Posted October 29, 2003 by publisher in Cuba Business.
By MARTIN J. KIDSTON | Helena Independent Record
HELENA – The Montana Farmers Union and other state agricultural producers are eager to begin trade with Cuba under a deal struck last month between the state’s congressional leaders and Cuba’s largest importer of food.
If the deal holds together, Hi-Country Beef Jerky and other Montana-based agricultural products could soon be shipped to the socialist nation, which sits only 20 minutes by jet from U.S. shores.
Brooks Dailey, vice president of the Montana Farmers Union, told a sparse audience Monday night at Carroll College that Montana’s delegation to Cuba was a success, and could someday help advance normalized trade and travel between the two nations.
Dailey, who accompanied Sen. Max Baucus and Rep. Denny Rehberg, along with Herb Karst, president of the Montana Grain Growers Association, said the details of the $10 million deal that resulted from the trip are in the final works.
“We went down there to open the door and expand trade into Latin American countries to the benefit of Montana producers,” Dailey said. “If we are lacking in our commitment, those markets will go to large conglomerates and other countries, and it won’t benefit Montana. We don’t want to see that happen.”
Working under stiff restrictions imposed by the U.S. State Department, the delegation could not discuss contracts or sign contract agreements with Cuban authorities, Dailey said.
But after a meeting with Pedro Alvarez, president of Alimport – Cuba’s largest importer of food – Baucus and Rehberg signed a memorandum of understanding that could open trade between Montana and Cuba.
Under the memorandum, Alimport has agreed to purchase $10 million worth of agricultural goods from Montana-based businesses in the next six months. The company’s interests include 3,000 tons of dry beans, beef, barley and wheat. The purchase is subject to fair market price, quality and delivery.
“We gave them some Hi-Country beer jerky,” Dailey said. “They were really impressed with that.”
Carey Hester, a senior international trade officer with the Montana Department of Commerce, listened to Dailey’s presentation with interest. After the night was over, Hester said that $10 million was an impressive start.
But Hester said that trade with Cuba is strictly regulated by the Office of Foreign Assets and Control, along with the U.S. Department of Commerce.
Under current restrictions, which were eased from previous ones by former President Bill Clinton, only medical supplies and agricultural products can be traded legally with Cuba.
With that in mind, Hester said, he was happy to see the Farmer’s Union making progress in Cuba and said the Montana Department of Commerce is doing what it can to open doors as well.
“We have talked with a bottled water manufacturer in Montana,” Hester said. “We looked at the issue on behalf of that company to see if they can sell to Cuba.”
Hester said his department is also talking with a Montana-based medical supply company for a similar trade.
“We would support anyone who wanted to do this,” Hester said.
But there are hurdles to clear, some of which have little to do with Cuba. Dailey named rail shipping costs out of Montana as the largest problem.
“We’re a captive shipper here,” he said. “Canadians can move products to Cuba cheaper than we can. It shouldn’t be cheaper, but it is.”
Dailey said it would cost less to move Montana products to Cuba via Seattle and Portland than it would to move the same products by rail to the Gulf Coast and then on to Havana.
For other countries selling to Cuba like Canada and Australia, Dailey said, distance and cost have never been an issue.
“Cost is something we have to work on,” Dailey said. “We’ve got to do whatever we can to expand Montana products into other countries.”
Dailey said the Montana Farmers Union has maintained profitable relationships with partners in the Pacific Rim, as well as Egypt and Saudi Arabia. He said it’s important to expand that market to places like Cuba, Colombia and Central America.
“The more we can get our product into new markets, the higher demand there will be for our products,” Dailey said. “When you increase the demand, there’s a pretty good chance the farmer can get more money for his commodity.”
The U.S. has maintained a trade and travel embargo on Cuba since 1963 while other countries, including Canada, have continued trading with Cuba.
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