Texas Agriculture May 20, 2016 : Page 14

Potential in Cuba 14 “To the extent that it would com-pete with, let’s say Texas companies that have put operations into Mex-ico and are now shipping produce travel restrictions to Cuba. This tor.” By Jessica Domel back here, that could overlap in month, the first cruise ship bound News Editor If the embargo is lifted, demand competition,” Rosson said. “I don’t As the icy relationship between for Cuba since the embargo set sail for U.S. goods may grow in other see that being a huge impact over-the U.S. and Cuba continues to from Florida. sectors, but it may not have a huge all.” With more Americans headed to impact on Texas agriculture. thaw, many in the agricultural com-Cuban soil would need a lot of munity look to the island nation Cuba, experts believe there will be “For certain sectors like rice, work to make it highly productive. with renewed hope. The nation’s location in a sub-Although the 1962 embargo tropical and tropical zone with remains in place, President potential for severe weather, Obama has eased travel and fi-insect infestation, fungus and nancial restrictions. He and Cu-disease would also affect tem-ban President Raul Castro have perate zone crops like rice, also publically announced their wheat and corn, Rosson said. hope the 1962 embargo will soon “I just don’t see Cuba be-be lifted. ing a big competitor in those The ban on trade cannot be crops anytime soon,” he said. erased with the swoosh of a pen, “I don’t think the agronomics but exemptions allow Texas and or economics would support American companies to export that.” agricultural goods to the island American rice used to play nation just 90 miles off the U.S. a large role in Cuba, but Ros-coast. son reports countries like “We’ve been active in the Vietnam have pushed most market nationally and from a U.S. rice out of the market. Texas standpoint for 15 years,” “I think 2008 was the last Dr. C. Parr Rosson III, professor year we exported any rice to and head of the Department of Cuba,” Rosson said. “Since Agricultural Economics at Tex-then, we’ve done very little, as A&M University, said. “Since almost no business at all in about 2007-2008, there’s been a Former Texas Farm Bureau President Kenneth Dierschke (right) and former Texas terms of rice. The potential large decline in our exports to Agriculture Commissioner Todd Staples (middle) visited Cuba in 2008 during a state-is there. Cuba is a large con-Cuba. Because of the initiatives sponsored trip. sumer of rice. It’s one of the in other areas, I think people highest per capita consump-want to try to rekindle our export increased demand for U.S. products possibly wheat and corn, it could be tion levels throughout the Carib-interests and begin to move prod-at travel destinations. a plus simply because of the prox-bean region.” “The opportunities for food sales imity of that market, as well as uct back into the marketplace.” Although the potential is there Additional cash flow in the Cu-appear to be pretty strong at this poultry and possibly beef over the for both Texas and American rice ban market has also sparked inter-point,” Rosson said. growers, the problem is dealing longer term,” Rosson said. The export of food, beverages est. When President Obama eased In terms of import competition with competition that has been financial restrictions in 2014, it and agricultural and forestry prod-from Cuba, if the embargo is lifted, pretty formidable over the last sev-enabled Cuban Americans to send ucts to Cuba is allowed through the it could take a while to feel the im-en or eight years, Rosson said. unlimited amounts of money to Trade Sanctions Reform and Ex-pact in the U.S. Additional markets for U.S. port Enhancement Act, which was family and friends living in Cuba. “Maybe in 25 years, with enough goods may continue to grow in the “That to me is a huge direct eco-passed by Congress in 2000. investment, there could be competi-coming years as President Obama Since 2012, the U.S. has export-tion in sugar, for example,” Rosson and future presidents use executive nomic benefit not only to Cuba, but also to the potential for U.S. ed corn, soybeans, wheat, sweeten-said. “In terms of the fresh produce authority to lift restrictions. exports. Roughly 60 percent of Cu-ers, confectionery products, breads industry, I think our domestic busi-According to the Council on For-ban households have access to that and sauces, as well as some poultry ness here is competitive when it’s in eign Relations, the full lifting of the money,” Rosson said. “That goes and beef to Cuba. embargo is unlikely in the near season.” “The potential is there,” Rosson directly to those households, and Eventually, Cuba’s produce in-future due to strong opposition in they can turn around and spend it said. “What’s important to remem-dustry could fill in gaps when Congress. Differences of opinion on ber is most of those products were American crops are not in season, human rights and democracy may to buy products.” President Obama has also eased going into the tourist or travel sec-according to Rosson. also play a role. M AY 20 , 2016

Potential in Cuba

Jessica Domel

As the icy relationship between the U.S. and Cuba continues to thaw, many in the agricultural community look to the island nation with renewed hope.

Although the 1962 embargo remains in place, President Obama has eased travel and financial restrictions. He and Cuban President Raul Castro have also publically announced their hope the 1962 embargo will soon be lifted.

The ban on trade cannot be erased with the swoosh of a pen, but exemptions allow Texas and American companies to export agricultural goods to the island nation just 90 miles off the U.S. coast.

“We’ve been active in the market nationally and from a Texas standpoint for 15 years,” Dr. C. Parr Rosson III, professor and head of the Department of Agricultural Economics at Texas A&M University, said. “Since about 2007-2008, there’s been a large decline in our exports to Cuba. Because of the initiatives in other areas, I think people want to try to rekindle our export interests and begin to move product back into the marketplace.”

Additional cash flow in the Cuban market has also sparked interest. When President Obama eased financial restrictions in 2014, it enabled Cuban Americans to send unlimited amounts of money to family and friends living in Cuba.

“That to me is a huge direct economic benefit not only to Cuba, but also to the potential for U.S. exports. Roughly 60 percent of Cuban households have access to that money,” Rosson said. “That goes directly to those households, and they can turn around and spend it to buy products.”

President Obama has also eased travel restrictions to Cuba. This month, the first cruise ship bound for Cuba since the embargo set sail from Florida.

With more Americans headed to Cuba, experts believe there will be increased demand for U.S. products at travel destinations.

“The opportunities for food sales appear to be pretty strong at this point,” Rosson said.

The export of food, beverages and agricultural and forestry products to Cuba is allowed through the Trade Sanctions Reform and Export Enhancement Act, which was passed by Congress in 2000.

Since 2012, the U.S. has exported corn, soybeans, wheat, sweeteners, confectionery products, breads and sauces, as well as some poultry and beef to Cuba.

“The potential is there,” Rosson said. “What’s important to remember is most of those products were going into the tourist or travel sector"

If the embargo is lifted, demand for U.S. goods may grow in other sectors, but it may not have a huge impact on Texas agriculture.

“For certain sectors like rice, possibly wheat and corn, it could be a plus simply because of the proximity of that market, as well as poultry and possibly beef over the longer term,” Rosson said.

In terms of import competition from Cuba, if the embargo is lifted, it could take a while to feel the impact in the U.S.

“Maybe in 25 years, with enough investment, there could be competition in sugar, for example,” Rosson said. “In terms of the fresh produce industry, I think our domestic business here is competitive when it’s in season.”

Eventually, Cuba’s produce industry could fill in gaps when American crops are not in season, according to Rosson.

“To the extent that it would compete with, let’s say Texas companies that have put operations into Mexico and are now shipping produce back here, that could overlap in competition,” Rosson said. “I don’t see that being a huge impact overall.”

Cuban soil would need a lot of work to make it highly productive. The nation’s location in a subtropical and tropical zone with potential for severe weather, insect infestation, fungus and disease would also affect temperate zone crops like rice, wheat and corn, Rosson said.

“I just don’t see Cuba being a big competitor in those crops anytime soon,” he said. “I don’t think the agronomics or economics would support that.”

American rice used to play a large role in Cuba, but Rosson reports countries like Vietnam have pushed most U.S. rice out of the market.

“I think 2008 was the last year we exported any rice to Cuba,” Rosson said. “Since then, we’ve done very little, almost no business at all in terms of rice. The potential is there. Cuba is a large consumer of rice. It’s one of the highest per capita consumption levels throughout the Caribbean region.”

Although the potential is there for both Texas and American rice growers, the problem is dealing with competition that has been pretty formidable over the last seven or eight years, Rosson said.

Additional markets for U.S. goods may continue to grow in the coming years as President Obama and future presidents use executive authority to lift restrictions.

According to the Council on Foreign Relations, the full lifting of the embargo is unlikely in the near future due to strong opposition in Congress. Differences of opinion on human rights and democracy may also play a role.

Read the full article at http://texasagriculture.texasfarmbureau.org/article/Potential+in+Cuba/2485197/302841/article.html.

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