By Anthony Boadle

PLACETAS, Cuba (Reuters) - The sweet smell of molasses has gone and the shrill steam whistle that
called the shift changes is silent. All that remains are dead streets, nostalgia and resignation.

"The smell of sugar was so good, and there was constant activity 24 hours a day," said Liliam Noriega,
who worked most of her life at the Benito Juarez sugar mill outside Placetas in central Cuba.

 "How could we not miss that? It was all we had," she said.

 Six months after Cuba's communist government bit the bullet and closed 71 of the island's 156 sugar mills
 because they were no longer able to compete in today's world market, Cuban sugar workers are still
 trying to adapt to new lives growing vegetables, raising buffaloes or going back at school.

 Half the smoke stacks that dot the Cuban countryside are no longer fired up at harvest time, and sugar
 cane fields are being plowed up for other crops, forestry and cattle grazing.

 The "bateys" or villages clustered around the mills, the center of life for generations of Cuban sugar
 workers, look like ghost towns now.

 "People don't realize this change is for the good," said Pablo Gutierrez, personnel manager for 37 years
 at Benito Juarez who is now teaching math to the mill's laid-off workers.

 "Sugar has no future because technological advances developed substitutes. When people see the
 results -- more tomatoes, beans, buffaloes -- they will have forgotten about sugar cane," he said.

 The full impact on rural communities of the downsizing of Cuba's largest industry, which employed
 420,000 workers, has still to be seen. A quarter of them were left jobless overnight.

 President Fidel Castro's government promised to turn 40,000 into farmers, while another 60,000 are
 studying and continue to receive their average pay.

 ONCE WORLD'S LARGEST PRODUCER

 Sugar was the backbone of the Cuban economy for three centuries since colonial times when Spaniards
 introduced sugar cane and worked the plantations with slaves from Africa.

 After a bloody uprising in Haiti against French colonists in 1791, Cuba became the world's largest sugar
 producer through the beginning of the 20th century. Most of the output was sold to the United States and
 many mills were owned by American companies like Hershey, the Pennsylvania chocolate maker.

 The mills and plantations were nationalized after the leftist revolution led by Castro and his guerrillas in
 1959.

 When Washington broke off diplomatic relations with Havana and imposed trade sanctions in the
 aftermath of Castro's revolution, the Cuban leader turned to the Soviet Union for new markets and got a
 sweet deal.

 Soviet bloc countries paid Cuba up to five and six times the going world price for sugar and sold the
 island subsidized fertilizers and cheap oil, said dissident economist Oscar Espinosa Chepe, a former
 sugar ministry official.

 "It was a tremendous deal for Cuba. The government thought it would last for ever and did not diversify,"
 he said.

 Castro's government dedicated additional vast tracts of land to sugar cane and resorted to the
 enthusiasm of volunteers to pull in record harvests. Even leaders such as revolutionary icon Ernesto Che
 Guevara showed up to cut cane in the fields.

 Despite the effort, Cuba failed to reach the production goal set by Castro of 10 million tonnes of sugar in
 1970, peaking at 8.5 million tonnes and falling off after 1989.

 When Soviet communism collapsed, Cuba lost its guaranteed market and massive subsidies and was left
 with antiquated machinery, exhausted lands and an inefficient industry.

 By 1998, according to U.N. Food and Agriculture Organization data, the productivity of Cuban cane fields
 was half the world average. With more than 100 countries producing sugar, the price had sunk with
 declining demand due to substitutes like fructose from corn syrup and artificial sweeteners. Add to that
 higher oil prices and a restructuring was inevitable.

 Output fell to 4 million tonnes in 2000, the same level as 1919. The government hopes to maintain
 production at that level by keeping the most efficient mills working.

 But this year's harvest looks like it will barely reach 2.7 million tonnes due to organizational problems,
 shortages of lubricants and supplies and an insufficient supply of cane, experts said.

 Cuba has fallen to eighth place in the world as raw sugar producer, behind Brazil, India, China, the United
 States, Thailand, Mexico and Australia.

 TOURISM ECLIPSES SUGAR

 Last year sugar exports amounted to $440 million, four times less than earned from tourism, an industry
 that was spurned as decadent at the start of Castro's revolution but which has become the mainstay of
 the Cuban economy today.

 The tourist trade outstripped the sugar industry a decade ago as the Caribbean island's top dollar-earner.

 One of the closed mills has been turned into a museum where old steam-powered trains bring tourists
 from nearby beach resorts for a glimpse into Cuba's past.

 Experts doubt the government can fulfill its pledge to find new jobs for 100,000 people in a stagnant
 economy that has been on the skids since the collapse of the Soviet Union.

 Dissidents such as Espinosa Chepe believe the only solution is to open up to private initiative, small
 businesses and land holdings. But they see the government going the opposite way, suffocating the little
 private enterprise that is allowed.

 No economy can afford to send laid-off workers back to school on full pay, said Luis Ramon Hernandez,
 a former sugar workers union leader who was expelled for criticizing government policy.

 "If they were young men, that would work. But these are older people. What are they going to do
 afterwards, if there is no work," he said.

 At the Hermanos Almeijeiras mill outside Placetas, where all of the three local mills were shut down,
 workers are resigned to planting vegetables.

 In the railway yard that once bustled with steam locomotives shunting cars loaded with sugar cane from
 the fields to the mill, there is now a neatly planted garden with rows of lettuces, cabbages, carrots,
 beets, radishes, tomatoes and garlic.

 "We feel awful, because the mill was like our home, but that's life. It was pointless to continue producing.
 Now I'm studying again at 60," said Ramon Castillon, a former grinding machine operator who began
 working at the mill when he was 15.

 Workers said the government had done its best to help them survive the closures.

 But Fermin Ramirez, selling homemade sweets for one peso a packet after 21 years stocking the mill's
 boilers, complained his 281 peso ($11) monthly wage was not enough to make ends meet.

 "It's not enough to feed a sparrow on. But what are you going to do. There is nothing else to do around
 here."