Ag Policy Blog

Agribusinesses See Benefits with More Open Cuba

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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A lot of people seemed fixated by the potential new-found access to Cuban cigars. Most leaders in agriculture, however, see greater potential for commodity and agricultural-equipment exports to the island and its 11.3 million people.

Agriculture Secretary Tom Vilsack stood with his boss and touted the agreement with Cuba to normalize diplomatic relations and loosen some trade restrictions in the country.

"Throughout history, agriculture has served as a bridge to foster cooperation, understanding and the exchange of ideas among people. I have no doubt that agriculture will continue to play that powerful role as we expand our relationship with the Cuban people in the coming years.

Vilsack added, "Today's announcement expands opportunity for U.S. farmers and ranchers to do business in Cuba. It removes technical barriers between U.S. and Cuban companies and creates a more efficient, less burdensome opportunity for Cuba to buy U.S. agricultural products. It also makes those products far more price competitive, which will expand choices for Cuban shoppers at the grocery store and create a new customer base for America's farmers and ranchers."

Minnesota Public Radio reported Cargill Inc. has worked over time to get rid of the embargo. The presidential announcement was welcome news, said Cargill Vice President of Corporate Affairs Devry Boughner-Vorwerk.

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"For Cargill we were quite pleased and encouraged," Boughner-Vorwerk said. "We have been working for quite some time to end the embargo on Cuba. And for us we really saw this as just a historical moment." http://www.mprnews.org/…_

An ADM spokeswoman told Dow Jones that the company would look for opportunities in Cuba. "Should trade regulations change between the US and Cuba, we will be ready to adapt to new opportunities as they arise."

Dow Jones also quoted Caterpillar Inc., as also backing more normalized trade. "Cuba needs everything we make in the United States," says Bill Lane, global government affairs director for Caterpillar Inc., who said the company hopes to soon install a dealership in Cuba that can sell agricultural, construction and mining equipment. "We've been calling for a new policy toward Cuba for 15 years."

The USA Rice Federation touted the White House changes allowing U.S. and Cuban banks to work together.

"The changes to banking are very important because they will significantly reduce red tape and costs associated with doing business with Cuba," said Betsy Ward, president and CEO of the USA Rice Federation. "Since the mid-1990's USA Rice has taken leadership among commodity groups in calling for an end to the economic and travel embargo on Cuba, so we're encouraged by today's announcement."

Ward said USA Rice Federation has long argued that the "embargo was not on Cuba, as they could source rice and other products from around the world, but rather on the rice growers in the U.S., whose own government cut them out of one of the world's top markets, just 90 miles from our shores." USA Rice is also a founding member of the U.S. Agriculture Coalition for Cuba (USACC), a group dedicated to lifting the embargo, the group stated.

Despite the positive affirmations from agricultural corporations and trade groups, the incoming House Agriculture Committee chairman took a decidedly more negative view of the White House announcement. Rep. Michael Conaway, R-Texas, called the agreement with Cuba "a poorly negotiated deal for America and for the Cuban people." He added that the U.S. gave up leverage in exchange for few tangible benefits and does nothing to improve Democracy or human rights in Cuba.

“I have long been a supporter of relaxing agricultural trade restrictions with Cuba and providing humanitarian support for the Cuban people," Conaway said. "However, the policies currently in place created advantages that the President has simply given away with this deal and will serve largely to enrich the leaders of Cuba.

Conaway added, “The original embargo imposed by President Kennedy and the Cuban Democracy Act was of 1992 was explicitly intended to maintain sanctions on Cuba until the government moved toward ‘democratization and greater respect for human rights.’ Neither of these goals has been achieved with this deal.

“The President has yet again damaged America’s ability to use negotiations to make positive changes around the world.”

Follow me on Twitter @ChrisClaytonDTN.

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Freeport IL
12/27/2014 | 9:46 AM CST
The Cuban policy change looks to be more about US security. Cuba was in bad shape following the Soviet collapse in 1991. Since that time Cuba has found new "friends" in China, Venezuela and Bolivia. They have an interest in Cuba's potential oil resources and may only be friendly when oil prices are up. Maybe the US policy makers are trying to make inroads prior to major Russian problems. It might be politically easier to "make friends" with Cuba; now, then to "Bail" them out; later, in the event of major Russian problems. It may also be easier with this new "friendship" to keep another Bay of Pigs from occurring. Freeport, IL
M Swanson
12/23/2014 | 12:25 PM CST
Wondering how enriching dictators pocketbook so he can murder/dominate more of his civilian population is a failed policy?
Jay Mcginnis
12/18/2014 | 11:09 AM CST
50 years of a failed Cuban policy is enough, glad Obama led and took off the embargo, sell em grain!