Prospects for U.S. Agribusiness in Cuba
With President Obama’s trip to Havana around the corner, Engage Cuba, the leading coalition of private businesses and organizations working to end the travel and trade embargo on Cuba, has created an analysis regarding benefits that U.S. agribusiness stand to gain in future trade agreements with Cuba. (See here for a full breakdown of state-specific opportunities.)
Significant opportunities exist for American agribusiness in Cuba — an island nation that imports up to 80% of its food. American producers and exporters of agricultural commodities and food products, as well as associated industries, stand to benefit from greater market access and increased trade with Cuba.
Yet, in order to capitalize on the opportunities for U.S. agriculture in Cuba, we must change U.S. policies that restrict financing and reduce the competitiveness of U.S. industry. American agribusiness continues to lose market share to the EU, Brazil, and Argentina due to current U.S. policies: the U.S. now ranks 4th in agricultural exports to Cuba. If Congress were to change U.S. policy on agricultural exports to Cuba, American exports would be more competitive and able to recapture lost market share in a country with 11 million consumers a mere 90 miles from our shore.
- American agribusiness continues to lose market share to the EU, Brazil, and Argentina due to current U.S. policies. The U.S. now ranks 4th in agricultural exports to Cuba.
- Cuba’s agricultural imports are expected to grow as increased tourism fuels demand for food products, especially those of higher quality, and as remittances flow more freely due to U.S. policy revisions — all within the context of stagnant Cuban production.
- If Congress were to change U.S. policy on agricultural exports to Cuba, American exports would be more competitive and able to recapture lost market share.
Cuba imports up to 80% of its food. In 2014, Cuban agricultural imports totaled almost $2 billion, nearly doubling since 2004. Cuba’s main imports include dairy (14%), soy products (13%), wheat (13%), corn (11%), rice (10%), and poultry (10%). The top U.S. agricultural exports to Cuba are poultry, corn, and soybeans.
As a result of U.S. policies, American agribusiness is losing ground to countries who are able to offer financing. The Trade Sanctions Reform and Export Enhancement Act (TSRA) of 2000 prohibits U.S. exporters from extending credit to Cuba’s agricultural importers. Consequently, the U.S. fell from its position as the #1 supplier of agricultural products from 2003 to 2012; the U.S. is now Cuba’s #4 supplier after the EU, Brazil, and Argentina.
Significant opportunities exist for American agribusiness in Cuba, from exporters of agricultural commodities and food products to associated industries that will benefit from greater market access. Demand for high quality U.S. agricultural products is driven not only by the increasingly middle class Cuban population of 11 million, but also by remittances and tourism, which is expected to rise dramatically. In order to capitalize, we must change U.S. policy.