A delegation of 75 top U.S. agriculture leaders organized by Minnetonka-based Cargill Inc. will arrive in Cuba this weekend on a trade mission to explore the potential for increased business between the two countries.
Leaders said the trip will be a “learning journey” to understand what Cuba may need from U.S. farms, including corn, soybeans and rice, and what products the United States might receive from Cuba if less restrictive trade policies are adopted by both countries.
“It’s really about just having a good exchange with them on the state of the agricultural economy in Cuba,” said Devry Boughner Vorwerk, director of international business relations at Cargill, which has taken a lead in lobbying Congress to lift the trade embargo with Cuba.
Vorwerk and others started the U.S. Agriculture Coalition for Cuba early this year, weeks after President Obama announced he would pursue normal trade and diplomatic relations with Cuba following more than 50 years of restrictions.
The trip will begin with an orientation on Sunday, and a set of meetings with Cuban government import officials and others on Monday. The delegation will split into six smaller groups on Tuesday to visit Cuban farmers and agricultural cooperatives, Vorwerk said, to learn about their production capabilities, challenges and innovations. Wednesday will be a wrap-up day that includes discussions of the larger issues ahead.
The delegation includes two former U.S. agriculture secretaries, the governor of Missouri and leaders of several national crop, livestock and export associations.
Kevin Paap, a corn and soybean farmer in southern Minnesota’s Blue Earth County and president of the Minnesota Farm Bureau, said his organization has long urged normalized trade and travel between the U.S. and Cuba — and Minnesota could benefit from both.
Cuba is a small market with about 11 million people, he said, but Cubans need grain, agricultural technology and such livestock products as chicken and turkey.
“Any time you’ve got somebody that’s only 90 miles away and imports 80 percent of its food, they’re definitely a potential customer,” Paap said. “But it will take a while for Cuba to get in that position to be able to buy those products as their economy improves, and there’s going to be some challenges.”
Cuba has received U.S. agricultural exports on a limited basis since 2001, under a complicated payment system that requires prepaid cash or letters of credit handled by banks in third countries.
Minnesota exported about $26 million in ag products to Cuba in 2012, and an estimated $20 million in 2013, mainly in corn, soybeans and soybean meal, according to state agriculture officials.
Dave Frederickson, commissioner of the Minnesota Department of Agriculture, said exports from the state to Cuba could grow to $46 million under some projections — not anywhere close to the trade volumes with Canada, Mexico or China, he said, but a significant bump nonetheless.
“Obviously it’s not going to happen overnight, but I think we’re seeing this rush to get to Cuba because everyone wants to be first through the door,” Frederickson said. “They want to make that personal connection.”
A Minnesota legislative committee is scheduled to discuss a bill Tuesday that would provide $100,000 over the next two years to help the state ag department identify and communicate “existing and emerging opportunities” in Cuba for farmers and food processors.
Vorwerk said an increase in trade with Cuba would not be one-way, and it would not involve only commodities.
“It would also be innovations, technology and services,” she said. “There’s a lot that we could bring.”
What Cuba could offer is less clear, she said, and that’s part of what the delegation hopes to learn.
“We’ve heard and understood that Cuba has innovations in the livestock area, like animal health,” she said. “We’re interested in learning about that.”
Cuba is also known for its organic farms, and a Cuban brand for organic honey, fruits or vegetables might be attractive to U.S. consumers, Vorwerk said.
“Depending on whether they can get their yields up enough to actually export, they could have a market for some of these higher margin products in the United States,” she said.
Vorwerk said that fact-finding trips and people-to-people exchanges are important, but translating that to commercial trade deals will be difficult without ending the 54-year-old trade embargo and easing other restrictions.
Sen. Amy Klobuchar, D-Minn., introduced the Freedom to Export to Cuba Act two weeks ago, and Vorwerk is optimistic that Congress will take up the measure this year. With Cubans paying high prices for rice imported from Vietnam and other food from Brazil, she said, it should be a “no-brainer” for the United States to lift its ineffective trade embargo.
“If the embargo did not exist, and the financing restrictions didn’t exist, we’d be shipping more there,” Vorwerk said. “Why are the Brazilian companies getting the benefit instead of our ag groups?”