Frequent-flier miles may turn into more frequent agricultural export sales to Cuba and someday, perhaps, fresh produce imports from the island country.
U.S. agricultural exporters were at least hoping expanding opportunities after political movement in mid-April toward expanded contact with the communist country.
The Obama administration on April 13 lifted travel restrictions for Cuban Americans and also removed limits on how much money they could send to family members in Cuba.
Cuba’s economy is in desperate need of money, said Jim Allen, president of the New York Apple Association, Fishers. The decision to relax restrictions will increase the money supply in Cuba and that should lead to more trade, Allen said.
“Right now, they don’t have any money to deal with,” he said. “This is a big step.”
Allen said the real opportunity could come with removal of the embargo on Cuban goods entering the U.S. market, which has been in place since 1962.
“If they had something to sell, then I think the whole situation would change,” he said.
Mike Stuart, president of the Florida Fruit & Vegetable Association, Maitland, said unrestricted trade with Cuba would likely bring winter competition for Florida vegetable growers.
“I don’t think there is any question it would be a major disruption,” he said. “At some point in time it is going to happen. It is just a matter of when.”
Cuba was a significant exporter of vegetables to the U.S. in the 1950s and some believe the country would be positioned to compete with Florida and Central America producers, particularly for Eastern U.S. markets.
Even if the embargo was lifted immediately, it could take about 10 years before the country may be ready to compete in the U.S. market, said Tony DiMare, vice president of the DiMare Co., Homestead, Fla.
“If it was relaxed, it would take many years to develop the infrastructure back to be able to trade fruits and vegetables,” he said.
However, Cuba could wield a large influence on winter vegetable sales when that happens, DiMare said.
“Anytime you add trading partners importing like products to the U.S., it will have a negative effect in the market place,” he said. “It would probably be a huge factor.”
Total U.S. agricultural exports to Cuba totaled more than $690 million in 2008, up from $413 million in 2007, but only a fraction was from fresh produce. Apples sales to Cuba were valued at $1.7 million and grapes were at $500,000, according to the U.S. Department of Agriculture. Top commodities exported from the U.S. to Cuba include wheat, corn, soybeans, chicken, rice and dairy.
Export opportunities
That’s not because of a lack of interest in the potential export market. Produce industry leaders have traveled to Cuba to explore trade possibilities.
In 2008, state agriculture commissioners from New York and California led trade delegations to the island, and Frank Muir, chief executive officer of the Eagle-based Idaho Potato Commission, led a commission visit to Cuba in 2007 to explore seed and frozen potato sales possibilities.
John Keeling, executive vice president and chief executive officer of the Washington, DC-based National Potato Council, said April 15 Cuban officials have also visited Maine, North Dakota and Idaho to look at seed potatoes. “We have a protocol to ship seed potatoes down there, but to date there has never been a shipment.”
While Cuba has perhaps elevated interest in their market in part to build political support for relaxed trade rules with the U.S., agricultural leaders aren’t shy about expressing support for more normalized trade relations.
Bob Stallman, president of the American Farm Bureau Federation, Washington, D.C., said in a statement April 14 his group supports Senate Bill 428, which would remove general travel restrictions to Cuba.
“This legislation is an important step in easing trade restrictions on Cuba,” Stallman said in a statement. “Allowing unrestricted travel to Cuba will increase U.S. agricultural sales and boost tourism.”
U.S. agricultural goods have been eligible for export sales to Cuba since October 2000, when President Clinton signed the Trade Sanctions Reform and Export Enhancement Act of 2000.
Passage of Senate bill 428 should result in increasing exports to Cuba, Stallman said in his statement.
Language in an omnibus appropriations bill would allow travel on a general license rather than a specific license. Farm Bureau believes that will reduce delays in commercial sales.
The Farm Bureau also favors commercially defining “cash payments in advance” that would allow payments from Cuba to be wired directly to U.S. banks instead of going through a third-country bank as is currently required.
The group also favors more access to U.S. travel for Cuban agricultural inspectors to meet with suppliers and inspect facilities.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
