of the agreement, “regulate the world sugar market and reach an equilibrium between supply and demand that would allow the price to be maintained between the limits of 3.25 and 4.35 cents per pound.”32 The Cuban quota was designed to allow a zafra of 5 million tons. In the event of the price falling below 3.25 cents, quotas would be progressively cut by a maximum of 20 percent, and when that occurred no further action was envisaged. The final agreement was signed in August by only thirty-eight of the forty-four participating countries, while the rest of the sugar-producing world, particularly Peru, Indonesia, Brazil, Formosa, and East Germany (an important sugar beet producer), was not bound by the treaty.33 Not signing the agreement and increasing production was only an option for smaller producers whose economies were not so dependent on sugar. This may have been short sighted, but it represented an opportunity for growers in these smaller producing countries to gain an income they had not previously enjoyed. If Cuba were to have tried this approach, such was its importance in the world market that its withdrawal would have destroyed the agreement.
The partial nature of the International Sugar Agreement was to be its undoing, because those countries that did not sign the agreement could increase their production as much as they wished, while importing countries who were signatories were not obliged to buy exclusively from other member states. Furthermore, the agreement only restricted production in exporting countries and did not restrict internal production in participating importing countries, a particularly important loophole for European sugar beet producers. There were also two other important sugar regulation arrangements, the Commonwealth Preference and the United States’ sugar quota schemes. The latter accounted for about half the Cuban production and would have an important effect on the situation as U.S. growers, eager to increase their own share of the domestic market, succeeded in their campaign to reduce the amount of sugar purchased from Cuba. This exacerbated the problem caused by the reduction in income from the rest of the world market. The Commonwealth scheme, designed to develop sugar production in the British Empire and guaranteeing an annual 2.5 million tons to Britain’s colonies and ex-colonies, was an additional complication because it further reduced the potential market for Cuba.34 Thus Cuba faced an unfortunate conjuncture, as falling prices due to overproduction coincided with a reduction in the American and British markets, where preference was given to internal U.S. and British Empire production. Meanwhile, some smaller producing countries took short-term advantage of the London Sugar Agreement’s attempt to reduce the amount of sugar on the market and undermined the agreement by increasing their own production.
These defects were obvious from the beginning as the price dropped to 3.14 cents in November 1953, thus triggering a 15 percent drop in quotas as soon as the agreement came into force. The price continued to fall, and in May 1954 another 5 percent cut in quotas was decreed by the International Sugar Council, which had been set up under the agreement to manage the quota system. This intervention had little effect; in June, the price fell to 3.05 cents. The maximum cut in quota now having been reached, the agreement was powerless to act further, although the council did suggest a further voluntary cut.35
The failure of the London Sugar Agreement to achieve its objective of stabilizing the world market sugar price between 3.25 cents and 4.35 cents per pound was to have serious political repercussions in Cuba, where opponents of the regime, like the economist Oscar Pino Santos who wrote for the journal Carteles, criticized the agreement as an unpatriotic betrayal of Cuban national interests, which he predicted was doomed to failure in any case.36 It is difficult to see how anything the government might have done would have stopped the fall in the price of sugar, but the fact that they tried and failed left them open to criticism. The critics’ recommended approach, which amounted to little more than aggressively trying to sell more sugar on an unregulated market, risked a further catastrophic fall in the world price that could have bankrupted the country. Nevertheless, the fact that the weight of the measures adopted fell most heavily on the workers was to produce a strong reaction within the trade unions, a reaction exacerbated by changes in U.S. sugar-purchasing policy.
The United States had never been part of the international sugar market, having sufficient supplies from its own internal sources and client states such as Cuba and the Philippines. During the first decades of the twentieth century, Cuba supplied almost the entire U.S. market and then sold any excess on the world market, but the Jones-Costigan Act, passed by the U.S. Congress in May 1934, imposed a system of quotas that were not mutually negotiated but decided unilaterally by the U.S. secretary of agriculture.37 This reduced the Cuban share of the U.S. market from 50 percent to 30 percent, and by the early 1950s the United States was buying only about half of the Cuban sugar crop. The U.S. quota system was further complicated by the fact that besides its commercial function it had a political dimension.38 So, in May 1955, following an aggressive campaign led by Senator Allan Elender, the U.S. Senate passed a new “Sugar Law” that reduced Cuba’s previously held right to 96 percent of any increase in U.S. consumption to 29.5 percent. This, according to Oscar Pino-Santos writing at the time, cost Cuba nearly 100,000 tons.39 This additional threat to Cuban sugar production, which occurred despite a visit to Washington by a united delegation of Cuban employers and workers’ leaders of all factions, served to increase anti-imperialist feeling among sugar workers.40
These feelings reinforced working-class nationalist politics and gave added credence to ideas of economic nationalism as a solution to poverty and insecurity. This in turn further undermined the credibility of the London Sugar Agreement, which was popularly seen as being a surrender to foreign interests.41 It has been common since the 1960s to assume that opposition to foreign ownership was directed entirely against the United States. However, it should be remembered that European capital held a significant minority stake in the Cuban economy, and this was just as bitterly resented when it appeared to threaten the perceived Cuban national interest.
As the failure of the London Sugar Agreement to prevent the continuing decline in sugar prices was becoming increasingly obvious, the Cuban government’s inability to think of an alternative strategy further reduced its standing. Peru and Indonesia had refused to join; Brazil and Formosa were unsatisfied with their quota and left; and many importers were never included. Moreover, the British Commonwealth received privileges that, given that London was the home of the agreement, served to further weaken the agreement’s credibility. By early 1955, the price of sugar was 3.15 cents a pound, 10 points lower than the agreed minimum. Cuba appeared to be taking the majority of the restriction with a 30 percent reduction compared to the production levels of 1952, although the impact of that would be much worse if the U.S. quota were to be cut further, as now seemed likely. The London Sugar Agreement appears from these figures to be working against Cuba’s interests, but remaining a party to the agreement maintained a level of profitability for the employers, even if this was at the expense of working-class employment and living standards. But living standards for agricultural workers were already appalling.42 The figures contained in the 1957 report by a Cuban Jesuit association, the Agrupación Católica Universitaria, are graphic: 64 percent of rural dwellers with no proper sanitation, 43 percent illiterate, 91 percent undernourished—to give but a few examples.43 Cuba’s sugar workers therefore had little to lose by resisting, and though hardship does not necessarily generate militancy, when combined with a sense of injustice there is potential for industrial action.
These problems had already been foreseen by the International Bank for Reconstruction and Development (World Bank) in 1951 when, following the request of the Cuban government for a loan, an American economist, Francis Truslow, was commissioned to produce a report on the state of the Cuban economy.
Productivity and Politics
The Truslow Report started from the position that international competition gave rise to the need to reduce sugar production costs and the recognition that mechanization must inevitably displace some labor. The problem was summed up as:
• employees strongly resist mechanization and cost-cutting methods;
• the discharge of employees for
