitals, and physicians' offices.

Cuba's official newspaper Granma reported on July 12 that 2.5 million
people (over 20 percent of the Cuban population) were without running
water due to damage to water distribution systems, contamination of
water supplies, and/or the lack of electrical power to run water pumps
(Oramas, July 12, 2005). The affected areas are reportedly being served
by water tankers until such time as their systems are repaired, cleaned,
or otherwise back in service.

**[AGRICULTURE]{.underline}:**

Because of the communications disruptions caused by the storm, it has
been particularly difficult to obtain detailed information from rural
areas on the nature and extent of damage to Cuba's agricultural sector.
Preliminary reports, however, indicate that the damage to agriculture
throughout the central portions of the island was extensive, which would
be consistent with the damage expected from a storm of this magnitude
(UN-OCHA, July 13, 2005).

**[Citrus]{.underline}**

The impact on Cuba's citrus industry is expected to be particularly
significant as the storm passed directly over some of Cuba's most
important citrus producing areas, including the groves at Jagüey Grande,
the largest contiguous planting of citrus trees in the world. In a
broadcast speech by Cuban President Fidel Castro on July 11, he reported
that "the entire crop of citrus fruits \[in the region\] was lost --
200,000 tonnes of grapefruit fell from the trees, as did 160,000 tonnes
of oranges. At hundreds of dollars per tonne, that's a huge loss for our
exports" (Mail & Guardian Online, July 12, 2005). Separately, a Reuters
news service report from Cuba indicated that the storm uprooted citrus
trees and that most of the projected 250,000 metric ton grapefruit
harvest was knocked off the trees and lost in the groves in Jagüey
Grande along with a similar volume of oranges anticipated for the 2006
crop (Frank, July 11, 2005). Other reports indicate losses to the citrus
production could be as high as 360,000 metric tons (MT).

Although the production area for citrus in Cuba has contracted in recent
years, yields have increased substantially with production in 2002-03
estimated at nearly 800,000 MT. Of this total, approximately 480,000 MT
were round oranges and 227,000 MT were grapefruit. Jagüey Grande
accounts for approximately 50 percent of Cuba's total citrus production
and about 75 percent of Cuba's citrus exports (Muraro, et al., 1998).

Cuba's grapefruit harvest typically begins in August, so the fruit was
almost ripe when Hurricane Dennis struck, and therefore vulnerable to
the high winds associated with the storm. Given the experience of the
Indian River citrus-producing region of east Florida with hurricanes in
2004, it is likely that nearly the entire grapefruit crop in the Jagüey
Grande area was destroyed by Hurricane Dennis.

Nearly all of Cuba's round orange production is Valencia. Given the
relative immature state of the Valencia crop, it is likely that Valencia
production will be affected less relative to grapefruit, but the
experience of Hurricane Charley in southwest Florida in 2004 suggests
that a Category 4 hurricane will destroy 60 to 80 percent of the crop.

It is also likely that significant tree damage occurred. The peculiar
nature of citrus production in Jagüey Grande may limit tree destruction.
Most citrus production in this region occurs in rocky soils where
dynamite has been used to create space for trees to be planted. With
root systems well secured in the surrounding rocky soils, the trees are
less prone to being blown over from high wind, although substantial limb
damage likely occurred.

Prior to Hurricane Michelle striking Cuba in 2001, Cuba's citrus
industry had been experiencing resurgence. Cuba's total citrus crop in
the 2000-01 marketing year was estimated at 950,000 metric tons (MT). In
the absence of Hurricane Michelle, Cuba's grapefruit crop in the 2001-02
season would likely have been about 350,000 MT (Spreen, Brown, and
Messina, 2001). With Hurricane Michelle, Cuba's 2001-02 citrus crop was
477,000 MT and the 2002-03 crop was near 800,000 MT. Data are
unavailable on the 2003-04 crop.

With extensive damage to Florida's 2004-05 grapefruit crop from
hurricanes, Cuba has been enjoying record high prices for its
grapefruit. Cuba ranks third in world grapefruit production, following
the United States and Israel. Nearly all of Cuba's grapefruit production
is processed into juice. Although exact production figures are
unavailable, it is likely that Cuba is the second largest grapefruit
juice producing country in the world, following the United States. With
the likelihood that grapefruit production in Florida will realize some
"hangover" effect from the hurricanes of 2004, extensive damage to
Cuba's grapefruit crop will add to the likelihood of high prices for
grapefruit juice in the world market.

The extent of the damage to Cuba's largest citrus juice processing
facility, which is located in Jagüey Grande (and operated as a joint
venture between the Cuban government and a Panamanian company with
Israeli principals), was not known at the time of publishing this
report. Hurricane force winds undoubtedly struck the facility, given the
path of the storm, which suggests that the processing plant likely
sustained significant damage, as was the case when hurricane Michelle
struck the same area of Cuba in 2001. While it is too early in the
season for the processing plant to have been very active, damages may
constrain processing fruit juices in the near term, although there are
other juice processing plants on the island. Three new processing
facilities have opened in Cuba over the past five years, one each at the
extreme eastern and western end of the island and a third plant located
in central Cuba.

**[Sugar]{.underline}**

Sugarcane crops generally are able to largely withstand heavy winds and
rains associated with hurricanes with minimal damage, although "lodging"
of the cane from heavy winds and rains can create problems at harvest.
Reuters news service (Frank, July 15, 2005) reported damage at a number
of sugar mills but, interestingly, he notes that "damage to the
\[sugar\] industry appeared balanced by much needed moisture across most
of the country." However, sugar is a far less important crop for Cuba
now than it was in the late 1980s. The harvest for the 2004-05 season is
reported to be around 1.3 million metric tons, which is only about 15
percent of the production levels of the late 1980s and the lowest
production volume for Cuba in nearly 100 years.

**[Other Crops]{.underline}**

Coffee plantations in the mountains in eastern and central Cuba
reportedly were hit hard, with much damage from winds and flooding
(Frank, July 15, 2005). Mango and papaya crops also suffered
considerable damage, along with grain, and cabbage crops and irrigation
systems (UN-OCHA, July 13, 2005). One report indicated that 30,000 acres
of bananas were destroyed by the storm (Bauzá and Baro Diaz, July 13,
2005). 127,000 tons of vegetables also were lost, along with large
volumes of other fruits and tubers (Prensa Latina, July 12, 2005a).

Reports indicate that 27 greenhouse structures for the propagation of
vegetables for domestic consumption were damaged or destroyed by the
storm (Prensa Latina, July 12, 2005a). However, in Matanzas Province, it
is reported that 40 lightweight vegetable propagation structures erected
by *German Agro Action* (one of Germany's largest private organizations
working in the area of development cooperation and humanitarian aid)
were dismantled and stored in advance of the hurricane and have since
been rebuilt and are once again in production (Deutsche
Welthungerhilfe).

**[Livestock]{.underline}**

Nearly half a million animals and livestock were reportedly moved into
protective shelters prior to the storm (AIN, July 10, 2005). Despite
these preparations, Cuba's official newspaper Granma reported that
73,000 head of poultry were destroyed by the storm (Oramas, July 12,
2005). As has been the case in prior hurricanes, damage to barns, dairy
milking parlors, and other structures undoubtedly was significant,
particularly in the areas over which the eye of the storm passed.

**[Food Supplies]{.underline}**

Feeding the Cuban people continues to be a difficult challenge for the
government and this storm certainly will not help that situation as
Hurricane Dennis also was reported to have ruined approximately 3,000
tons of stored food (Prensa Latina, July 12, 2005a).

The United Nations Office for the Coordination of Humanitarian Affairs
reports that:

> "Damages to agriculture and the food industry have been very heavy in
> all the affected 12 provinces of Cuba, mainly fruit, vegetables, and
> edible roots. Urban agriculture, a very significant agricultural
> production system supplying populated areas, has sustained heavy
> damages. Cienfuegos and Granma provinces are reporting the loss of
> 27,000 hectares of the most diverse agricultural crops, a figure very
> close to the total planted areas. The storm also destroyed
> agricultural storage facilities, structures for farm animals, egg
> farms, and other agribusiness installations. It must be noted that
> these are very partial figures. As reports come in from other
> provinces, the whole picture will be more evident, showing devastating
> losses in agriculture, including animal husbandry, and food production
> and processing units" (UN-OCHA, July 13, 2005, page 2).

Separately, it was reported that Fidel Castro stated that \$400 million
in additional investment will be provided for foodstuffs to help feed
the population (Oramas, July 12, 2005) and that 220,000 tons of food for
those affected by the hurricane were to be distributed (Prensa Latina,
July 12, 2005b).

**[OTHER ECONOMIC SECTORS]{.underline}:**

While Cuba's infrastructure suffered significant damage from the storm,
other important commercial and industry sectors of Cuba's economy beyond
agriculture are reported to have sustained only limited damage. Other
than having to cease operations during the hurricane, Reuters news
service reported that Cuba's nickel and oil industries were largely
spared from damage (Frank, July 11, 2005).

The tourist industry is particularly important to the Cuban economy at
this time because it is Cuba's primary source of hard-currency,
foreign-exchange earnings. A quick review of the damage to Cuba's
tourist sector from Hurricane Dennis is therefore in order as it may
have important implications for Cuba's future economic prospects, and
perhaps for purchases of food and agricultural products from the United
States, which must be made in cash. Frank (July 15, 2005) writes that
the Cuban government may be forced to almost double food imports as a
result of damage caused by the storm.

High winds, heavy rains, and coastal flooding from Hurricane Dennis
reportedly caused significant damage to a number of tourist facilities
along the southern coast and coastal islands of Cuba. However, the
majority of Cuba's tourism is located along the northern coast and in
the city of Havana. Cuba's official newspaper Granma reported that 21
hotels were damaged by the hurricane, although it did not provide any
details on the location of these hotels or the extent of the damage
(Oramas, July 12, 2005). Given the path of the storm, Cuba's tourist
beach resort area at Varadero almost certainly faced hurricane force or
near hurricane force winds and heavy rains. However, it has been
reported that this area and other tourist areas further east along the
north coast of the island were spared the heaviest impacts of the storm
and experienced limited damage, so the effects on Cuba's tourist sector
do not appear to be particularly significant (Frank, July 11, 2005).

The United States and the European Union both offered economic aid to
Cuba, but Cuban President Fidel Castro did not accept this aid,
accepting instead aid and assistance from Venezuela (AIN, July 12,
2005).

The United Nations World Food Program (UN/WFP) recently announced an
Immediate Response Account Emergency Operation to assist particularly
vulnerable groups in Cuba (specifically pregnant and nursing women,
children under five years of age and the elderly) affected by Hurricane
Dennis. This operation will assist about 111,000 people with the
delivery of food supplies, and the total cost of this program is
estimated to be about \$490,000. The UN/WFP also announced a three-month
Emergency Operation for Cuba to provide assistance to an additional
773,000 members of these same vulnerable groups who have been affected
by the drought through the provision of supplemental food rations of
rice, beans and vegetable oil at a cost of over \$3.7 million (World
Food Programme).

While Hurricane Emily also paralleled the south coast of Cuba only about
10 days after Hurricane Dennis, it was a compact storm and passed far
enough south of the island that Cuba did not experience any significant
winds from this storm. However, Cuba did experience some rain from
Hurricane Emily that was locally heavy in some areas, particularly in
the southwestern portions of the island and on the Isle of Youth where
some coastal flooding is reported to have occurred (Prensa Latina, July
18, 2005).

**[REFERENCES]{.underline}:**

AIN. July 10, 2005. Cuba Begins Recovery as Gulf States Await Dennis.
*Agencia de Información Nacional*. Division of the Cuban National News
Agency, Havana, Cuba. www.ain.cubaweb.cu.

AIN. July 12, 2005. Venezuelan Experts Dispatched to Cuba and Jamaica.
*Agencia de Información Nacional*. Division of the Cuban National News
Agency, Havana, Cuba. www.ain.cubaweb.cu.

Bauzá, Vanessa. July 9, 2005. 10 Dead as Dennis Pummels Cuba. *Ft.
Lauderdale Sun Sentinel*, Fort Lauderdale, FL. www.sun-sentinel.com.

Bauzá, Vanessa, and Madeline Baro Diaz. July 13, 2005. Cuba Tallies up
Dennis' toll: 16 Dead and \$1.4 Billion in Damage. *Ft. Lauderdale Sun
Sentinel*, Fort Lauderdale, FL. www.sun-sentinel.com.

Boadle, Anthony. July 9, 2005. Update 1--Hurricane Dennis Hits Havana,
32 Dead in Caribbean. Reuters News Service Online.
http://today.reuters.com/news/.

Deutsche Welthungerhilfe. 2005. "Aid for hurricane victims on (sic)
Cuba." German Agro Action. Bonn, Germany.
<http://www.welthungerhilfe.de/WHHEN/projects/03latinamerica/Aid_for_hurricane_victims_on_Cuba_.html>.

Frank, Marc. July 11, 2005. Cuba Counts up Damage in Wake of Hurricane
Dennis. Reuters News Service Online. http://today.reuters.com/news/.

Frank, Marc. July 15, 2005. Cuba's Crumbling Infrastructure Taxes
Resident's Patience. Financial Times Online. http://news.ft.com/home.us.

*Havana Journal*. July 11, 2005. Hurricane Damage Statistics in Cuba.
<http://havanajournal.com/politics_comments/3575_0_5_0_C/>.

*Havana Journal*. July 10, 2005. Update after Hurricane Dennis Hits
Cuba. <http://havanajournal.com/politics_comments/3570_0_3_0_C/>.

*Mail & Guardian Online*. 12 July, 2005. Hurricane Death Toll Mounts as
Cuba Refuses Aid. http://www.mg.co.za.

Muraro, Ronald P., Thomas H. Spreen, and Armando Nova Gonzalez. 1998.
Cuban Citrus Indsutry's Transition into the International Free Market
Arena. *Proceedings of the Florida State Horticultural Society* 111:
169-73.

Oramas, Joaquin. July 12, 2005. Damage from Dennis at \$1.4 Billion.
*Granma Digital Internacional*, Havana, Cuba. www.granma.cu.

*Prensa Latina*. July 18, 2005. Emily Lashes Yucatan Peninsula. Latin
American News Agency, Havana, Cuba. www.plenglish.com.

*Prensa Latina*. July 12, 2005a. Cuba Suffers \$1.4 Billion in Hurricane
Losses. Latin American News Agency, Havana, Cuba. www.plenglish.com.

*Prensa Latina*. July 12, 2005b. Fidel Castro Tallies Hurricane Damage,
Sixteen Dead. Latin American News Agency, Havana, Cuba.
www.plenglish.com.

*Reuters*. July 11, 2005. Hurricane Dennis Killed 16 in Cuba. Reuters
News Service Online. http://today.reuters.com/news/.

Spreen, Thomas H., Mark G. Brown, and William A. Messina, Jr. 2001. The
Potential Impact of Hurricane Michelle on the Cuban Citrus Industry.
Electronic Data Information Source (EDIS) FE328. Department of Food and
Resource Economics, University of Florida, Gainesville, FL.
<http://edis.ifas.ufl.edu/FE328>.

UN-OCHA. 13 July, 2005. Caribbean: Hurricane Dennis OCHA Situation
Report No. 7. United Nations Office for the Coordination of Humanitarian
Affairs, Rome, Italy.
<http://www.reliefweb.int/rw/dbc.nsf/doc100?OpenForm>.

U.S. National Hurricane Center. July 8, 2005. Update on Hurricane
Dennis. NOAA, Miami, FL. http://www.nhc.noaa.gov/.

World Food Programme. 12 August 2005. "World Food Programme Emergency
Report 2005." United Nations World Food Programme Report No. 33/2005.
<http://www.reliefweb.int/library/documents/2005/wfp-emergency-12aug.pdf>.

[^1]: ^\*^ William A. Messina, Jr. is coordinator of economic analysis
    and Thomas H. Spreen is professor and chair, both in the Food and
    Resource Economics Department, Institute of Food and Agricultural
    Sciences, the University of Florida, Gainesville, Florida, USA.

[^2]: For details on the Saffir-Simpson Hurricane Scale go to the U.S.
    National Hurricane Center website at
    [http://www.nhc.noaa.gov/aboutsshs.shtml](../www.nhc.noaa.gov/aboutsshs.shtml).

[^3]: 13 deaths were reported in Granma province and two in Santiago de
    Cuba, both in eastern Cuba, and one death was reported in Sancti
    Spiritus province in central Cuba.

[^4]: A Reuters news service article (July 12, 2005a) reported that 10
    major hurricanes hit Cuba between 1985 and 2004 but they caused only
    22 deaths in total.