Anticipating action in Congress to restart agricultural trade with Cuba after a long hiatus, USDA is working to put the pieces in place that will lead to greater opportunity for U.S. farmers.
The island nation of 11 million people imported almost $2 billion in agricultural goods in 2014, including $300 million from the U.S. But those numbers were down in 2015, dropping 48 percent to $148.8 million, and a steep decline from the more than $600 million in 2008, USDA Acting Deputy Under Secretary Michael Scuse said in conference call with the press on Tuesday.
“We’ve seen a tremendous drop in trade,” he said.
Agriculture has been limited by cash-only trade, unable to use the trade promotion and credit assistance programs that are “hugely successful” in trade with other countries, he said.
“Those are tremendous barriers. If we can eliminate those barriers, I think we’ll see a tremendous increase in our exports to Cuba,” he said.
Agriculture is going to be key in trade between the nations, but Congress has to make legislative changes to allow things to move forward, he said.
The Senate Appropriations Committee took major steps in that direction last week, including voting to lift the bans on export financing and travel to Cuba, Scuse said.
“We’re hopeful the House will agree to the measures put forth in the Senate,” he said, adding that he thinks more members of Congress are seeing the need.
Meanwhile, USDA is moving forward, laying the groundwork that will help restart long-dormant agricultural relationships, he said.
USDA and the Cuban Ministry of Agriculture have signed an memorandum of understanding to increase bilateral cooperation in agriculture, and USDA sent a technical team to Cuba to identify those areas.
USDA is also authorizing 22 commodity research and promotion programs to use funding for information-exchange activities with Cuba and so far has received 11 requests to participate in that program, he said.
The agency is also working with the State Department to establish a presence in the country, which is crucial to effective trade relations, he said.
Many state departments of agriculture in the U.S. have been working on relationships with Cuba since 2002, and numerous state delegations have traveled to the country over the past year to try to build relationships with Cuban government officials, he said.
USDA also recognizes the need for companies and industry representatives to visit the country and build a foundation for trade, he said.
Sitting just 90 miles off the southeast coast of the U.S., Cuba offers plenty of opportunity for U.S. ag products. The U.S. has a huge advantage over competitors — if nothing else, just in transportation costs, he said.
Poultry, soybean oil, soybeans and corn currently represent the majority of U.S. ag exports to Cuba, but there is plenty of opportunity for other products. Rice is one with perhaps the highest potential, given Cuba’s per-capita consumption of the grain. Fruits and vegetables also offer a lot of potential, with demand expected to rise with the influx of U.S. tourists, he said.
The U.S. livestock industry should also see a boon, not only in animal products but livestock genetics as the country seeks to rebuild those sectors. Ag equipment will also be in demand going forward as Cuba’s ag sector grows, he said.