NAWG President McReynolds Testifies on Importance of Trade with Cuba

U.S. wheat producers and the industries that support them stand to gain up to $100 million in sales each year if trade and travel restrictions with Cuba are eased, National Association of Wheat Growers (NAWG) President Jerry McReynolds told Members of the House Agriculture Committee at a hearing Thursday.

U.S. wheat growers – who consistently produce some of the highest quality wheat in the world – have a distinct advantage in their proximity to the island nation, which cannot produce its own wheat or maintain large purchased stocks.  

However, this advantage is negated by ongoing trade restrictions that require cash payment through a third-party bank before shipment leaves U.S. ports and travel restrictions that make it hard for the island country to raise that cash and learn about the U.S. agricultural sales process.

“At a time when our economy needs every possible boost, and when President Obama has made a popular pledge to double U.S. exports, I would contend there is no better time than to re-examine why exactly we are being outcompeted in a market just 90 miles off our shore,” McReynolds, a wheat grower from Kansas, told the Members.  

McReynolds, who has traveled to Cuba on an agricultural educational mission and seen first-hand the country’s need for imported agricultural goods, also voiced strong support for H.R. 4645, the Travel Restriction Reform and Export Enhancement Act, introduced recently by Committee Chairman Collin Peterson (D-Minn.) and Rep. Jerry Moran (R-Kan.). NAWG and other supporters of the legislation believe the bill would be a catalyst of opportunity for significant new wheat sales to Cuba and a real economic boost in the U.S. heartland.

Cuba is the largest importer of wheat and wheat products in the Caribbean. Over the past three years, Cuba’s population of 11.4 million consumed on average 800,000 metric tons of wheat per year, and the nation’s grain consumption is increasing with population and income growth.

The wheat industry contends that the U.S. should have the lion’s share of the growing Cuban wheat market as it does in the rest of the Caribbean, where its market share averages about 85 percent. Instead, Cuba has turned to other suppliers and now purchases only about 38 percent of its needs from U.S. wheat growers. That gap represents about $100 million and can only be closed by lifting the restrictions to create a more normal trading relationship with Cuba.

For more on the Cuba trade issue, including McReynolds’ complete written testimony, please visit www.wheatworld.org/trade.

Source: NAWG - Posted by Kaci Switzer

Stallman Urges Congress to Ease Cuba Trade Restrictions

Because of the great market potential, the American Farm Bureau Federation has been an advocate for easing restrictions on exports to Cuba and is a supporter of H.R. 4645, sponsored by House Agriculture Chairman Collin Peterson (D-Minn.) and Rep. Jerry Moran (R-Kan.). The bill would reverse the restrictions on "payment of cash in advance," eliminate the third country bank requirement and lift the ban on travel. According to AFBF, passage of the legislation would make agriculture a strong player in the Cuban market and increase U.S. agricultural exports.

"We have seen the promise the market holds," said Stallman. "Unfortunately, because of restrictions on U.S exports to Cuba, U.S. farmers have not been able to benefit from the full potential of the market."

U.S. agriculture has seen significant growth, but has also experienced significant setbacks, since being allowed to trade with Cuba in 2000. On average the United States has exported roughly $320 million in agricultural products per year since 2000, reaching a high of almost $700 million in 2008. But, said Stallman, the United States is not viewed by Cuba as a reliable supplier due to our sales restrictions and the ability of the U.S. government to "alter those restrictions at a whim."

"Our competitors do not have the same obstacles in trading with Cuba we face," said Stallman. "Eliminating these restrictions will decrease the advantages the United States has given our competitors and restore the advantage to U.S. farmers. These actions will make it easier for Cuba to purchase U.S. commodities and, most importantly, will reduce the cost of purchasing our commodities."

The United States exports a variety of commodities to Cuba. Of those, grain and feed has consistently topped sales, reaching $369 million and making up more than half of agriculture’s total exports to the country in 2008. The U.S. also exports a wide range of other commodities to Cuba including oilseeds, meats and dairy.

"U.S. agriculture is not requesting the embargo be lifted, but rather for Congress to take the small step of lifting key restrictions that will increase U.S. agriculture’s competitiveness in the market," said Stallman. "Now is the time for Congress to take action to ease some of the current trade restrictions."

Source: American Farm Bureau Federation - Posted by Kaci Switzer