US Farm Exports to Cuba Set to Grow

US Farm Exports to Cuba Set to Grow
April 22, 2015 4:09 PM

WASHINGTON—
Agriculture experts say U.S. farm exports to Cuba could more than triple
in the next five years - reaching $1 billion - and support thousands of
new U.S. jobs.

Farmers and government officials told the U.S. Senate Finance Committee
recently, however, that both Washington and Havana must remove more
legal, logistical, and financial obstacles to reach this goal.

President Barack Obama recently eased restrictions on trade and travel
to Cuba and allowed Cuban-Americans to send larger amounts of money to
their families on the communist-ruled island. But Obama can't end the
decades-old trade embargo against Cuba without congressional approval.

Major resistance

There is strong opposition to ending the embargo or taking other steps
to ease restrictions from some Cuban-American members of Congress who
call such steps "appeasement" of dictators and a threat to U.S. security.

They argue that expanded trade would support a hostile authoritarian
government far more than it helps Cuban consumers.

An expert on relations between Cuba and the United States, New York
University's Arturo Lopez-Levy, disagrees with these critics, but he
said it may take several years to fully normalize relations between the
former Cold War adversaries.

Cuba could be a much larger business opportunity for U.S. farm products
because the island imports about 80 percent of the food consumed by its
11 million people, according to Michael Scuse of the U.S. Agriculture
Department.

Scuse and other witnesses said Cuba buys food from distant lands like
Vietnam, New Zealand, the European Union, Canada, Brazil, and Argentina.
That rice, wheat, corn, milk, and fruit is available from the United
States with lower shipping costs, giving Cuban consumers a price break,
and leaving more room for farmers to profit.

Enabling smaller companies

U.S. farmers have been selling food to Cuba for a few years, after an
earlier partial easing of the trade embargo, but they complain they are
losing business to other nations because current U.S. law blocks the
kind of marketing and financing their rivals use to sell more goods.

Minnesota cattle rancher Ralph Kaehler said large companies may have the
resources to prosper without help from the U.S. Agriculture Department,
but small companies like his do not.

Farmer Doug Keesling, whose family has been raising wheat in Kansas for
five generations, said the current U.S. "rules and laws" complicate
financing and make it "too expensive" to compete for business in Cuba.

These farmers and other experts also complain the Cuban government
requires U.S. goods to go through its "Alimport" organization,
needlessly complicating and slowing down such transactions.

Some business, though, is already underway. Officials at the U.S. port
of New Orleans say they ship 25,000 tons of frozen chicken from American
producers to Cuba each year, and are "optimistic" the trade will grow in
volume and variety.

Making progress

Matt Gresham said New Orleans was one of the island's largest trading
partners prior to the embargo, and could eventually regain that status.

He said the Cuban people will likely need farm products, machinery and
many other goods, but he expects it will take a while for the island's
economy to expand enough to create additional buying power.

That growth may be helped by Obama's policy changes that loosen
restrictions on financial transactions with Cuba, and raise the limit on
remittances.

Harvard University's Manuel Orozco writes these changes will allow more
Cuban businesses to offer electronic transactions, boost competition for
financial services, and increase disposable income for many Cubans.
Taken together, these changes will boost purchasing power, savings and
investment. That will help expand the island's small private sector.

New York's Andrew Cuomo is not waiting for political, legal, or economic
progress. He's leading a trade delegation to Cuba this week. That makes
him the first governor of a U.S. state to head such a mission since
Obama eased restrictions.

Cuomo said he would like to sell New York's apples to Cuba, and New York
businesses have just made deals for a cancer research project with Cuban
colleagues, and for computer software sales on the island.

Source: US Farm Exports to Cuba Set to Grow -
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