What is in this article?:
- Cuba trade holds promise for U.S. agricultural exports
- Top 35 trading partner
• Cuba relies on imports for 75 percent of its food.
• U.S. ag exports to Cuba include corn, poultry, soy and soy products, feeds, pork and wheat.
• The Trade Sanctions Reform and Export Enhancement Act of 2000, ‘created exceptions.’
PARR ROSSON, Texas AgriLife Extension economist, discusses trade with Cuba at the annual Texas Plant Protection Association conference in Bryan.
Top 35 trading partner
With the easing of restrictions, Cuba has become one of the U.S. top 35 trading partners. The U.S. supplies a significant percentage of Cuba’s food supply.
Rosson said Cuba is a decent trading partner. Terms of the trade reform require cash payment before delivery, for instance, so credit is not an issue.
Rosson said Cuba’s population, 11 million, has been stagnant or declining for the past few years, due to a lower birth rate and people leaving the country, “when they can sneak out.”
But Cuban trade also presents challenges. Wages are relatively low. “Most Cubans work for the government, for about $20 per month. But about 60 percent of the population is involved in the tourist industry — hotel workers, taxi drivers, etc. — and have access to tips.
Also, anything that has to do with food or agriculture is controlled by the government. “Cuba is a Communist country,” Rosson said.
Tourism, nickel and remittances make up the key economic foundation for Cuba. Canadians are the top country for the Cuban tourist industry. Europe accounts for the second largest tourist block and Latin America is next.
The nickel industry has been good at times, but prices have declined in recent years. Remittances, money sent back to Cuba from relatives who have moved to other countries, also add significantly to the Cuban economy, Rosson said.
Oil and gas exploration has not been successful so far.
No commercial flights are currently available from the U.S. to Cuba. Some charters are available and it is legal to fly to Mexico and then to Cuba. “Travel and business restrictions are typically imposed by the U.S., not Cuba,” Rosson said.
The U.S. has no embassy in Havana but does maintain a “U.S. interest section.”
He said farmers markets are popular but that grocery store shelves are sparsely stocked. Cubans receive food ration cards and can use those to buy from national stores, where prices are cheap, 1 cent per pound for rice compared to 35 cents per pound in commercial markets.
But when Cuban citizens use up their ration cards they have to buy the more expensive goods from the local economy.
The trade reform act has improved Cuban trade but not to the position that existed before the embargo. “Prior to the embargo, 25 percent of all the arable land in Cuba was owned by U.S. interests. The U.S. was THE major player in Cuba.”