Ending Cuba embargo could benefit region

Farm & Ranch Guide

After decades of a trade embargo against Cuba, there is little evidence that it had any impact on a change in policy or politics on the island nation. It’s time to seriously consider a different approach, especially following a recent report that indicates lifting the embargo could be beneficial for the Northern Plains states that produce wheat, corn and soybeans.

Engage Cuba and the U.S. Agriculture Coalition for Cuba, two leading groups working to end the embargo on Cuba, released a comprehensive report on the significant economic benefits for our region regarding increased trade with Cuba.

Consider this:

– According to the report, of Cuba’s nearly $2 billion in agricultural imports in 2015, U.S. ag exports totaled $149 million, a drop of 48 percent from 2014. The U.S. share of total exports fell to less than 9 percent in 2015, down from 40 percent in 2009.

– In 2015, of Cuba’s nearly $2 billion in ag imports, 12 percent was wheat. Prior to the embargo, wheat was one of the top four ag exports from the U.S. to Cuba. In 2009 the U.S. had 43 percent market share but has not shipped wheat to Cuba since 2011 and has been surpassed by the European Union and Canada due to a law – the Trade Sanctions Reform and Export Enhancement Act of 2000 – that prohibits U.S. exporters from extending credit to Cuba.

– The U.S. had been the #1 or #2 supplier of agricultural products from 2003 to 2012 but is now Cuba’s #5 supplier after the EU, Brazil, Argentina, and Vietnam – countries that are able to provide financing.

– Cuba already imports up to 80 percent of its food and agricultural imports are expected to grow as increased tourism fuels demand for food products, especially those of higher quality.

The groups are advocating for the bipartisan Agricultural Export Expansion Act of 2015  (AEEA). The AEEA would present opportunities for agricultural trade with Cuba which could benefit our farmers by allowing U.S. exporters to extend credit, export and technical assistance, and market development programs. It would also make our exports more competitive and allow our exporters to recapture lost market share.

As stated in the report, there is considerable room for growth of exports to Cuba from North Dakota, and also Montana and Minnesota, if U.S. policies are changed, especially for wheat, as well as corn and soybeans.

Wheat is a primary revenue source of the region’s agriculture sector and a major economic driver. Cuba’s growing agriculture markets provides tremendous opportunities for our region to increase exports and strengthen its economy.

As with wheat, the U.S. used to be a major supplier of soybeans and corn, but has lost market share to Argentina and Brazil. Soybeans, feed grains, corn, and soybean meal — all commodities produced in the region — will be increasingly important as Cuba’s livestock sector develops in the longer term.

Changes in U.S. policies, which allow U.S. exporters to extend private credit to Cuba, can open opportunities for agricultural trade and, as the report states, there is significant room for growth of our region’s ag exports.

The report is the second analysis by Engage Cuba on the state specific benefits that U.S. agribusiness stands to gain in future trade agreements with Cuba. In addition to North Dakota, the report highlights benefits of increased trade to several other states.

Significant opportunities exist for American agribusiness in Cuba, from exporters of agricultural commodities and food products to associated industries that will also benefit from greater market access.

We need to urge Congress to pass legislation to remove restrictions on extending credit for agricultural exports to ensure that our farmers are able to take full advantage of Cuba’s growing agriculture markets.