On Dec. 16, President Obama signed into law the Consolidated Appropriations Act for 2010. The act includes language offered by North Dakota Sen. Byron Dorgan to suspend for fiscal 2010 the requirement that agricultural exports to Cuba must be paid for before they leave U.S. ports.
(For more, see Bill should help exports to Cuba).
This change will put agricultural exports to Cuba on a footing similar to other global market cash sales, requiring payment when the title of the shipment changes hands.
Specifically, section 619 of the act requires that during fiscal 2010 the term “payment of cash in advance” in relation to agricultural sales to Cuba shall be interpreted as payment before the transfer of title to, and control of, the exported items to the Cuban purchaser. This will reverse the current flawed U.S. policy that has hampered the ability of U.S. agriculture to supply the Cuban people with food.
In 2004, U.S. rice sales to Cuba topped more than $64 million. In 2005, the Bush administration imposed restrictions on U.S. agricultural sales to Cuba through a revised “interpretation” of the “cash in advance” requirements.
The Cuban’s confidence in the ability of U.S. exporters to meet their export commitments was justifiably shaken by this unwarranted government intervention in the market. As a result, U.S. rice sales to Cuba have constantly slid downwards since 2005 — to zero exports in 2009.
It is a sad reminder that it is U.S. farmers — particularly rice farmers — that bear much of the economic burden of our failed, 50-year-old Cuba policy.
The US Rice Producers Association has been fighting to enact this cash in advance clarification since 2005. Several times during George W. Bush’s presidency the language was included in appropriations bills, only to “evaporate” in conference at the insistence of the White House.
This victory shows that opinion in Congress and in the White House has swung around to favor the U.S. farmer over the narrow opposition in Congress to feeding the Cuban people.
In addition, public opinion polls show that about 70 percent of the American people support the freedom of the American people to travel to Cuba. Even a solid majority of Cuban-Americans support the freedom to travel to Cuba.
USRPA and other farm and export groups continue to work to garner support for legislation expected to be introduced in 2010 by Minnesota Rep. Collin Peterson, House Agriculture Committee chairman, Kansas Rep. Jerry Moran, Connecticut Rep. Rosa DeLauro, Agriculture Appropriations chair, and Missouri Rep. Jo Ann Emerson to make the cash in advance change permanent and to expand agricultural trade and travel to Cuba.
U.S. Agricultural producers — particularly rice producers — are well-positioned to benefit from additional sales to Cuba. Cuban consumers prefer U.S. rice. U.S. suppliers can reach the three major Cuban ports in a matter of one day or less. This compares to weeks on the water from countries like Vietnam, from which Cuba now buys much of its rice.
In addition to permanently addressing the cash in advance rule, the Peterson/Moran legislation would streamline agricultural sales, enhance confidence in U.S. sellers, and increase the Cuban’s buying power by doing the following:
(1) Eliminate the need to go through banks in other countries to conduct agricultural trades, along with the accompanying fees those banks charge (direct payment provision).
(2) Allow U.S. citizens to travel to Cuba, reducing the bureaucratic red tape currently required for agricultural associations, agribusinesses, and others to make agricultural sales in the country and creating increased demand for agricultural exports to feed the increased number of American visitors.
Put simply, passage of this legislation will mean millions of dollars in additional rice and other agricultural exports for the United States. USRPA has been at the forefront of opening agriculture trade to Cuba since the late 1990s. We will continue to fight for the right of U.S. rice farmers to help feed the Cuban people.
Fred Clark is a lobbyist in Washington, D.C., for the US Rice Producers Association.