WASHINGTON, July 1, 2015 – If and when the U.S. lifts its long-term trade restrictions on Cuba, American grain producers will be ready to capitalize on new market opportunities, Rob Elliott, the first vice president of the National Corn Growers Association (NCGA), told Agri-Pulse Tuesday after he and industry allies returned from a weekend scouting trip to the island.
“Folks in Cuba anticipate what reestablishing diplomatic relations might lead to… (and) they’re starving for the opportunity for something to happen,” Elliott said. Currently, Cuba imports about 35 million bushels of corn annually from the U.S., which “isn’t huge,” he admitted, but that figure is likely to increase if trade restrictions are relaxed.
Cuba has almost no poultry production and very little egg production, Elliott said. And the dairy industry shrunk drastically around 1989 with the collapse of the communist bloc in Eastern Europe and the subsequent fall of the Soviet Union, which had been subsidizing Cuban agriculture with livestock feed. Today, Cuba, with a population of 11 million people and an agricultural market worth $1.7 billion, imports 80 percent of its food.
With Cuba just 90 miles away from the U.S. mainland, American grain producers are uniquely positioned to export the feed vital to growing the country’s livestock sectors, Elliott argued.
He suggested that the U.S. could maximize trade opportunities in Cuba by investing in port infrastructure, like Brazil has at the Port of Mariel on Cuba’s north coast. Cuba has “a lot of open land” and “a lot of labor,” but “they don’t have a lot of capital,” to set the stage for increased foreign trade, he said.
In addition to Brazil, Canada, European nations and China “are in there looking at, and proposing” possible investments, Elliott said, and in that way “are probably ahead of the U.S.”
While the U.S. has been allowed to export agricultural products to Cuba since 2000, “we’re probably not their favorite trade partner because of some of those hand-tying conditions that we’ve got set up,” Elliott said. (Today, U.S. and Cuban officials are expected to publicly announce they will open embassies in each other's capitals and re-establish diplomatic relations for the first time since 1961.)
Under current law, the U.S. cannot import any products from Cuba and U.S. banks are prohibited from providing lines of credit for Cuba-bound exports, so deals are often held up or limited by cash-only requirements.
There are several bills before Congress that would “open (up) opportunities to do more trade” by loosening these restrictions, Elliot said. “This embargo… hasn’t worked, maybe it’s time to try a different route now.”
Other NCGA leaders Chris Novak and Zach Kinne were joined on the trip by the chair, vice chair and CEO of the U.S. Grains Council: Ron Gray, Alan Tiemann and Tom Sleight. Doyle Lentz, the chairman of the North Dakota Barley Council also participated in the trip. The group met with representatives from ALIMPORT, the Cuban government agency that manages all of the country’s imports, in addition to foreign trade and agriculture officials. “What we heard from the Cuban people was that they would welcome U.S. investment, and at the very least just opening to tourism would help them significantly with their economy,” Elliott said.
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