By Jessica Domel
News Editor
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.”
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