Hurricane Michelle may turn out to be a key agent for change in Cuba/U.S. relations. A few weeks ago, the hurricane tore through Cuba with a vengeance, leaving behind destruction and a need for food. As a result, Cuba, which hasn't bought any U.S. wheat or rice in 40 years, has offered to buy a sizable shipment of the commodities. The U.S. government has agreed to the transactions.
Specifically, ALIMPORT (the Cuban agency responsible for agricultural commodity imports) has asked to buy 40,000 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,” said Dawn Forsythe, director of public affairs at the USWA.
At the annual Riceland meeting Nov. 15, Richard Bell, CEO, said one of the key highlights of the year was Riceland's efforts in Cuba, which 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, said Bell.
“(On Nov. 14), we received a fax from the Cuban trade organization saying it was ready to buy rice in the next 10 to 14 days. That wasn'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. Legislation passed last year has many hoops to jump through, but we think it allows us access to the Cuban market. Thus far, Castro has refused us access, though.”
Bell said 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.”
Although Bell said the sales aren't due to Hurricane Michelle, both USWA and USA Rice Federation call the transactions “humanitarian.” Regardless of semantics, the sales are seen as a potential breakthrough in U.S./Cuba relations.
“We hope this initial sale will be approved, and that it will be the first step in resuming commercial rice trade with Cuba,” said David Van Oss, USA Rice chairman.
Cuba was the top export market for U.S. rice until 1961. Trade sanctions since have cost American rice farmers an estimated $3 billion in lost sales, according to the USA Rice Federation.
The federation says the U.S. International Trade Commission estimates 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,” said Ellen Terpstra, USA Rice Federation president. “Clearly there is a market for U.S. rice in Cuba. It is in the interest of U.S. rice producers and millers — who so critically need markets for their products — for Capitol Hill to reform trade sanctions so a market can develop.”
Jimmy Hoppe, a Louisiana rice producer who chairs the USA Rice Council and has traveled to Cuba, said the announced purchases “are a positive sign for U.S. rice producers and Cuban consumers.”
Has a delivery date for the U.S. commodities been set?
“We have to take this a step at a time. 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 its inspectors to America to meet with USDA to make sure that the protocols are done properly,” said Forsythe.
The United States develops such protocols with each trading partner to prevent diseases and pests from reaching our shores and vice versa.
“The two countries must decide what those provisions will be. With e-mail and 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. I think both sides are motivated to get this done,” said Forsythe.