Farm Bureau supports normalizing access to trade and travel with Cuba. Opening this nearby market will boost business for U.S. farmers and ranchers, thanks to lower transportation costs to reach Cuban ports. Although there is increased business activity between the U.S. and Cuba, the continuing U.S. embargo limits growth in agricultural exports. Current financing restrictions make it difficult for U.S. farmers and ranchers to compete when our foreign competitors offer generous credit terms. Cuba is one of our nearest markets, but the U.S. ranks as the country’s third-largest supplier.
Restrictions on Ag Trade
The Trade Sanctions Reform Act of 2000 allowed a limited exception to the U.S. embargo on Cuba for food and medicine. Cubans import more than $2 billion in agricultural products annually, with $150 million of those sales coming from the U.S. The main U.S. exports include chicken, pork and animal feeds. Cuba has not purchased any U.S. wheat since 2011, buying instead from Canada and the European Union, and they have not purchased any U.S. rice since 2008, buying instead from Brazil and Vietnam. The added costs to using third party banks and requiring cash only transactions make the U.S. less-competitive in export sales.
In 2015 diplomatic relations between the U.S. and Cuba were restored and several regulations limiting U.S. economic activity with Cuba, including some agricultural financing restrictions on Cuba trade, were removed. However, the embargo can only be repealed by congressional action.
USDA has recently allowed state checkoff funds to be used for research and promotion activities to help develop the Cuban market for U.S. agricultural products. Due to the embargo, federal funds for these activities through the Market Access Program and the Foreign Market Development Program cannot be used.
Efforts to build support to normalize trade relations with Cuba will continue in 2016. Several pieces of legislation have been introduced in both the Senate and House to end the embargo or remove restrictions on financing agricultural trade with Cuba.
Farm Bureau, November 22, 2016