July 18 (Bloomberg) -- Cuban President Raul Castro will redistribute government land that is not in use to private farmers to stimulate the country's agricultural industry.

Castro will hand over a ``considerable percentage'' of idle land to farmers to increase food production and reduce imports, according to a decree posted on the Web site of Cuba's official newspaper Granma today.

The decree is the latest in a series of moves made by Castro since he succeeded his brother, Fidel Castro, as president in February. Since then, he has lifted a ban on mobile phones, allowed locals to stay in hotels and earn wages based on merit, and permitted private taxi drivers to apply for licenses.

``This is the first substantial reform to Cuba's economic model carried out by Raul,'' said Jorge Pinon, a researcher at the Institute for Cuban and Cuban-American studies at the University of Miami. ``Everything else was purely cosmetic, geared to the general population so they could have a better standard of living. This is the first real structural change.''

The Cuban government will grant land rights for as much as 10 years for private individuals, renewable for a further 10 years, and as much as 25 years for companies and cooperatives, renewable for 25 years.

Farmers who don't already own land can get as much as 13.4 hectares (33.2 acres), while those who already own land can increase it to 40.3 hectares.

``This is a good thing,'' Pinon said. ``It will help Cuba increase agricultural output, but it could mean a huge boost to the national economy because we estimate the lost revenue in both sugar and ethanol by Cuba is in excess of $2.5 billion.''

Cuba's sugar production has fallen 75 percent to 100,000 metric tons per year since December 2000, according to figures from the United States Department of Agriculture.

``It seems promising, but we'll have to see how aggressive they want to be,'' Pinon said. ``The devil is in the detail. We still have to see the exact legislation with all of its `T's crossed and `I's dotted.''

To contact the reporter on this story: Laura Price in Sao Paulo at lprice3@bloomberg.net

Last Updated: July 18, 2008 15:54 EDT