| Miami…"/>

Havana Cuba Business Travel Culture and Politics

Havana Cuba News

Cuba Business News

Posted January 19, 2004 by publisher in Cuba-US Trade

Email this article | Print this article | Search Havana Journal        

BY JANE BUSSEY | .(JavaScript must be enabled to view this email address) | Miami Herald

INDIANTOWN - Iris Wall’s High Horse Ranch lies more than 100 miles—and further in perspective—from Miami and its staunch supporters of the U.S. embargo against Cuba. But it is in places like this cattle ranch—deep in rural America—that agribusiness has started to chip away at the decades-old restrictions against trade and other business dealings with Cuba.
Since a 2000 trade bill, the U.S. Trade Sanctions Reform and Export Enhancement Act, allowed the flow of some trade with Cuba—on the condition that President Fidel Castro’s government pay cash—farm exports have soared from a few million dollars in 2001 to an expected $230 million or more in 2003.

Hundreds of companies and individuals, ranging from steamship lines to purveyors of wine and growers of soybeans, have set up trade and other deals with Cuba, and the United States is now Cuba’s single largest source of imported food and agricultural products. For every $4 Cuba spends on food, $1 is going to U.S. growers or producers.

But ever since the resumption of U.S. food exports in December 2001—after a hiatus of some four decades—the trade has been controversial.

‘‘While there may have been a possible argument [to lifting the embargo] 10 or 15 years ago, today—when every day it seems more imminent that Castro will go on to a different life—the best leverage the U.S. government will have on a future transitional government in Cuba is the embargo, so why lift it?’’ said Jorge Arrizurieta, a prominent Cuban-American who is currently executive director of the Florida FTAA.

But for scores of American exporters, brokers, politicians and farmers who already have logged hundreds of trips to Havana and other parts of the island, the export numbers are proof of the success of their goal to open markets and increase sales.

RESTORING CATTLE TRADE

On a recent brisk morning at High Horse Ranch, just outside Indiantown and some 30 miles northwest of Jupiter, Florida exporter John Parke Wright rode a horse alongside the 74-year-old Wall to view the cattle and savor the thought of restoring Florida-Cuba cattle trade to its once-thriving status.

‘‘I personally waited 40 years for this opportunity,’’ said Wright, a scion of the Lykes family, which has a long history in Florida in the cattle, citrus and steamship line businesses.

As chairman and chief executive of J.P. Wright & Co., the 54-year-old executive is currently spearheading an alliance of Florida ranchers working to develop the export market to Cuba. Florida-bred cattle, they say, are ideal for the depleted Cuban herds; they are accustomed to the heat, humidity and mosquitoes.

Cuba is set to purchase 250 head in the first quarter of this year and has pledged to move forward when issues surrounding the mad cow disease scare in the United States have been resolved. A Cuban delegation plans to visit Florida this week to inspect cattle targeted for export.

‘‘This is not about selling a few cows,’’ says Wright. “This is about establishing a foundation of resupply of healthy Florida-bred beef and dairy cattle to the island nation of Cuba.’‘

But among those who see the embargo as the only means of pressuring the Castro regime or encouraging a transitional government, there is still bitter resistance to lifting or even easing the myriad restrictions on trade, investment, travel, remittances and other transactions with Cuba that have been in effect since the early 1960s.

And despite the growing farm trade, verbal exchanges between Washington and Havana have been especially testy of late.

The Bush administration recently lobbed a series of verbal attacks at Castro’s government, now in power for 45 years, accusing the Cuban leader and Venezuelan President Hugo Chvez of mischief in the hemisphere and canceling a scheduled meeting to discuss immigration with the Cuban government.

HEATED EXCHANGE

Roger Noriega, assistant secretary of state for Western Hemisphere affairs, took a shot at Castro last week, charging that “his actions to destabilize Latin America are increasingly provocative to the inter-American community.’‘

In response, Granma, the Cuban Communist Party newspaper, published a 3,000-word editorial, calling Noriega’s words ‘‘shameful lies,’’ and lambasting the ‘‘swarm of liars’’ in the highest level of power in the United States.

But neither Havana nor Washington have canceled travel visas for farmers, although the U.S. State Department denied travel permits to organizers of the 2002 U.S. Food and Agribusiness Exhibition in Havana and pulled the plug on the event in 2003.

Still, last November, 71 American companies from 18 states and Puerto Rico attended the International Fair of Havana to push their products alongside scores of other nations.

And both the White House and the Castro regime have allowed the current exception to the embargo that permits American companies to export food, agricultural and medical products to Cuba as long as the Caribbean island pays cash.

‘‘You have to separate a congressionally required act and what the administration’s policy is,’’ said a State Department official. “The policy remains the same, to work toward a transition to a democratic government respecting the rights of citizens in Cuba.’‘

For the small group of executives who met with Wright at Wall’s ranch recently, their repeated trips to Cuba and continued sales are encouraging.

They are eager to create business relationships, bring together buyers and sellers, manage the risks, and work out the payment terms—all cash transactions carried out through European banks.

‘‘I have made seven trips to Cuba and each time we’ve been fortunate to come back with an order,’’ said Chris Aberle, director of sales at FCStone, a commodities trading company headquartered in Des Moines, Iowa.

SALES SURGE

In the past 18 months, FCStone, a grain cooperative with 750 members, has done $55 million in sales to Cuba, selling some 350,000 [metric] tons of corn, soybeans and wheat. ‘‘My responsibility at work is to open new markets,’’ said Aberle, who is based in New Smyrna Beach. “While I was giving a speech in Cuba [in December], we were opening an office in Beijing.’‘

At first Cuba balked at the 2000 trade sanctions act, saying a law that required payment in cash was insulting. But a month after Hurricane Michelle, which ravaged Cuban agriculture in November 2001, Cuba took delivery of the first shipments of American grains since 1963.

Opponents, as well as some who advocate trade with Cuba, argue that what is going on is not so much trade as politics.

‘‘From the Cuban perspective, which is essentially Fidel Castro’s perspective, this is not necessarily trade. He could buy these things anywhere. This is part of a concerted effort to put pressure on the U.S. government and get a transition that is to the liking of the Castro government and of its followers,’’ said Paul Alcazar, a director of the Cuban Liberty Council, a Miami exile organization that supports the embargo. “It’s very token and has defined political goals.’‘

`POLITICAL COMPONENT’

‘‘You need to put it in the context of politics,’’ said John S. Kavulich, president of the U.S.-Cuba Trade and Economic Council in New York, which tracks two-way business with Cuba. “There was and remains a substantial political component to each purchasing decision made by the government of Cuba as it relates to the United States.’‘

Since Cuba’s demand for medical products would be too small to whet the appetite of big pharmaceutical companies to press Congress for more economic opening, Kavulich says, the Castro government has focused on food and agriculture constituencies, which wield considerable clout on Capitol Hill.

‘‘The Cuban government has read successfully that there is more political advantage to be gained from purchasing food and agricultural products than from healthcare products,’’ Kavulich said.

Since December 2001, Alimport, the Cuban company in charge of food imports, has purchased $590 million in food imports from 113 American companies, and Cuba has become increasingly sophisticated in purchasing commodities.

The political overtone of the deals grates on some Cuban exiles.

Joe Garcia, executive director of the Cuban-American National Foundation, complains that Havana targets purchases to congressional districts where lawmakers could be persuaded to press for federal financing for the food purchases.

The foundation is not pushing to roll back the exceptions to the trade embargo, but Garcia called the growing trade and growing Bush administration rhetoric “an absolute contradiction.’‘

‘‘More trade has gone on with this administration than any administration since John F. Kennedy,’’ he said. “It’s going to get larger and not smaller. The Cubans have run out of credit everywhere else.’‘

In December, on the second anniversary of the first food sales, Cuba signed three contracts for grain purchases based on prices in the Chicago commodities futures market, a step toward bringing the country into the global marketplace.

The contracts were $25 million for Cargill, the giant Minneapolis processor, marketer and distributor of agricultural products; $13.5 million for Archer-Daniels-

Midland in Decatur, Ill.; and $7 million for FCStone.

ALTERNATE VIEW

Alcazar, who is a partner in Projecom, a consulting and development company for technology companies mostly in Brazil and Mexico, takes a dim view of the increasing trade. Many Cuban-Americans, who have waited more than four decades to return to the island and who blame Castro for a reign of repression, say that the embargo should not be lifted on his terms.

Besides, they contend, the food is used to feed tourists and often does not reach the broad population.

Castro disagreed during the 2002 U.S. Food and Agribusiness Exhibition in Havana: “Of course we can’t prohibit a tourist from buying bread, but a part of the goods we have been buying will be consumed by our poultry. Chickens when they are well fed can be very productive. Dozens of millions of tons of food have been distributed for free to six million people in Cuba.’‘

Worries about how the agricultural exports are used, as well as opposition to Castro, have kept some traders, especially those in Miami, from touching the Cuba deals.

John Abisch, president of Econocaribe Consolidators, said his company was not interested because of opposition from many in Miami’s trade community. ‘‘A lot of them were strongly politically opposed to do anything with Castro,’’ Abisch said, adding he will wait to look for a partner after a change in the Cuban government.

But other companies began staking out a strategic position from the moment that such business was legal. Crowley Liner Services, headquartered in Oakland, Calif., was first in line to obtain a U.S. license because the Caribbean business is so important for the steamship liner.

‘‘When it became clear that the trade sanctions were being lifted, we rushed to Washington and we went to the Treasury Department,’’ said Michael Hopkins, vice president of Latin American operations at Crowley in South Florida.

Hopkins said the issue was sensitive, but Crowley wanted to be first. ‘‘We walked into Cuba cold and started talking to people,’’ he said.

The trade has proven to be a good market, exporters say, since sales are growing and companies do not have to worry about arranging export financing. All financial transactions are handled through European banks with the U.S. exporters receiving cash.

AVOIDING COSTS

Because of the proximity, Cuba can also save money by purchasing smaller orders than it would have placed with China, Vietnam or Russia, and it avoids warehousing costs.

‘‘American farmers believe it is the job of the government to open new markets for them,’’ said Philip Peters, a Cuba analyst who is vice president of the Lexington Institute, a free-market think tank in Arlington, Va.

‘‘It is hard to say that it is immoral to trade with Cuba and not immoral to trade with China or Vietnam,’’ he said.

Some analysts say now that the door has been opened to limited trade with Cuba, there is no going back.

‘‘They wouldn’t have the votes to go back on it now,’’ said Antonio R. Zamora, a Bay of Pigs veteran and a founder of the Cuban-American National Foundation. Zamora, who now favors lifting the embargo, is no longer a foundation member.

Zamora, a Miami attorney, said there is still a major chasm in the Cuban-American community between those who will accept regime modification—which means accommodation with the existing political, economic and social structures of Cuba to make the country more open and a more efficient free-market economy—and those demanding regime change.

The easing of the trade embargo also highlights an aspect of Florida-Cuban relations often forgotten. Not only are there millions of Cubans with ties to the United States because they have family here, but some Floridians are also renewing old ties with Cuba.

PEOPLE, NOT POLITICS

Wright’s ancestor, Capt. James McKay of Tampa, shipped cattle to Cuba in 1858. The family also had ranches on the island before the revolution. ‘‘In a family sense, cattle and shipping go back 150 years,’’ Wright said. For him, supplying food to Cubans should be about feeding people and not politics.

‘‘Thank goodness the cattle business has nothing to do with politics,’’ Wright said. “We have a legal license. There have been no political discussions.’‘

High Horse Ranch’s Wall traveled to Cuba in December when a number of exporters attended a ceremony celebrating the second-year anniversary of food sales. The cattlewoman said that her Florida herd of 750 cattle was not for export because it lacks the strict documentation that exports require.

But she said her desire to spur Florida trade with Cuba stems from one sentiment: “I just love the Cuban people.’‘

  1. Follow up post #1 added on March 16, 2004 by John Parke Wright

    Dear Amigos de HAVANA JOURNAL,

    Thank you for presenting the story from the Miami Herald entitled : “Is the US becomming Cuba’ bread basket ? ”

    I am very pleased to work for agricultural relations between the ranchers in Cuba and in Florida and I wish to invite all of Cuba’ ranchers to the Boyeros Cattleman’ Fair in La Habana on March 24-28 where I will be showing cattle from the United States.

    I look forward to seeing you all at BOYEROS on March 24,25, and 26 !

    Gracias y Saludos Amigos,
    Sincerely,

    John Parke Wright


  2. Follow up post #2 added on March 16, 2004 by John Parke Wright

    Dear Amigos de HAVANA JOURNAL,

    Thank you for presenting the story from the Miami Herald entitled : “Is the US becomming Cuba’ bread basket ? ”

    I am very pleased to work for agricultural relations between the ranchers in Cuba and in Florida and I wish to invite all of Cuba’ ranchers to the Boyeros Cattleman’ Fair in La Habana on March 24-28 where I will be showing cattle from the United States.

    I look forward to seeing you all at BOYEROS on March 24,25, and 26 !

    Gracias y Saludos Amigos,
    Sincerely,

    John Parke Wright


Would you like to add more information?


Only members can add more information. Please register or log in

  • Advertise at Havana Journal Inc
Images of Cuba
Boxing cigars in Cuba
Follow Havana Journal
SUBSCRIBE to our Cuba Watch newsletter
LIKE us on Facebook

FOLLOW us on Twitter

CONNECT with us on Linked In

Section Archive
Havana Journal, Inc. BBB Business Review



Member of the Association for the Study of the Cuban Economy