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Agricultural Sales to Cuba, 2001-2002
Trade Sanction Reform and Export Enhancement
Act of 2000 Cuba has long
wanted good American corn, soybeans, rice, wheat, and other types of
U.S. agricultural products. Recently, for the first time since the United
States imposed a trade embargo against Cuba in the 1960s, the United
States is ready to cooperate. In
October 2000, President Clinton signed the Trade Sanctions Reform and
Export Enhancement Act (TSRA) of 2000, a bill to allow for the sale
of agricultural products to Cuba. This would have been unthinkable a decade ago,
but farmers and agricultural interests throughout the nation have agitated
for a relaxation of the embargo to develop a new foreign market for
their bounty. Farming regions have moved from being somewhat
uninterested in foreign affairs to regions that are aggressively internationalist,
largely because exports are seen as the salvation of the American farm.
Farmers are talking about the global economy.
Most of Cuba’s
food and grain imports have come from Europe and Asia. Switching to American suppliers saves 15 to
20 percent on shipping, a large part of the total cost of the commodities,
because the United States is so much closer. A freighter full of rice,
for example, may take 12 days to reach Cuba from France, while a ship
from Texas can make it in 3 days. Under the new
law, agricultural sales to Cuba must be made on a cash-only basis; American
banks and corporations are barred from extending credit to Cuba to pay
for their food imports. Even
with this restriction, the United States was predicted to grab approximately
10 percent of Cuba’s annual farm imports of between $750 million and
$1 billion within our first year of selling to them.
In actuality, U.S. food and agricultural product exports to Cuba
in 2002 totaled 22 percent of Cuba’s imports (U.S.-Cuba Trade and Economic
Council’s “Economic Eye on Cuba” October newsletter).
Companies that made sales under the new law even prior to the U.S. Food and Agribusiness Exhibition in Havana in September 2002 include: Archer Daniels Midland (IL), AJC International (GA), Cargill (MN), ConAgra, Farmland Industries (Kansas City, MO), Gold Kist (GA), Louis Dreyfus Corporation (U.S. subsidiary of French firm), Marsh Supermarkets, Northwest Fruit Exporters (AR), Perdue Farms (MD), Pilgrim's Pride, Radlo Foods (MA) with United Egg Producers of Atlanta (GA), Riceland Foods (Stuttgart, AR), Tyson Foods (AR), and others.
Prior to the Food and Agribusiness Exhibition, Cuba’s purchases for U.S. farm exports included goods from at least 25 states and represented a variety of different food and agricultural products. 2001 contracts amounted to about $36 million; between February 20 and March 31, 2002, an additional $37 million was contracted. The total market value of agricultural commodities purchased or contracted by the Cuban food importing agency, Alimport, from November 21, 2001 through March 31, 2002, from at least 15 U.S.-based companies equals about $73 million (US-Cuba Trade and Economic Council, March 31, 2002). U.S. Food and Agribusiness Exhibition in Havana,
Cuba, September 26-30, 2002 A major step
forward in agricultural sales to Cuba was taken with the successful
completion of the U.S. Food and Agribusiness Exhibition.
This exhibition featured 923 representatives from 288 exhibitors
(companies, trade organizations, and state departments of agriculture)
located in 33 states, the District of Columbia, and the Commonwealth
of Puerto Rico. Four Boeing-727
cargo aircraft delivered 154,000 pounds of cargo (dry, chilled, frozen,
livestock) to Cuba for the exhibition.
During and
immediately following the exhibition, more than 70 companies, located
in at least 23 states, signed contracts and agreements to deliver (on
a cash basis) food products and agricultural products valued at approximately
$92 million. Company representatives
continue to discuss additional export opportunities for 2003. Over 70 different products were contracted
for export to Cuba. A second
U.S. Food and Agribusiness Exhibition is planned for January 2004 in
Havana.
Here are some key
statistics that demonstrate the importance of the Cuban market:
A Citizen’s Responsibility The 34 states that have been the source of food and agricultural products
sold to Cuba have 423 votes of the 538 votes in the Electoral College;
a successful candidate for the presidency of the United States requires
270 votes. Within the U.S.
Congress, 83 percent of the 435 members of the U.S. House of Representatives
represent citizens of the 34 states, and 68 percent of the 100 members
of the U.S. Senate represent the citizens of these 34 states.
Your voice is important
and can make a difference! Become
involved now!
* Most information in
this paper came from the U.S.-Cuba Trade and Economic Council, a prime
source of information on doing business in Cuba. ECONOMIC EYE ON CUBA©, the weekly newsletter
of the Council, is provided to members of the U.S.-Cuba Trade and Economic Council.
It has a weekly readership estimated at more than 10,000 senior-level
executives of United States-based companies, senior-level executives
of non-United States-based companies, government officials (United States,
Republic of Cuba, and other countries), organizations, and newspaper,
magazine, television, and radio journalists from throughout the world.
The internet site of
the U.S.-Cuba Trade and Economic Council, http://www.cubatrade.org,
is accessed daily by companies, individuals, and journalists from throughout
the world, and by the representatives of governments of more than one
hundred and fifty countries. |