Announcement on Cuba Inspires Optimism in the Ag Industry
President Obama’s announcement of a series of executive actions on loosening trade relations with Cuba is providing optimism for U.S. agriculture. From commodities like corn, rice, wheat and soybeans to agricultural equipment manufacturers, the reality of ending the 50-year trade embargo seems like a real possibility.
“If Cuba resumes purchases of U.S. wheat, we believe our market share there could grow from its current level of zero to around 80% to 90%, as it is in other Caribbean nations,” said Alan Tracy, President of U.S. Wheat Associates in a joint statement with the National Association of Wheat Growers.
President Obama’s executive actions include loosening Treasury Department restrictions that require Cuba to pay for purchases of agricultural commodities through a third-party bank. Cuba will still have to pay in cash, but U.S. Banks will be allowed to deal directly with Cuban financial institutions.
Sales of U.S. agricultural products to Cuba peaked at over $710 million in 2008, before the recession, but fell to $350 million by 2013, according to the U.S.-Cuba Trade and Economic Council. Frozen chicken, soybeans and soy products, and corn are the main products Cuba now buys from the United States.
The President’s executive actions also include allowing shipments of farm equipment to Cuba to help the country’s small producers. “We look forward to serving customers in Cuba as we do throughout Latin America and around the world,” said Deere & Co. in a statement.
The President’s announcement has its detractors, however. Many U.S. Representatives and Senators oppose the lifting of sanctions due to the Castro regime making no concessions on human rights in return for the softened U.S. Stance.
“I have long been a supporter of relaxing agricultural trade restrictions with Cuba and providing humanitarian support for the Cuban people,” said U.S. Representative Michael Conaway (R-TX), incoming House Agriculture Committee Chairman. “However, the policies currently in place created advantages that the President has simply given away with this deal and will serve largely to enrich the leaders of Cuba.”
No matter what happens, the normalization of trade relations with Cuba faces a long and rough road ahead, as any lifting of a trade embargo will need to pass the Republican-controlled U.S. House of Representatives and Senate.
“I won’t even begin to project how many days it would take, or months, or years, for the restrictions to be loosened,” said Tom Sleight, President and CEO of the U.S. Grains Council. “I think what agriculture needs to do is to respond real positively.”
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