Trade is the lifeblood of the American soybean industry, and as we move into 2017, Cuba is an exciting, untapped opportunity.
While the major foreign markets for U.S. soy—China, Mexico, Japan, Germany—remain unchanged, Cuba, with its close proximity to major U.S. ports, importation of more than 80 percent of its food and emerging economic potential, represents a growth market for American soybeans… if we can get the policy right.
That process begins with continuing efforts to remove the economic embargo that stands in the way of trade between our two countries.
American companies have been able to sell in Cuba for several decades now, and as recently as 2008, U.S. farm exports to Cuba totaled almost $700 million, however those sales totaled less than $200 million just two years ago and has since slipped to less than 10 percent of the nearly $2 billion market that Cuba represents. This loss is due almost entirely to the continued trade embargo, which would require Congressional actions to overcome.
Chief among the embargo roadblocks is the Cuban buyers’ access to credit. Currently, as the U.S. maintains its provision requiring Cuban purchasers to pay cash in advance or use a third-party institution, our farmers are placed at a serious disadvantage behind foreign competitors that can extend credit.
Looking to remedy this roadblock, ASA supports a bill from Rep. Rick Crawford and Sens. John Boozman and Heidi Heitkamp to remove the cash-in-advance provision. At the executive level, the Obama Administration took significant strides to normalize relations between our two nations, which included the reopening of the U.S. Embassy in Havana and the removal of restrictions on the use of checkoff funds to market American products in Cuba.
In a time of distressed markets and lower prices, we need to explore more trade, not less, and while Cuba will never be the largest foreign market for U.S. soy, we support the expansion of trade with the island nation as it nonetheless represents a valuable market for our products.