Posted November 26, 2003 by publisher in Cuba Business.
by Julianne Johnston | [url=http://www.AgWeb.com]http://www.AgWeb.com[/url]
Kansas State University ag economist Barry Flinchbaugh says opening trade and tourism with Cuba would benefit U.S. farmers and would help boost the standard of living for the Cuban people. The economist has returned from a five-day trip to the country, and said those in the wheat and dairy businesses may have the most to gain.
“Cuba’s clearly a great potential wheat market, simply because they don’t grow wheat there,” said Flinchbaugh. “And they want hard red winter wheat. For 42 years we’ve had this policy of isolation. After 42 years, you’d think it would be clear that our policy hasn’t worked and that we should try something different.”
Foinchbaugh said he believes Cuba could be a billion-dollar market for the U.S. agricultural community. That, combined with the transportation advantage (the small island nation sits just over 90 miles from the Florida Keys), should be enough to make the current administration take another look at opening trade and tourism.
On Oct. 28, 2000, President Clinton signed into law the Trade Sanctions Reform and Export Enhancement Act of 2000. The legislation changed the U.S.-Cuba trade relationship by allowing certain exceptions from U.S. sanctions legislation for agricultural and medical exports. However, it was not comprehensive and some prohibitions remain, according to the U.S. Department of Agriculture’s Foreign Agricultural Service. Furthermore, the legislation did not change the ban on U.S. imports
The United States has sold $620 million worth of food (agricultural products) to Cuba since the 2000 policy change.
“Because the United States can’t buy anything from Cuba, even when we do send agricultural products over, they’re about 20 percent higher in cost than they need to be because the ship has to come back empty,” Flinchbaugh said.
The current process is complicated further by the fact that U.S. banks cannot do business with Cuba. When Cuba wants to buy food or medicine from the United States, it first must send money to another country - Canada or Mexico, in some instances, he said.
As part of its tour, the Kansas group met with Alimport, the agricultural trade arm of the Cuban government. “Alimport’s top official kept saying to us, ‘Kansas hard red winter wheat - we must do business,’” Flinchbaugh said.
The Kansas contingent also toured farms and a cigar production plant. The country’s biggest agricultural product for export is tobacco for cigars, Flinchbaugh said.
Generally, Cuban farming operations fall into three categories, he said. Individuals can own their own farms and can pass the land on to the next generation. However, there also are democratically operated farmer-owned cooperatives, as well as state-owned farms. “They (Cubans) are very much into organic agriculture,” Flinchbaugh said, adding that tobacco farms are fertilized through earthworm manure.
Livestock operations, including equipment the group saw, were primitive. Although the pastures were lush, there was no protein available through feedgrains for the animals, he said, adding that chicken, pork and fish were much more prevalent at meals in Cuba than was beef.
“There is great potential for (U.S.) dairy business in Cuba,” the economist said, noting that much of the milk sold there is in powdered form and imported from New Zealand. We haven’t traded with Castro for 42 years because of his repressionist policies on human rights. But by not trading with Cuba and not allowing tourism, we’re really punishing the Cuban people, not the Cuban government,” Flinchbaugh said. “Isolationism hasn’t worked. We’ve tried it for 42 years. We need to think outside that box and help bring freedom and democracy to the Cuban people.”
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