Specifically, Cuba’s ALIMPORT (the Cuban agency responsible for agricultural commodity imports) has asked to buy 40,000 metric tons of hard red winter wheat, 10,000 tons of wheat flour and 20,000 tons of rice.
While U.S. anti-Castro forces continue to fight against the sales, many in the agriculture sector are hoping they portend more to come. A new market opening up in such economically tough times is certainly agreeable to most – if not all – U.S. farmers.
While 40 years worth of bureaucratic red tape and regulatory mumbo-jumbo are being sifted through, the U.S. Wheat Association (USWA) is trying to assist, “by dealing with state treasuries and commerce. There are so many restrictions and regulations with this. Everyone we’ve dealt with in government has been very willing and helpful in getting these sales through, though,” says Dawn Forsythe, director of public affairs at the USWA.
At the annual Riceland meeting held on Nov. 15, Riceland CEO Richard Bell said one of the key highlights of the year was Riceland’s outreach effort to Cuba. Those efforts now appear to be paying off.
During the last 18 months, Riceland representatives made eight trips into Havana. “The goal has been to get down there, meet the people and get ready for the day when American rice can be shipped into the country,” says Bell.
“(On Nov. 14), we got a fax from the Cuban trade organization saying they’re ready to buy rice in the next 10 to 14 days,” he noted. “This isn’t because of the recent flooding there. The United States offered Cuba food to help them through that. Castro came back and said he wanted nothing free but he would buy from us.
“Of course, this is what we’ve been hoping he’d do – come out and say he’d willing to buy from us. Legislation passed last year has many hoops to jump through but we think it still allows us access to the Cuban market. Thus far, Castro has refused us access, though.”
But as of Nov. 14, Bell says Riceland was told the two governments had worked it out and “we could sell them 20,000 tons of rice. They want it within the next couple of weeks. I see this as a major breakthrough that we’ve been working towards for two years.”
While Bell says the sales aren’t necessarily due to Hurricane Michelle, both the USWA and USA Rice Federation call the transactions “humanitarian.” Regardless of semantics, the sales are seen as a potential break-through in U.S./Cuba relations.
“We are hopeful this initial sale will be approved, and that it will be the first step in resuming commercial rice trade with Cuba,” says USA Rice Chairman David Van Oss.
The USA Rice Federation says until 1961 Cuba was the top export market for U.S. rice and that trade sanctions since have cost American rice farmers an estimated $3 billion in lost sales. They further claim that a U.S. International Trade Commission report estimates that U.S. rice exports to Cuba could total nearly $60 million annually. If true, that would make Cuba one of America’s top markets.
“The U.S. rice industry continues to be in the forefront of trade sanctions reform so that U.S. rice farmers and other agricultural producers can sell their products to Cuba. Now we have a tangible development,” says USA Rice Federation President Ellen Terpstra. “Clearly there is a market for U.S. rice in Cuba, and it is in the interest of U.S. rice producers and millers who so critically need markets for their products for Capitol Hill to finish trade sanctions reform so that a commercial market can truly develop. Future Cuban purchases would be an important catalyst in making this happen.”
Jimmy Hoppe, a Louisiana rice producer who chairs the USA Rice Council and has traveled to Cuba for outreach, says the announced purchases “are a positive sign for U.S. rice producers and Cuban consumers.”
U.S. commodity groups still face a raft of hurdles.
“We have to take this a step at a time,” says Hoppe. “One of the most pressing needs is delivery protocols. We haven’t done business with Cuba in 40 years and there aren’t shipping protocols with them as there are with other countries we do business with.
Cuba needs to bring their inspectors to America to meet with USDA’s APHIS and GIPSA (Grain Inspection Packers and Stockyards Administration) to make sure that the protocols are done properly,” says Forsythe.
The U.S. develops such protocols with each trading partner in order to prevent diseases and pests from reaching our shores and vice versa.
“So the two countries must get together and decide what those provisions will be. With the blessings of e-mail and the speed of air travel, the protocols could be established within days. Or, if there are extensive misunderstandings or disagreements it could take a while. I don’t anticipate that happening. I think both sides are motivated to get this done,” says Forsythe.
As with Riceland, USWA officers and growers have traveled to Cuba three or four times over the last two years fostering relationships. They’ve also made a number of humanitarian donations.
The desire, says Forsythe, was to explore the market situation there. That was so when the time came, the USWA would know what type of wheat was needed and what type of assistance might be needed in milling it. Hard red winter wheat is much different than the French and Canadian wheat Cuba has been importing.
“We wanted to make sure that when they got U.S. wheat they’d be able to mill it appropriately. In fact, with this sale, we’ve offered to send our milling experts to Cuba to help with their mills,” says Forsythe.
Cuban wheat imports are estimated to have been about 1 million tons over the last marketing year with the European Union dominating wheat trade with Cuba. Since the announced sales of U.S. wheat and rice, the French especially are bemoaning the fact that U.S./Cuba walls are about to be reduced to rubble.
USWA doesn’t “have that sense yet. This is simply a humanitarian action. But it would be nice if those walls indeed would come down,” says Forsythe.