This Week’s Headlines
Ag trade with Cuba in play for decade-plus
By JONATHAN CRIBBS
(Feb. 17, 2015) Since President Barack Obama announced in December his intentions to defang a half-century-old trade embargo between the United States and Cuba, big players across many American industries are jockeying to capitalize on new opportunity in the Caribbean nation.
But agricultural producers in the Mid-Atlantic region have had a years-long head start.
Virginia and Maryland have been trading with Cuba since federal restrictions were eased more than a decade ago to allow for the export of medical and agricultural products to the island nation.
Virginia expects to announce next month it exported between roughly $25 million and $35 million in products to Cuba in 2014, agriculture Secretary Todd Haymore said.
Maryland’s marketing efforts have led to more than $170 million in agricultural exports to Cuba since it began pursuing a relationship there in 2008, said Julie Oberg, a state agriculture department spokesperson.
Hopefully, it only gets better from here.
“We’ve really ratcheted our relationship up with Cuban officials in Washington and Havana [over the last eight years],” Haymore said. “Now that we’re actually seeing I think the beginning stages of strengthening diplomatic ties, we hope to again grow our exports and help the Cuban people with food products.”
Virginia’s seventh annual Governors Conference on Agricultural Trade in Richmond from March 9-10 will include a presentation from José Ramón Cabañas, chief of mission for the Cuban Interests Section in Washington and Cuba’s top diplomat.
Richmond was also one of Cabañas’ first stops after Obama announced his intentions in December as well. Virginia is Cuba’s third-largest trading partner after Louisiana and as Georgia, according to the most recent data available, Haymore said.
Its exports to Cuba peaked at $66 million in 2011, but have steadily declined since due to Cuba’s slowing economy and various embargo-related export hurdles between the two countries — restrictions Haymore said he’d like to see eased or removed.
Cuba, which has a population of about 11 million, cannot buy agricultural goods in the United States unless it pays in cash, and it cannot do business with U.S. banks, so money transfers must go through third-party foreign banks, incurring additional fees.
“It’s an unnecessary step that doesn’t add value to the transaction,” Haymore said.
Those hurdles lead to agricultural products that are priced artificially high and make them less competitive — particularly in a lagging economy — compared to products available in more Cuba-friendly nations such as Brazil or Argentina, he said.
Some Virginian apple exporters have been frozen out of business with Cuba recently because the nation has sought cheaper sources elsewhere in the world.
Most of Maryland’s exported products have been Perdue poultry, soybeans and crushed soy, Oberg said.
Former agriculture secretaries Roger Richardson and Buddy Hance both visited the Communist nation to bolster the state’s relationship.
Delaware agricultural secretaries have also visited Cuba to establish ties.
Millsboro-based Mountaire Farms signed an agreement with the Cuban government to send poultry there in 2007.
But access to Cuba is bound to get more competitive as exporting there gets easier.
Missouri farmers voiced an interest last month in exporting rice down the Mississippi River to New Orleans — an ideal shipping point to Cuba.
But Virginia’s port is also ideal, Haymore said, and Perdue, a massive international producer, is entrenched in the Chesapeake area with graineries and its own deep water port.
“Do I expect competition? Sure,” he said. “But I hope the work we’ve done ... will keep Virginia at the forefront. We’ve got some of the best producers in the world.”
U.S. lawmakers — Democrats and Republicans — have submitted a series of bills designed to ease trade and travel restrictions with Cuba over the last two months, but they face strong opposition in Congress.
Some of that legislation is being pushed by U.S. farming interests.