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  • Unconventional Ag

Farm Groups Still Face Hurdles in Opening Cuban Market

In the wake of President Obama’s recent diplomatic advances made with Cuba, U.S. farming groups re-enforced their opposition to the trade embargo with the country, and pushed for a normalization of trade relations, stating that U.S. farmers were losing hundreds of millions of dollars in missed sales opportunities.

In the long run, the U.S. is in a great position to gain a major share of Cuba’s agricultural imports market, given its geographical advantage over the EU and Vietnam, two of the country’s major suppliers of rice. However, the process of liberating trade relations with Cuba will not prove to be as simple as lifting the 60-year long embargo.

If and when the U.S. Congress acts to eliminate the embargo, Cuba’s import infrastructure and systems will pose a challenge to U.S. farmers according to Michael Scuse, undersecretary of USDA's Farm and Foreign Agricultural Service.

All U.S. farm sales are currently channeled through the Cuban state-run corporation, Alimport – the exclusive acting body that makes buying decisions, negotiates purchases, arranges payments, takes control of goods at Cuban ports, and manages the distribution process on behalf of the Cuban government, while other countries have established alternative trading networks.

Many, including Juan Carlos Hidalgo, Latin American policy analyst at the libertarian Cato Institute, believe that major short term economic gains are not to be had upon the lifting of the embargo, because the Cuban government will likely immediately increase economic restrictions upon the U.S.

"I really don't see Raul Castro or the Cuban government embracing free trade policies anytime soon," Mr. Hidalgo tells World-Grain.

Some major U.S. exporters such as Arkansas-based Riceland Foods states that even though the U.S. was the largest supplier to rice to Cuba prior to the embargo, many Cuban importers are not indicating great interest in resuming purchases unless all trade and diplomatic solutions are competed through the ultimate lifting of the full embargo and all tourism and trade restrictions between the two countries.

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