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Cuba Working Group goals and protecting farming operations

Cuba Working Group goals and protecting farming operations
A chat with Arkansas Rep. Rick Crawford
Jan 20, 2016 David Bennett | Delta Farm Press

In mid-December, a working group from the House announced it would begin
studying how best to deal with the emerging U.S./Cuba trade relationship.

In a letter sent to Speaker Paul Ryan, the 10 members of the Cuba
Working Group said, “Increasingly, the American people are indicating
their desire for a new, more pragmatic approach to Cuba. More people are
traveling from the U.S. to Cuba, more businesses are looking for
opportunity on the island, and more sectors are eager for trade. The
bi-partisan Cuba Working Group will promote a U.S.-Cuba policy that
reflects the interests of the American people in engagement with Cuba.”

On January 6, Arkansas Rep. Rick Crawford, a key member of the working
group, spoke with Delta Farm Press about his hopes for a new trading
partner and his frustration with fellow lawmakers over their approach to
agriculture and the farm bill. Among his comments:

“The idea is to put together a group of members who have an interest in
seeing a change take place while recognizing it will probably require
incremental steps. I don’t think we’re in a position to get the support
we need for a wholesale repeal of the Cuban embargo.

“I do think agriculture is a good starting point. The folks who’ve
signed on to work with us in the group see it in the same way. If
nothing else, food is a humanitarian concern and we can meet that need.

“The approach we’re taking is pretty well received. We don’t want to get
into a situation where we’re enabling the current (Castro) regime to
utilize our commodities as political leverage or tools. Historically
that’s happened to us with some regimes we’ve had problems with.

“Instead, we want to identify private sector entities that don’t have
the relationship with (Cuban government) agencies like Alimport. Then,
we can go to those entities and do two things. One is to provide
important staple commodities that Cubans want to avail themselves of.
That includes rice and poultry, which bodes particularly well for Arkansas.

Second is the economic factor. Cuba isn’t a huge market but is
significant – you’re talking about close to a $1 billion-a-year market
for Arkansas — and it’s in such close proximity to the United States.
The Cuban market would certainly be a welcome addition to our portfolio.

“We want to lift the cash-and-carry restriction that’s our current
policy. The Cubans like our rice and chicken, staple items in their diet.”

“Right now, Cuba is basically a cash-and-carry market. That means if
they can pay cash, we’ll sell them some commodities. But they aren’t
really in a position to do that and we’re prevented from engaging in any
financial transactions or underwriting any arrangements.

“We want that restriction lifted. As I said before, we’re in the process
of identifying the third party non-governmental entities. We know those
exist. Most countries doing trade with Cuba now – Canada, Brazil,
European nations – are doing business with them. That would get around
state-owned entities like Alimport and wouldn’t empower the regime to
utilize U.S. commodities as leverage over the people.

“We want to help the Cuban people. But we must understand they don’t
have the cash in hand to meet our boats at the port offloading. We have
to deal with Cuba like we do other countries. We have to deal with them
in good faith and make financial arrangements to make transactions come
to fruition.”

Regional viewpoints

You’re the only Mid-Southerner in the Cuba Working Group. From the South
there is a representative from Florida and another from Texas. What
about regional differences between group members?

“I think we’ll see more (lawmakers) become involved in this effort.
Right now, there is a geographic disparity to some degree.

“You mentioned Florida. I’m encouraged that a member from that state has
joined us. In south Florida there is a real sensitivity to this and you
can understand and respect that. The Cuban expat community there was
exiled or forced from their country and they have a lot of lingering
resentment towards (the Castro) regime. Anything that points to that and
they’re typically a ‘no.’

“That’s beginning to soften and there are a couple of reasons to
attribute. One is our approach to go around the regime – and they see
that. The second thing is the reality that the regime may not stand for
much longer. So, we’re in a waiting game and they’re beginning to see
the opportunities (post-Castro). If we want begin to build incrementally
towards that future now, we’ll be well positioned to help later.

“As for Texas, it’s part of the Rice Belt. (Texas Rep. Ted Poe) being
from there helps us.

“A trade deal with Cuba would greatly benefit our rice industry – and I
basically represent half the U.S. crop.

“Arkansas is also third in poultry production. Poultry is a huge
industry across a large swath of the geographic U.S. That leads me to
believe that over time, particularly in rural areas with big poultry
production – North Carolina, Georgia, Alabama, Texas — there will be a
greater uptake and enthusiasm for a deal.

“It’ll just take a bit of time to make (lawmakers) aware of this. A
couple of things are already in the works. One is a Congressional
delegation and the other is a delegation of Arkansas ag industry folks
that are looking to travel to Cuba and get eyes on the situation.
Hopefully that will all happen in the next two or three months. So,
we’re moving fairly quickly.”

Farm bill, budget process

On the recent budget process and farm bill programs being up for
discussion among some lawmakers…

“I’m very frustrated with that. Under the Budget Control Act the
Agriculture Committee was the only authorizing committee in the House
that met our prescribed number. We’ve done our work and done it within
the act, we’re compliant.

“However, time and again, the farm bill is attacked. It isn’t a good
idea to keep opening up the farm bill. We have to fight for it every
year – and we will until we reauthorize the next one. All hands must be
on deck.

“We dodged a bullet with crop insurance. That was able to be resolved
within the highway bill. But when these kinds of things are done it
makes it much more difficult for us in the context of the next
reauthorization of the farm bill.

“Somehow, people have this idea that they’re going after ‘big ag.’ What
they’re really doing is creating ‘big ag.’ Track with me for a minute.
When they tinker with things like Adjusted Gross Income and managerial
requirements and the like, they’re making it more and more difficult for
small operators to cash flow and be compliant. When that happens,
smaller operators fall by the wayside.”

On the consequences of that happening…

“Over the Christmas break, I received messages from exactly those types
of operators in my district. If you take them out, if you exclude them
from receiving benefits or subsidies, you take them out of the actuary base.

“Well, consider crop insurance. A smaller actuary base – which is what
reinsurance rates are based on – means the cost will be run up so high
that the smaller operators can’t afford it.

“So, you may think you’re being punitive to the large operators while,
in fact, the net effect means the smaller operator is forced out. That,
in turn, leads to more consolidation and makes the big operators even
larger.

“This thing is 180 degrees out of place. We – and I’m not talking about
the House Agriculture Committee but the entire institution – must
rethink our approach. The House of Representatives has very little
understanding or regard for what it takes to feed and clothe 300 million
people at home and compete in the global market.

“We’re all worried about ‘too big to fail.’ Well, I’m more concerned
with ‘too small to succeed.’ What we need to focus on are smaller
operators who are being squeezed to the point of being unable to cash-flow.

“This doesn’t bode well for smaller and younger operators that aren’t
well-capitalized. I think loan officers are going to be under pressure.
I don’t want to be negative but we may be in the calm before the storm.
There’s quite a bit of tension in the air.”

Source: Cuba Working Group goals and protecting farming operations |
Rice content from Delta Farm Press –
deltafarmpress.com/rice/cuba-working-group-goals-and-protecting-farming-operations

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