Agricultural campaign to end Cuba embargo gets complicated
March 13, 2015
After a trip to Cuba last week, U.S. agriculture leaders are more determined than ever to convince Congress to end the U.S. embargo on business with Cuba. However, their goals are shifting from selling U.S. commodities and foodstuffs to Cuba to potential sales of feed grains and equipment.
They also are dealing with the delicate question of Cuban food sales to the United States, including — and especially — sugar.
Ninety-five representatives of U.S. agriculture from a dozen states, including two former Agriculture secretaries — John Block, a Republican who served in the Reagan administration, and Mike Espy, who served in the Clinton administration — visited Cuba on March 1-4, Devry Boughner Vorwerk, the Cargill executive who chairs the U.S. Agriculture Coalition for Cuba (USACC), said in a telephone news conference Monday.
It was the biggest U.S. delegation ever to visit the island 90 miles from Florida, Vorwerk noted, and she repeatedly described the trip as a "journey."
"Our agribusiness and commodity group representatives had positive interactions with Cuban government officials, Cuban farmers and agricultural cooperatives on last week's learning journey, and we believe opportunity exists to boost agriculture in both our nations by forging a stronger relationship," said Vorwerk.
"We continue to call for progress on efforts in Congress to end the embargo with Cuba. This learning journey was a good first step, and as a result, U.S. agricultural interests are well-positioned to facilitate a strong, two-way relationship when the embargo is lifted," she added.
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While most previous press conferences on Cuba have been given by farm and commodity group leaders focused on the sale of U.S. commodities and food such as pork, chicken and rice, Vorwerk talked more about the potential for exports of equipment and feed that could be used in the development of Cuban agriculture.
U.S. farmers have been able to export food to Cuba on a commercial basis since 2001, but President Barack Obama's recent changes in Cuba policy will allow the export of farm equipment and tools. Vorwerk said U.S. manufacturers are still seeking clarity on how the regulations on the sales of equipment and tools will work.
After a meeting at which Cuban officials told the Americans about recent changes to Cuban foreign investment law, the Cubans took the U.S. delegation on five excursions to see Cuban agriculture and how it is changing, Vorwerk said.
Those excursions included an aquaculture facility in the Bay of Pigs, which is supported by the Norwegian government.
Aquaculture is a sophisticated growth industry, and the Cuban waters "are pristine," Vorwerk noted.
Some of the Americans also visited farms raising cattle, goats, vegetables, fruits, tubers, tobacco, sorghum, rice and dry beans. Others visited the port of Mariel, which Vorwerk said has been developed by Brazilians and is managed by Singaporeans. It has the potential to be used by U.S. companies as a regional base for Latin America.
Vorwerk noted that other countries, particularly Brazil, are already helping Cuba improve its agriculture. The Brazilians "are eating our lunch" in commodity sales because they have financing, Vorwerk said in a reference to the fact that U.S. law does not permit the Agriculture Department to grant the kind of concessionary financing on agricultural sales to Cuba that it grants to other low-income countries.
She added that she believes Brazil is investing in Cuban agriculture because the Brazilians think it is "only a matter of time before the United States ends the embargo."
Perhaps the most obvious agricultural export for Cuba is cigars, Vorwerk noted, adding that she had learned the United States is one of the biggest consumers of cigars in the world.
The commodity group representatives on the trip did not consider the talk about Cuban exports to the United States to be a threat, Vorwerk said, because they recognize that Cubans have to make more money in order to buy higher-value U.S. farm products.
In a follow-up call, Jennifer Myers of the National Corn Growers Association, who was on the trip, said that her members realize there needs to be "two-way trade." Cuban aquaculture, she noted, offers a "great opportunity" for U.S. corn and soybean meal producers.
Asked whether the Cuban government wants to develop food self-sufficiency, Vorwerk said the officials do want to increase production and efficiency, but they are limited by climate in production. Cuba also faces the question of whether to produce crops for export or for food, and needs "to seek the highest value for their land," whether that is in agriculture or in tourism facilities, she said.
The Cubans also told the Americans that they reorganized their sugar industry from a state trading enterprise into a holding company that oversees sugar production for the country. The Cubans invited the Americans to visit a sugar plantation and mill, where they saw that the Brazilians had supplied harvesting equipment.
One participant on the trip who asked not to be identified said some American delegates were reluctant to sign up for the sugar trip because they know that proposing sugar imports from Cuba will run into opposition on Capitol Hill.
The American Sugar Alliance, which represents cane and beet producers, is one of the few U.S. farm groups that have not endorsed the campaign to end the embargo. Vorwerk acknowledged that there were no sugar growers in the delegation.
The American Sugar Alliance declined to comment on the trip, but referred questions to a fact sheet it has produced that notes the United States is currently oversupplied with sugar and that Cuba has no U.S. sugar quota under the current sugar program. (See link.)
Vorwerk noted that, while the sugar industry seemed to be modernizing, tobacco farmers still use oxen in their fields.
"There is an inconsistency in technology," she said. To describe the U.S.-Cuban agricultural relationship, "I would use one word: potential. Potential on both sides."
For Cubans to export to the United States and for Americans to invest in Cuba, the embargo would "pretty much" have to end, she acknowledged. The delegation's job in Cuba, Vorwerk added, was not only to learn about Cuba but to explain the U.S. policy situation.
Last Saturday, all nine Republican presidential candidates at the Iowa Ag Summit in Des Moines said they oppose lifting the embargo until there are much bigger changes regarding political and human rights in Cuba.
Asked for a reaction, Vorwerk said, "We are unified in our voice as the U.S. Ag Coalition for Cuba. We will continue to tell the story. We know that not everyone agrees with us. The more we can share the images and stories from our learnings and the importance of Cuba as a natural market — hopefully, we will be able to change minds."
–The Hagstrom Report