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The push is on to open Cuban market for US agriculture

Senate Minority Whip Dick Durbin, D-Ill., said by lowering the embargo with Cuba, U.S. farmers could easily compete because of lower shipping costs.

The voices that support normalizing trade with Cuba are getting louder and gaining in numbers, especially among U.S. agriculture interests.

Earlier this month, Devry Boughner Vorwerk, Vice President at Cargill and Chair of the U.S. Agriculture Coalition for Cuba (USACC), said with 2014 being called one of the worst years for U.S. exports to Cuba in the last decade, normalizing trade relations and easing the existing embargo is a necessary step to protect the interests of U.S. agriculture.

Cargill is one of about 30 other U.S. agriculture groups calling for Congress to reconsider a 52-year embargo the United States first imposed against Cuba in the early 1960s. The Coalition is pushing lawmakers to open Cuba to U.S. trade, a measure they argue is not only in the best interest of agriculture but a good way to encourage the people of Cuba to embrace a progressive change.

President Obama announced in December an initiative to ease financial regulations that have hampered U.S. agricultural sales to Cuba, as well as his intent to work with Congress to end the embargo first imposed as a result of the island's Communist revolution. Since then many members of Congress, especially the Republican leadership, has said they do not favor the President's move to open dialogue with Cuban officials and say there is already an agreement in place that allows for limited agriculture trade.

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But at the International Dairy Foods Association meeting held last week, IDFA's president and CEO, Andrei Mikhalevsky, said his group is joining forces with the USACC in an effort to expand that limited trade agreement to include more types of commodities and agricultural products produced by U.S. producers.

Since mid-2000 the U. S. has allowed exemptions to the embargo for limited agricultural sales including rice, corn, soybeans, pork and poultry products. But Mikhalevsky said the U.S. dairy industry could benefit by expanding that list of exemptions—or by dropping the embargo altogether. He says Cuba relies heavily on milk powder and other dairy products imported from New Zealand, and because of transportation costs from the Far East, U.S. dairies could easily compete.

Trade advantage

"The IDFA is very supportive of opening Cuba up as a market, primarily because it is a good market," Mikhalevsky told reporters at the IDFA meeting.

Senate Minority Whip Dick Durbin, D-Ill., who traveled to Cuba recently to explore opportunities for U.S. producers, said by lowering the embargo with Cuba, U.S. farmers could easily compete because of lower shipping costs.

"We learned that powdered milk travels half way around the world to reach Cuba and there is an ample supply here in the United States," Durbin commented from the Senate floor last month.

Secretary of Agriculture Tom Vilsack said the White House is dedicated to engaging Congress "in an honest and serious debate on what we can do to promote positive change" in Cuba and indicated U.S. agriculture would be the first to benefit if the embargo were lifted.

The USACC said the first step needed to put U.S. farm and ranch producers in position to benefit from open trade with Cuba is to ease a U.S. government ban on providing credit to Cuba. Currently, under guidelines of the 2000 law that allow agricultural sales exemptions, Cuban buyers must pay for the goods at the time they are ordered. President Obama's Cuban initiative would change that to require payment at time of delivery.

While proponents of normalized trade relations with Cuba say the President's changes would be a step in the right direction, they argue that extending credit opportunities between financial institutions in both countries would create a better environment for open trade.

While opposition to normalized relations still runs high among many lawmakers, there has been evidence of faltering support for the embargo. The National Farmers Union, which often voices their opposition to trade agreements because of possible negative impacts on smaller farmers, say they now support the opening of trade markets with Cuba.

A growing number of Republican lawmakers are also promoting an ease of tensions between the U.S. Government and Cuba. Sen. Jerry Moran, R-Kan., one of the authors of the 2000 law that authorized limited exemptions of ag sales to Cuba, says that the island nation is already receiving food imports from other parts of the world. He suggested the embargo is failing in that respect and may no longer be effective when it comes to preventing the export of U.S. food exports to the island.

USACC members, supporting lobbyists and other ag groups say they know the road to opening the Cuban market represents a challenge, especially after mid-term elections left both the House and Senate in control of Republican leaders who traditionally have supported the Cuban embargo.

But they say they are determined to continue their efforts and to turn up the heat in order to increase markets for U.S. producers, a measure they say is and will remain important in years to come.

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