On Sept. 10, the Cuban government adopted new regulations that dramatically liberalize the Unidades Básicas de Producción Cooperativa (UBPCs) and Cuban agriculture in general.

The story of the UBPCs over the last 20 years is a clear example of the state betraying its own laws. Under Law Decree #142, passed in 1993, the UBPCs were to be real, effective cooperatives — putting an end to state farms that had controlled 70% of Cuba’s farmland.

What happened instead?

Right after this 1993 law was enacted, the UBPCs were put back under state control, followed by incidents of mismanagement and abuse as well as bureaucratic distortions and economic and political blunders.

UBPCs members started to realize that the autonomy granted by the law was a mere fiction. Even the supposedly elected bodies to run the UBPCs were appointed by the state. All of this violated the 1993 law, but no one spoke about it. Now, for the first time, you can “read all about it” in the Cuban press.”

At the time that law was passed nearly two decades ago, there were 2,519 UBPCs — almost all of them belonging to the Ministry of Agriculture (MINAG) and the former Ministry of the Sugar Industry (MINAZ).

Today there are 1,989 UBPCs, mostly under the control of MINAG. They own in usufruct 1,770,000 hectares, representing 28% of best farmland — but currently 23% of this land remains idle. Some 21% of these UBPCs reported net losses in 2010.

Meanwhile, to cover up their mismanegement, the state graciously continued to extend credits year after year worth 3.3 billion pesos, an enormous debt that could not be repaid. Additionally, by 2010, the UBPCs belonging to MINAG had racked up 2.1 billion pesos in net losses.

At last count, only 540 UBPCs (428 associated with MINAG and 112 with MINAZ) have met minimum standards of efficiency and solvency. A second group consisting of 1,122 UBPCs (57% of the total) are in critical shape, but still capable of recovery.

The final group, made up of some 300 UBPCs, will either merge with more successful ones or be completely dissolved. This is the legacy of continued state mismanagement and violation of its own laws.

The new law enacted Sep. 10 fully restores the 1993 decree and mandates that:

* The UBPCs will fully manage their own affairs and make their own decisions.

* They will allocate only 5% of their income to refinance debts, defaults and whatever loans they may get from the state budget starting in 2013..

* Payments of their bank credits will be re-scheduled over 25 years. Loans and credits will be given to well-performing UBPCs.

* For the next five years, UBPCs will pay no taxes, and pending debts over the last 20 years will be forgiven for those UBPCs in the first two groups.

* UBPCs will decide for themselves how to distribute their proceeds. If they are facing arrears, the distribution of proceeds will be limited to 50%.

* State institutions will interact with UBPCs only by way of supervising the implementation of technical norms related to cultivation, and by way of sales contracts based on free prices. Everything else not included in the government contracts may be sold at whatever price the UBPC wishes.

These new regulations will eventually be extended to other farmers cooperatives, such as Cooperativas de Producción Agropecuaria (CPAs) and Cooperativas de Crédito y Servicio (CSSs), that have been in place rather successfully for more than 40 years.