Open trade with Cuba would create huge opportunities for producers in his state, predicts ag economist William Messina. But many commodities already have a booming market in Cuba.
“Whenever trade opens with Cuba, that’s going to have a greater impact on Florida agriculture than anything else that has happened,” said Messina, who has followed Cuban-U.S. trade for more than a decade and visited the island nation a dozen times.
The U.S. already exports a hefty amount of food to Cuba – $300 million in agricultural products last year. Cuba is the No. 1 customer for U.S. poultry, and even buys lower value cuts that are less popular with U.S. consumers. In 2008, the country was the top importer of U.S.-grown rice.
Since agricultural trade restrictions were loosened in 2000, the U.S. has become an important food supplier for Cuba, according to Messina. In 12 of the last 13 years, Cubans bought more food produced in the U.S. than from any other country.
But those deals are cash-only, and as trading partners in other parts of the world have started to offer credit and longer terms, Cuba is changing what it buys from the U.S. Over the past few years, Cuba has bought more rice from Asia and grain from South America, replacing some of the U.S. suppliers the country relied on.
“For the strapped Cuban government, the offer of longer terms is very attractive,” said Messina.
Some U.S. ag interests want to reverse that trend.
Last week, three dozen powerful organizations announced they were joining together to form the United States Agriculture Coalition for Cuba to lobby Congress to lift the embargo.
While President Obama announced in mid-December that the country would normalize trade with Cuba and ease banking restrictions, the embargo is federal law and can’t be scrapped without Congressional approval.
It’s difficult to tell how difficult it would be for USACC to convince a Republican-controlled Congress to overturn the embargo.
Lawmakers in the House and Senate have voted 11 times over the past 20 years to keep the trade ban in place, according to the Cato Institute. And the most vociferous supporters of continuing the policy of isolating Cuba are Republicans; in the House in 2005, for example, 91 percent of Republicans voted in favor of keeping a ban on travel to the island nation.
But attitudes may be changing. Polls in the wake of Obama’s announcement showed that young Cuban Americans are much more supportive of lifting the embargo than their parents and grandparents are.
While Cuba is already a big market for U.S. ag products, there’s a lot of room for growth.
“Cuba imports between 60 and 80 percent of its food,” Messina said. “The country probably could purchase $1 billion a year … easily.”
And, while Cuba can import food and fertilizer from the U.S., pesticide and equipment aren’t exempted from the embargo.
While new groups are signing on to the USACC each day, the original coalition membership includes:
American Farm Bureau Federation
American Soybean Association
Cargill
Chicago Foods International
CoBank
Corn Refiners Association
Illinois Cuba Working Group
Illinois Soybean Growers
Illinois Farm Bureau
International Dairy Foods Association
National Association of State Departments of Agriculture
National Association of Wheat Growers
National Milk Producers Federation
National Barley Growers Association
National Chicken Council
National Council of Farmer Cooperatives
National Farmers Union
National Grain and Feed Association
National Oilseed Processors Association
National Turkey Federation
North American Export Grain Association
North American Meat Institute
Soyfoods Association of North America
United Soybean Export Council
US Canola Association
US Dry Bean Council
US Wheat Associates
USA Rice Federation
US Dairy Export Council
By Allison Floyd, Growing Georgia
January 14, 2014
