Cuba's agriculture minister held a bag of Stoddard County, Mo., rice to the light, admiring its exceptional qualities — much like a fine cigar aficionado might regard a Cuban Montecristo.
The bag of rice was the first agricultural product from the United States to arrive in Havana in over 40 years although U.S. Rep. Jo Ann Emerson, R-Mo., brought only enough to entice her Cuban hosts. Much more could come in the future.
The courting of Cuba as a potential export market for around 400,000 tons of U.S. rice was made possible by the Trade Sanctions Reform Export Enhancement Act (TSREEA), passed last year. The law aimed to lift unilateral food and medicine sanctions by eliminating onerous bureaucratic hurdles.
There are still some problems to be worked out before large shipments of U.S. rice can leave for the Caribbean nation, not the least of which are the emotional barriers to trade between the two estranged countries.
But it certainly does help that Cuba likes U.S. rice almost as much as North Americans like Cuban cigars. That's what Emerson found out when she passed out bags of rice from Sonny Martin's farm in Dexter, Mo., to Cuban officials.
“The agriculture minister held the rice up to the light, cut it in half and tasted it and proclaimed it perfect, just what they wanted, much better than the sticky rice from Southeast Asia,” Emerson said.
Emerson was part of a delegation (which included two other congressional leaders, representatives of the USA Rice Federation and several Mid-South rice producers) that also met with Cuban leader Fidel Castro, who treated the group to a four-and-a-half hour dinner one evening.
Emerson assured Castro that U.S. rice producers could be competitive with China, Thailand and Vietnam, countries that currently provide Cuba's rice import needs.
“Transportation alone would save Cuba a lot of money,” said Emerson. “Plus we can send smaller ships to smaller ports and save a lot of the expense of transporting the rice within the country.”
But several hurdles remain. Under current law, American banks are not allowed to finance the sale of rice to Cuba. The sales can be financed by offshore banks, but Emerson still thinks the law is unfair.
“The Cubans raised the point — and it's good one — that if we allow our banks to handle transactions with North Korea and China, we ought to be doing it for Cuba,” Emerson said. “While Cuba is still a totalitarian regime and I have a lot of problems with that, they are allowing a small bit of private enterprise and a lot of joint ventures with other countries.”
The TSREEA also waives a clause in the Trading with the Enemies Act which prohibits shippers from returning to a U.S. port for six months after they deliver goods to Cuba — if those shipments are agricultural or medicinal goods.
The new law also requires that U.S. shippers obtain licensing before trading with Cuba, which is 90 miles south of Key West, Fla. This doesn't appear to be too onerous since Crowley Shipping Line, in Jacksonville, Fla., already has such a license.
Emerson added that the current administration has been slow in developing regulations for the TSREEA. “They were supposed to be done in February.”
In addition, “I think that Cuba feels offended that we would not do reciprocal trade,” Emerson said. “I understand that. With other countries, they can use tobacco or sugar as barter. Obviously, with our sugar situation here, that wouldn't be a barter item.
“We have to be patient,” Emerson said. “We have a lot work left to do here. But I am a very impatient person. And there are so many opportunities here.”
Emerson is currently planning a second trip to Cuba this coming September. “I hope we can work our way through these things. We really need to start building relationships and trust. But we have to remember that it's been so long since we've had one.”
Other members of the delegation included David Van Oss, chairman of the USA Rice Federation, Arkansas rice producer John King III, Rep. George Nethercutt, R-Wash., and Rep. William Delahunt, D-Mass.
“Our objective in Havana was to reopen the Cuban market for American rice farmers,” Van Oss said. “We made a strong case and they were receptive. Now we need to push ahead to secure sales for U.S. rice growers.”
“It hasn't happened yet, but I am more optimistic than I was two days ago,” Nethercutt added.
Cuba will continue to be a major priority for the U.S. Rice Producers Association, too, according to Dwight Roberts, president and CEO of the organization. “For rice farming and the milling infrastructure to survive in the United States, we must get milled rice into Cuba as well as other sanctioned markets, such as Iran and Iraq, otherwise, the export outlook is not very bright.”
Until 1962, Cuba was the top export market for U.S. rice. Trade sanctions imposed that year have cost American rice producers an estimated $3 billion. A recent U.S. International Trade Commission report estimates that U.S. rice exports to Cuba could total nearly $60 million annually.
The United States broke off relations with Cuba on Jan. 3, 1961, after Castro confiscated U.S. holdings in banks and industries and seized large U.S. landholdings, turning them into collective farms. Cuba then forged an alliance with the former Soviet Union. Trade partners over the last 40 years have included countries of the former Soviet Union, Canada, Mexico, Japan, Spain, Argentina, Italy and China.
The fall of the Soviet Union has forced the country to make economic and political changes, noted Emerson. “They realize now that they cannot depend on themselves solely. They must develop relationships with other countries that are not necessarily totalitarian regimes. I think in the next five years, we will see radical change in that country.”