Agriculture Secretary Tom Vilsack is part of the U.S. delegation in Cuba today as part of President Obama’s visit to the island, the first by a U.S. president in 88 years. U.S. farm groups have high hopes for supplying a large share of Cuba’s $2 billion a year in food and agriculture imports, although sales have trended downward since peaking at $710 million in 2008. The USDA declined ahead of the trip to say what is on Vilsack’s schedule.
The president’s agenda calls for meeting Cuban President Raul Castro today. White House officials say the two leaders “will review the process made on the normalization of relations” that began in December 2014, and will include a discussion of “greater commercial opportunities” that would benefit both nations.
After meeting the Cuban president, Obama is to attend an event that celebrates entrepreneurship. It will include sessions bringing together U.S. and Cuban business operators and government officials to discuss the commercial opening between the nations.
Food and ag trade have been exempt since 2000 from the overall U.S. trade embargo with Cuba. Since Obama announced normalization of diplomatic relations, one agriculturally related investment has been approved by both countries — an assembly plant in Mariel for small utility tractors by Cleber LLC, based in Alabama, for farm and construction use. The United States also has approved a proposal by Florida Produce to lease a 70,000-square-foot warehouse in central Havana to distribute U.S.-grown and processed foods and agricultural commodities. Cuba has yet to act on the warehouse proposal.
Although U.S. ag exports to Cuba shrank to $171 million last year, the United States remains one of its leading suppliers. The major exports are frozen chicken, soybean meal, soybeans, corn and herbicides. By law, Cuba is required to pay on delivery for U.S. products. It can get concessional terms, such as long payment periods, or even barter with other supplies. The state-run food importer, Alimport, also seems to adjust its purchases of U.S. products to reflect the foreign policy goals of the government.
In a loosening of regulations, USDA will allow farmer-funded checkoff programs, such as those that promote beef, milk and cotton, to promote U.S. agricultural products in Cuba, said The Hagstrom Report. The USDA is not allowed to use federal funds for market development in Cuba. A spokesman for USDA was not immediately available for comment.
At its peak a decade ago, Cuba ranked in the top 30 of U.S. farm export markets. Last year, it was 60th, according to the U.S.-Cuba Trade and Economic Council, which monitors trade.
Most farmers focus on exports to Cuba, but in Florida growers worry about additional competition if Cuba is permitted to ship produce to the United States, reports USA Today. The Cuban farm sector is heavily organic, partly because herbicides have been too costly to import. Growers also worry about the possibility of plant diseases and pests that could be introduced onto the mainland from Cuba.