Common-sense next steps for US-Cuba agricultural trade

Common-sense next steps for US-Cuba agricultural trade

Few dispute the economic imperative of export growth for American agriculture.  With U.S. farm income having declined nearly 50 percent over the past four years, and with 95 percent of the consumers for most farm sectors residing outside the United States, expanding U.S. export opportunities offers the clearest path to restored economic health for our agribusiness community.

A new study by the US Agricultural Coalition for Cuba (USACC) points to Cuba, a country only 90 miles to our south, as a promising place for significant export gains. Despite the roadblocks to current US-Cuba farm trade, certain common-sense changes to promote agricultural trade between our countries could deliver large export benefits for America’s distressed farmers, while staying true to President Trump’s goal of fostering private-sector growth in Cuba.

The new USACC study confirms that although Cuba imports around $2 billion worth of food and agriculture annually, current market restrictions have limited U.S. agricultural exports to barely 11 percent of that amount, rendering meaningless America’s natural geographical advantage in trading with that country. The study estimates that if current restrictions could be loosened, rice farmers in Arkansas could expand their exports by over $37 million annually, capturing 75 percent of the $60 million Cuban market within 10 years. Poultry farmers in Alabama and Georgia could gain up to 65 percent of Cuba’s valuable poultry market. Wheat farmers in Texas and Kansas in time could gain 75 percent of the Cuban market, with a potential annual export value exceeding $150 million.

From state to state across the nation, U.S. agribusiness exports to Cuba could grow by impressive, quantifiable multiples, delivering more money into the pockets of U.S. farmers and more jobs throughout rural America.

Cuba’s private farmers, over half a million in number, should necessarily play a role in expanding U.S.-Cuba agribusiness trade. If private Cuban farmers could export more of their products to the United States, they would have more hard currency to buy U.S. agribusiness equipment and inputs, from seeds to fertilizer.  John Deere’s recently announced deal to sell U.S. tractors to Cuba and Caterpillar’s plan to open a distribution center in Havana make clear that opportunities exist for win-win synergies.

With a third of Cuban farmland now worked by private farmers, the opportunities for mutually advantageous farm trade have significant room to grow and present virtually no competitive risks for either country. Many Cuban private farmers produce tropical fruits, coffee and other products that are not produced in commercial quantities in the United States. What’s more is that farmers are a growing class of private land owners in Cuba, a shift away from the state dominated economy, and their efforts should be supported. For example, Cuba’s distinctive cigars, unique to the island nation, are almost completely grown by private farmers. The best way to support Cuba’s private farmers and America’s ailing farmers at the same time is to allow each country to sell the agribusiness they do best to the other.

One essential first step to enlarging American farm exports to Cuba is for Congress to pass my bill, the “Cuba Agricultural Exports Act,” which would allow private financing of agricultural exports to that country. That simple financing fix would unleash the power of the private marketplace to expand U.S. agricultural sales. The bill currently has 62 co-sponsors in the House, 43 of whom are Republicans, and has ample support to pass in the Senate as well.

Because agribusiness trade benefiting both countries will be more durable and synergistic than one-way trade, all other possible legislative and regulatory measures should also be pursued to encourage reciprocal bilateral sales. The administration avoided adding restrictions on U.S.-Cuba agricultural trade when it changed the Cuba regulations in October, which recognized the importance of agriculture to U.S.-Cuba relations and left open the possibility of further market liberalization to promote U.S. farm exports and Cuba’s entrepreneurial farmers consistent with the administration’s bilateral goals.

Measures taken now to build stable trade in the U.S.-Cuba agribusiness sector will help create a positive working relationship with Cuba’s new generation of leaders, deliver export gains to help restore health to American agriculture, and help Cuban entrepreneurs shape their country’s future. Now more than ever, America should be occupying this economic space.

Crawford is chairman of the Agriculture Subcommittee General Farm Commodities and Risk Management. He supports lifting the trade embargo with Cuba in order to increase opportunities for the agricultural industry.

This entry was posted in Normalization of Relations, The Blockade?. Bookmark the permalink.