Normalization of relations with Cuba is going to happen, says Mike Espy, former Secretary of Agriculture and Mississippi congressman. “We don’t know when,” he says, but “I believe things are going to open up relatively soon,” and those wanting to do business there should be laying the groundwork.
Now an attorney/consultant in Mississippi, Espy has a long history with Cuba, having first gone there 40 years ago on a special student visa to study politics at Havana University. He’s returned several times since, most recently in March when he led a 92-member agriculture delegation to study opportunities for U.S. farm commodities, the first such U.S. group to visit since President Obama’s announcement in January that the two nations would work to end the embargo in place for more than half a century.
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“I saw a new, resilient Cuba,” Espy says, but there remain many challenges to doing business there, he told a recent meeting hosted by the World Trade Center Mississippi at Biloxi. “I think there is a significant opportunity” for agricultural trade with Cuba when the embargo is finally lifted.
“They import 300,000 tons of rice annually from Vietnam — 4,000 miles away. Let’s have them import it from the Port of Gulfport or the Port of New Orleans and buy it from Mississippi, Louisiana, Arkansas, and Missouri rice farmers.”
While the U.S. already trades with Cuba on “a very small, very limited basis,” Espy notes, “it’s nothing like it will be when the embargo is lifted.” The last U.S. rice sold to Cuba was in 2007. Frozen chicken is now their largest U.S. import. The U.S. exported 57,000 metric tons of soybeans to Cuba in 2013-14; it’s estimated that could nearly triple after the embargo is lifted.
But there are hurdles to overcome, he points out. Now, sales are cash only. “Before a ship ever leaves a U.S. port, the goods must be paid for by Cubans in cash up front — and Cubans don’t have a lot of cash,” Espy says. Credit measures must be established so they can obtain loans to finance purchases of goods and services.
The Cuban population is predominantly poor, with an average monthly income of about $20, and Espy says, “There aren’t a lot of consumables they can buy with that kind of income.” The most immediate opportunities will be food products, raw agricultural commodities, and medical supplies/pharmaceuticals.
But for those wishing to do business with Cuba, his advice: “Don’t wait. Go there. Talk to farmers, business people. Establish relationships, become comfortable with doing business. Learn what they need. Become familiar with regulations.”
World Trade Center Mississippi will conduct an educational research mission to Cuba later this year.