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Texas ready to feed Cuba’s tourists

Texas ready to feed Cuba’s tourists
Texas farmers see strong opportunities in Cuba if negotiations lead to
an easing of financing restrictions
By Lynn Brezosky, San Antonio Express-NewsMarch 11, 2016 Updated: March
11, 2016 10:33pm

Cuba’s once illustrious riviera may be a bit dilapidated after more than
a half century of communist rule and the battering of U.S. trade sanctions.

But tourists from Canada and Europe are loving it, visiting in record
numbers before the island is overrun by Americans and its era of being
quaint and inexpensive ends.

Cuba wants to keep the tourists coming. That means the island nation
with its Soviet-era farm equipment needs to import more food.

Not far away are Texas farmers and ranchers happy to oblige. According
to Texas A&M University’s Center for North American Studies, the Lone
Star State stands to export upwards of $18 million a year to Cuba in
beef, wheat, rice and other products.

Which is why the producers are keeping a close watch on trade talks that
could undo restrictions that threaten to close off access to the Cuban
market. They’re looking for contacts, in the meantime, such as mills to
buy their wheat and conduits to the hotels and restaurants that want
their beef.

The Texas Department of Agriculture last month led the second trade
mission to Cuba over the last 10 months, taking a delegation of state
representatives, economists, and producers to meet with Cuban entities
like ALIMPORT, the government agency in charge of U.S. agricultural
exports, and the Cuban Cooperative Board of Directors representing
hundreds of Cuban farmers.

“The message taken away from the meetings is desire by the Cubans for
the U.S. to rescind the embargo and adopt ‘normalization’ for trade with
Cuba,” Texas Wheat Producers Association President Ben Scholz said in an
email.

It’s not just Texas farmers who have an interest in loosened trade
restrictions.

U.S. Agriculture Secretary Tom Vilsack on Friday announced he’d be
joining President Barack Obama this month when he becomes the first
sitting U.S. president to visit the island in nearly 90 years. Vilsack
also traveled there in November, meeting with Cuba’s minister of
agriculture as well as farmers, producers and operators of agricultural
cooperatives and markets.

The U.S. began imposing sanctions on Cuba after Fidel Castro took power
in 1959 and nationalized more than $1 billion in U.S.-owned assets,
including cattle and land owned by South Texas’ famed King Ranch. U.S.
agricultural and food exports have largely been exempted from the
embargo since 2001, when Hurricane Michelle devastated the island and
Castro refused U.S. relief offers but agreed to buy U.S. food.

U.S. agricultural exports peaked between 2005 and 2009, then declined
amid financing restrictions.

“What the United States did was redefine some of the shipping terms that
made our products more expensive for the Cubans,” said Parr Rosson, head
of Texas A&M’s agricultural economics department. “And that began to
start us on somewhat of a downturn.”

One such change was the cash payment rule, which required cash in
advance of U.S. shipments, a tall order for a poor country.

Cubans began to diversify, taking a hard look at suppliers like Canada,
France, Brazil, Thailand and Vietnam that were able to sell to Cuba on
easy credit terms.

“It may take a little longer to get it there and the quality may not be
what they’re looking for, but it is an available product and some of our
products have sort of fallen out of favor,” Rosson said.

In December 2014, Obama and Cuban President Raúl Castro announced they
would break the Cold War deadlock, which has already resulted in embassy
openings, loosened travel restrictions, pending commercial air traffic
and a liberalization that made it legal for U.S. banks to set up systems
to allow use of U.S.-issued credit cards there.

The resumption of diplomatic relations is considered a prelude to
lifting the embargo.

Rosson has estimated that with eased restrictions, U.S. agricultural
exports to Cuba could rebound from about $149 million last year to $450
million within a few years.

In October, U.S. Reps. Mike Conaway and Ted Poe of Texas and Rick
Crawford of Arkansas, all Republicans, introduced legislation that would
allow U.S. banks to offer credit to Cuba to buy U.S. agricultural
products and allow for U.S. investment in non-government affiliated
Cuban agribusiness.

Keith Gray, a Houston-based rice miller with Riviana Foods, parent
company of rice brands including Minute, Carolina and Mahatma, hopes the
measure will help reclaim what was once the top export market for
U.S.-grown rice. Riviana is a wholly owned subsidiary of Spain’s Ebro Foods.

“We have been looking for opportunities to sell rice to Cuba for some
time, and it’s always been held up because of the financing issue,” Gray
said in a statement. “This bill would be a game changer, and I think
it’s the best option put forward so far to open up the Cuban market for
our rice.”

But elsewhere there’s strong Republican opposition to the policy shift.
Cuban-American Republican presidential candidates Marco Rubio of Florida
and Ted Cruz of Texas, representing the views of Cubans who fled the
country after the communist takeover and maintain hope of being
compensated for losses, both have spoken out against the softening.

Robert Silva, co-chairman of the Santa Gertrudis Breeders Association
and delegate on February’s Texas Department of Agriculture trip, said
the embargo is only disrupting a trade that could be lucrative for both
parties.

In his case, he sees a market that favors the Santa Gertrudis breed,
both for the restaurant table and the sperm to help build out its herd.

“We would be the logical trade partner for everything they need, but the
embargo’s got to go away,” Silva said. “After 50 years I would think
that (former Cuban asset holders) should forget about it. … A lot of
Cubans in the United States lost their country, lost their property,
still have family there. They’d like to retrieve their property, but I
really don’t think that’s feasible.”

Doug Smith, assistant director of the International Trade Center at the
University of Texas-San Antonio, said the lobby for eased agricultural
trade has been strong, but so far not as strong as the lobby against it.

But he said it was likely just a matter of time before that changes.

“South Florida politics are changing,” he said. “Quite frankly, I think
the most of the younger Cuban-American generation don’t really care that
much.”

Source: Texas ready to feed Cuba’s tourists – Houston Chronicle –
www.houstonchronicle.com/business/article/Texas-ready-to-feed-Cuba-s-tourists-6885866.php

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