Trump can help farmers by improving two-way trade with Cuba

American farmers voted for President Trump by a 3-to-1 margin, including in places like Iowa, Arkansas, Florida and Ohio, where winning 68% of farmers was a crucial factor in his victory.

However, this important voter bloc — essential to Republican hopes to keep the House in 2018 and the White House in 2020 — is suffering. Nearly every agricultural sector is either losing money or barely profitable. Farmers face extraordinary multi-year revenue losses and the Department of Agriculture predicts farm incomes will continue to fall precipitously.

America’s farmers need new markets to reverse this decline, yet a multibillion-dollar agriculture market just 90 miles away is largely closed to exports.

This nearby market is, of course, Cuba, which imports nearly 80 percent of its food needs, but has been largely off-limits to Americans thanks to outdated laws and regulations. Until recently, Cuba imported more agricultural products from the U.S. than from any other country, but the U.S. share of the Cuban agriculture market today has dropped to less than 16 percent. Cuba now imports more food products from the European Union, Brazil, Argentina and Vietnam than from the U.S.

An improved two-way trade framework could enable American agriculture to leverage its solid advantage in shipping costs and shorter delivery times to regain its lead position in the Cuban market.

One of Trump’s principal campaign promises was to cut laws and regulations that harm U.S. businesses. Regulations restricting U.S. trade with Cuba and blocking farmers’ access to the market were established for understandable reasons during the Cold War, but now agricultural exports to Cuba have declined in part due to self-inflicted prohibitions on export credit for agricultural commodities and equipment.

Other foreign competitors have no such financing impediments. Foreign agricultural suppliers that have moved ahead of U.S. exporters into the Cuban market are providing more generous market access for Cuba’s leading agribusiness exports such as coffee, tropical products, cigars and alcohol. American access, on the other hand, is meager, indirect and largely non-commercial in nature.

If the U.S. government addressed these financing and reciprocity imbalances, our farmers would have substantially better prospects than they currently have of supplying food and agriculture to the more than 11 million Cubans amidst a rapidly growing tourist economy.

Two-way agribusiness benefits both countries and helps fulfill President Trump’s commitment to expand economic activity in rural America. As Rep. James Comer (R-Ky.) recently noted, Cuba’s capabilities are not in direct competition with American farmers, highlighting tropical products like coffee, rum and cigars.

“The products that they could grow and send our way are crops we can’t grow here, so it’s a win-win,” he said.

No U.S. jobs or supply chains would be at risk by improved trade in this sector. On the contrary, for American farmers, every $73,600 in agricultural exports to Cuba would yield another $170,000 in added U.S. economic activity, with commensurate increases in farm-sector jobs. A rollback of the recently established rules and regulations affecting agribusiness trade will only induce Cuba to solidify long-term commercial relationships with other third-country suppliers, potentially shutting American exporters out of the Cuban agricultural market for decades to come.

American agriculture supports 21 million jobs across all 50 states, and exports are a great source of jobs. Secretary of Agriculture Sonny Perdue recognizes the importance of trade with Cuba as a source of growth.

“If our folks grow it, I want to be able to sell it,” he said during a May congressional hearing. “They eat in Cuba as well.”

The agricultural industry recognizes the importance of Cuban trade. Over 100 U.S. agricultural entities recently urged the administration not to reverse any regulations and policies that are directly or indirectly promoting trade with Cuba. These measures include rules and policies to facilitate U.S. transactions in the agribusiness sector, bolster Cuba’s sources of hard currency to help pay for its food imports and extend personal exemptions to Cuban goods in accompanying baggage for personal consumption.

During his campaign, then-candidate Trump indicated that trade with Cuba sat well with him.  “I think we should have made a stronger deal,” he said.

Now President Trump can strike a stronger deal, helping millions of his supporters by ending stifling regulations and encouraging the sale of their products to Cuba.

Jim Moran and Jeff Miller, The Hill

May 26, 2017

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