FarmPolicy

May 30, 2017

House Ag Committee Discusses Ag Trade with Cuba- H.R. 3687 Cuba Agricultural Exports Act

Categories: Trade

A House Ag Committee news release from Wednesday indicated that, “Today, the House Agriculture Committee held a hearing to examine the potential for expanded agricultural trade between the United States and Cuba. Much of the conversation centered on the Cuba Agricultural Exports Act (H.R. 3687) and the potential for removing financing restrictions that have limited agricultural exports to Cuba.”

Committee Chairman Mike Conaway (R., Tex.) indicated that, “[The stranglehold the Castro regime has had on Cuba] resulted in the United States imposing an embargo on trade with Cuba that has been in place in various forms for almost 60 years. In 2000, the Trade Sanctions Reform and Export Enhancement Act—known as TSRA, authorized certain sales of food, medicines, and medical equipment to Cuba subject to various restrictions on credit and financing. One such restriction requires Cuba to pay cash in advance for purchases, interpreted in 2005 by the Bush Administration to mean payment in cash before shipment of goods.

In December 2014, amongst a host of other changes, the Obama Administration announced its intention to modify the cash-in-advance provisions to require payment before transfer of title. While that move was generally applauded, I—and many of my colleagues—believe the U.S. secured too little in return for the litany of other concessions made to the brutal regime that continues to remain in power. The Castro regime remains one of the world’s most oppressive human rights violators. Their heavy hand is in everything—including agriculture—where ALIMPORT remains the sole entity allowed to trade in agricultural products with foreign entities.

“Against this sobering backdrop, I believe there lays an opportunity—albeit a rather narrow one—to make changes that will positively benefit both agricultural producers here at home while contributing to economic growth in Cuba. To that end, our colleague and General Farm Commodities and Risk Management Subcommittee Chairman Rick Crawford authored [H.R. 3687] which lifts the financing restrictions under TSRA while providing for both market promotion and U.S. agribusiness investment under strict safeguards. The Committee was involved in the development of that bill, and both Ranking Member [Collin Peterson (D., Minn.)] and I are co-sponsors.”

Ranking Member Peterson pointed out at last week’s hearing that, “Now, as we’re all aware, the Administration has taken steps to ease both trade and travel restrictions. This is a good step but there is still more work that we can do to open this market to American agricultural products. I would like to see the embargo lifted but am doubtful that it’s politically possible to do so now.

I do want to caution however, that with the exception of rice and possibly wheat, the potential benefits are limited – at least in the short term. Cuba is a small country with most people having very limited income. I visited Cuba in 2015 and from what I was able to learn from my discussions with Cuban officials it would seem that, without ending the embargo, there’s still a long way to go.”

Rep. Crawford spoke about his bill at the hearing (video replay below) and tweeted that, “We’ve got to change thinking with regard to #Cuba trade. Cold war has been over for many many years.”

U.S. Representative Rick Crawford explains why U.S. trade relations regarding agriculture with Cuba must change during a House Agriculture Committee hearing.

A news release Wednesday from Rep. Cheri Bustos (D., Il) indicated that, “The hearing today focused on a piece of legislation that Congresswoman Bustos strongly supports, the Cuba Agriculture Exports Act.

Rep. Bustos stated that, “Today’s Agriculture Committee hearing was a step in the right direction for Illinois farmers, and I am hopeful that we can move forward with a vote on this legislation so we can cut the red tape and barriers facing farmers and producers in our region.  By providing Cubans with access to the standard credit terms offered by virtually every other nation in the world, we can significantly grow our region’s agricultural exports, move toward normalizing relations with Cuba and strengthen our 21st century heartland.”

Meanwhile, the Washington Insider section of DTN reported on Friday that, “The U.S. lost a billion dollars in potential farm sales to Cuba over a span of a few years as result of the restriction, witnesses testified at the hearing. ‘Between 2013 and 2015, the Dominican Republic imported $1.3 billion worth of agriculture products from the United States,’ said [Matt Gibson, vice president at St. Louis, Mo.-based Bunge North America].  He noted that the two Caribbean islands have similar per capita incomes and populations. ‘During this same time, Cuba, however, imported only $262 million from the United States. That is over $1 billion to the U.S. agriculture industry left off the table due to the financing restrictions under which we must currently operate.'”

The DTN item added that, “While the legislation would be a net positive, more would need to be done before American farmers saw significant benefits, said CoBank ACB Senior Vice President of Agriculture Export Finance Karen Lowe. ‘I think in the short run there won’t be a very significant change, because many other things need to happen, particularly in terms of the creditworthiness of the importing entities in Cuba,’ she said. ‘But we have to continue to keep the ball moving so that over a period of time we will create a level playing field.'”

And McClatchy writer Sophie Ota reported on Wednesday that, “A handful of experts urged the House Committee on Agriculture on Wednesday to loosen restrictions on farm trade with Cuba, as legislators further contemplate U.S.-Cuba ties.

“Four witnesses from the agricultural industry encouraged the committee to support the Cuba Agricultural Exports Act, a bill that would repeal restrictions on export financing for agriculture shipments to Cuba.”

Ms. Ota also explained that, “Meanwhile, the only witness opposed to lifting sanctions, Mauricio Claver-Carone, the executive director of Cuba Democracy Advocates, described Cuba’s government as a ‘company’ that ‘values food over people.’

“‘Let’s debunk a myth,’ Claver-Carone said. ‘Financing agricultural transactions with Cuba isn’t about assisting small and midsize farmers on the island, but about financing the monopoly of the Castro regime.’

“Committee Chairman Mike Conaway of Texas, who presided over the hearing, spoke in favor of lifting restrictions, despite being ‘firmly opposed to lifting the embargo or restrictions on travel.'”

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