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Agricultural Trade Mission to Cuba
July 26, 2016
Baton Rouge, La. (July 26, 2016) – Louisiana Department of Agriculture and Forestry (LDAF) Commissioner Mike Strain, D.V.M., recently returned from the island nation of Cuba, where he led a 94-person delegation promoting agricultural trade, economic development and tourism.
“We accomplished a great deal during our short visit to Cuba, including opening a dialog with Cuban officials and developing business relationships,” Strain said. “Also, we have a better understanding of what the country’s needs are – and how Louisiana can fulfill those needs – by visiting places such as an organic farm, tobacco and corn farm, farmers market, grocery store and the port in Mariel.
“Trade barriers between the U.S. and Cuba could be relaxed in the near future. It is critical to establish these important business relationships now in order to gain access to new market opportunities for our Louisiana agricultural producers when it does.”
Cuba actually imports 80 percent of its produce. Specifically, Cuba imports rice from Vietnam.
Strain said Cuba is in great need of products which Louisiana can provide. “Our ports are the largest in the U.S.; Louisiana exports $439 million worth of rice each year. Cuba imports $173 million of rice per year and on average consumes more than 177 pounds of rice annually, consuming the most rice per capita in the Western Hemisphere.”
Cuban government officials explained that with 11 million people in Cuba and an estimated three million in visitors, the country is in need of more food and supplies.
Cuban economist Jorge Mario Sanchez added, “When the Soviet Union collapsed, all supplies ended. The state of our agricultural industry includes old technology. That makes it difficult for us to keep up,” said Sanchez.
As explained by officials in meetings, the embargo is the “elephant in the room” and the challenge is normalization.
“Cuba imports almost $2 billion in agricultural products each year. The country needs commodities such as wheat, corn, pork, poultry, soybeans, petroleum and mechanical implements,” said Strain.
Currently, a major obstacle in doing business with Cuba requires third-party financing and issues with credit. Simply put, Cuba is cash-poor.
“Our products are the highest quality and safest that can be delivered at the most competitive price because of the short distance between Cuba and Louisiana,” said Strain.
“We have to get through some hurdles in Washington and get the Crawford Amendment passed so we can have the same trade rules as every other nation. We can improve their quality of life, but their economy has to grow. We’re here to be on a level playing field.”
Cuban officials are also reviewing products and technologies they can export to the United States if the trade embargo is lifted. Cuban economist C. Mario Pablo Estrada Garcia said, “We’ve worked on soybeans that are fungi-resistant. We think this will be a significant contribution from Cuba.”
William Marshall with Louisiana Economic Development (LED) said, “We can benefit the people of both Louisiana and Cuba through trade with Cuba. While we cannot import from Cuba under the U.S. embargo, there are some current opportunities to export some staple Louisiana products such as rice and poultry. Over the last decade, Louisiana has led all other states in exports to Cuba, and we hope the next 10 years will be equally productive.”
According to researchers at Tulane University, in 1958 a third of all trade passing through the Port of New Orleans was destined for Cuba. In addition to Louisiana’s close proximity to the island nation and cultural similarities between the two places, Louisiana agribusiness produces many products that are in demand in Cuba.
“One in five jobs is associated with trade in Louisiana, and the state has unsurpassed trade infrastructure and diverse agricultural products. We have the busiest port system in the world, and we are one of two states where all six Class 1 railroads converge,” added Marshall. The U.S. Chamber of Commerce Foundation has ranked Louisiana the No. 1 exporting state, according to LED.
Strain said several members of the group gained invaluable knowledge. In order to trade with Cuba, Louisiana must:
1) Continue to develop its relationship/interest in trade with Cuba
2) Identify which businesses can actually be developed in Cuba
3) Start requesting licenses to do business
While in Cuba, Strain presented Cuban government officials with Memoranda of Understanding (MOUs) for consideration. Signing of the MOUs would initiate trade agreements.
Joe Accardo, the executive director of the Ports Association of Louisiana, said, “We are in a prime position to export agricultural products, petrochemicals and the cruise industry.”
With 32 ports, Louisiana moves more than 500 million tons of cargo, much of it agricultural products added Accardo.
Members of the agricultural delegation included cattle ranchers, rice, soybean and sugarcane farmers.
Strain and Governor John Bel Edwards plan to visit Cuba in October to continue to develop these trade agreements.
***Photos are available here.