US Farmers Meet with Cubans over Trade Opportunities

An important U.S. – Cuba business conference, critical to opening markets for American farmers, took place in and around Havana, Cuba recently. Representatives from both countries participated.

Now that U.S. exporters are allowed to use USDA programs to promote exports to Cuba, the U.S. Agriculture Coalition for Cuba (USACC) and FocusCuba sponsored the event in an effort to assist American farmers in understanding all aspects of the demand for food in Cuba and also how to best to learn how to use FMA/MAP grant funds. Americans attending the event represented many others from Illinois, Kansas, Arkansas, Texas, Washington DC, New Jersey and Delaware.

The American group visited a series of markets where they learned how Cuban citizens purchase food through state rationing and a heavily subsidized distribution system. They also met with a Cuban farm Cooperative. They elect their own leadership and vote as a democracy on important decisions affecting them collectively. Farm Coops work with ACOPIO, a state agency of the Cuban government that purchases the agricultural products produced by the farmers for a fixed and guaranteed price. However, the group learned that food production in Cuba has declined this year, mostly because of a lack of seed and necessary agricultural equipment. Other problems also affect the ultimate availability of crops such as post-harvest losses resulting from a lack of quality storage facilities and spoilage.

During a visit with Alimport officials, the Cuban governmental agency responsible for food imports from the U.S., the group learned that 2019 imports from the U.S. will be about the same as that of 2018—about $220 million. However, the projections for 2020 are expected to be lower. The reasoning appears to be framed around concerns about the current political environment and tension between the two countries. Amid these concerns, Alimport continued to express great interest in purchasing more food from U.S. farmers. Reasons for such interest centers on three critical points:

• Quality of food from U.S. farmers is better than most other sources;
• Speed of delivery, ensuring no shrinkage caused by delays (U.S. products can arrive in Cuba in 10-14 days, while food from Vietnam and China take a minimum of 40-50 days, often arriving inedible because of spoilage.);
• Because of proximity to Cuba, shipping costs are dramatically less from the U.S. as opposed to that from Asia, thus lowering the expense to the Cubans.

Presentations were made by several Cuban officials and other executives responsible for importing and even setting agriculture policy. The group learned the current hardships on paying cash in-advance for the soy and chicken currently being purchase from U.S. sources. Because U.S. law requires to be paid in U.S. dollars and buy xanax in Cuba such doesn’t exist in Cuba, the Cubans must send Euros to Europe to have the money converted to U.S. dollars and then forwarded back to the U.S. Money exchanging of this sort is not only cumbersome, it is expensive, ultimately costing the Cubans to pay more money for the food. Allowing U.S. farmers to sell to the Cubans on credit and then allow standard bank transfers would alleviate this costly exercise.

One of the organizers of the conference is Paul Johnson, chair of the USACC, an organization that supports improved agriculture trade relations with the island.

“American farmers and ranchers will tell you that they need more markets for their products. Well, Cuba represents one such market. We are here in Cuba this week to underscore that message and bring awareness to members of the U.S. Congress as to what is available for the American AG industry.”

About Cuban Agriculture

It is estimated that around 70% of agriculture products grown on rural farms in Cuba are organic and completely free of all chemicals. They currently produce enough rice to fulfill about 50% of Cuba’s rice demands. They also produce 90% of the tropical fruit consumed in Cuba, including avocados and papaya. They could actually produce an even larger amount of these products and export to the U.S. if there was a market. Under normalized trade relations, Cuba could export these products to the U.S., allowing them to purchase more goods from U.S. farmers and ranchers including rice, soybeans, corn and wheat.

Another unique product of Cuba is the Habano, the name for Cuban cigars, known world-wide as the finest hand-rolled cigars in the world. Annually, Cuba produces and sells about four million premium cigars, brands like Cohiba, Montecristo, Partagas, etc., which accounts for about 70% of all premium cigars sold world-wide, with the exception of the United States. U.S. consumers are the largest market in the world for premium cigars and by contrast import about 350 million—25 times that of Cuban cigar production. If the U.S. were to simply allow the import of Cuban cigars, and they doubled their production, they would generate enough money to feed every man, woman and child in their country—11.5 million human beings— on an annual basis.

About Cuban Cooperatives

In very recent years, many new Cuban governmental reforms have affected the country’s agriculture industry. Those who choose to farm in Cuba are offered 26.84 hectares (67 acres) of land on a lease basis. If they add livestock production, they will be given an additional 26.80 hectares (for a total of 134 acres). Further, the government provides the farmers, seed, fertilizer, tools and machinery necessary to farm the land, at no cost. The farmers own are allowed to retain everything but the land. The farmers have formed 2,386 Cooperatives which are made up of families throughout the country. There are three types of cooperatives in Cuba today where approximately 450,000 people work. Interesting to be sure, the local Coops are run like a democracy, electing their own leaders and voting on key issues that affect their farming efforts.