Over the past decade or so, Cuba has allowed people with small plots of land in or near the large urban areas to raise produce and sell it in markets or to their neighbours. The result has been a resounding success [h/t to Brian Ferguson]:
Cuba's urban farming program has been a stunning, and surprising, success. The farms... now supply much of Cuba's vegetables. They also provide 350,000 jobs nationwide with relatively high pay and have transformed eating habits in a nation accustomed to a less-than-ideal diet of rice and beans and canned goods from Eastern Europe.
From 1989-93, Cubans went from eating an average of 3,004 calories a day to only 2,323, according to the U.N. Food and Agriculture Organization, as shelves emptied of the Soviet goods that made up two-thirds of Cuba's food. Today, they eat 3,547 calories a day - more than what the U.S. government recommends for American citizens.
"It's a really interesting model looking at what's possible in a nation that's 80 per cent urban," said Catherine Murphy, a California sociologist who spent a decade studying farms in Havana. "It shows that cities can produce huge amounts of their own food, and you get all kinds of social and ecological benefits."
As it is, productivity is low at Cuba's large, state-run farms where workers lack incentives. Government-supplied rations - mostly imported from the U.S. - provide such staples as rice, beans and cooking oil, but not fresh produce. Importers bring in only what central planners want, so the market doesn't correct for gaps. And since most land is owned by the state, developers are not competing for the vacant lots that can become plots for vegetables.
Unfortunately, the overall tone of the article is that somehow urban farming is something other central planners should emulate. The article misses the major point: when property rights are well-defined and transaction costs are low, people can respond to incentives and resources will tend to move toward their most highly valued uses.
If only people studying economic development could understand this basic result...