Cuba trade important to farmers
- Submitted by: admin
- United States
- Politics and Government
- 07 / 25 / 2010
Steve Yoder is chairman of the National Corn Growers Association’s Joint Trade Policy A-Team. He farms near Dalhart, Texas.
Reps. Collin Peterson, D-Minn., and Jerry Moran, R-Kan., recently introduced H.R. 4645, the Travel Restriction Reform and Export Enhancement Act, to increase one-way agricultural trade to Cuba.
The National Corn Growers Association strongly supports this bill.
Perhaps the best way to describe why this bill is important to our members is to first dispel some of the myths surrounding trade with Cuba and describe what this bill does not do to the embargo. Simply put: The embargo is not lifted; it stays in place.
Food and medical supplies are already exported to Cuba from the United States under a humanitarian exception to the embargo.
What does the bill actually accomplish for U.S. farmers?
RIGHT NOW, the embargo is certainly working, but against a group it was not intended to affect — U.S. farmers.
Some agricultural exports do flow from the United States to Cuba under the exemption. However, our producers do not compete on a level playing field against their international competition to supply this market.
While corn farmers are fortunate enough to export bulk corn to Cuba — unlike other important commodities such as rice — we do so at a disadvantage against ever-increasing competition from Brazil and Argentina.
DURING THE 2008-2009 marketing year, the USDA’s Foreign Agricultural Service reports Cuba was our 10th-largest market for corn. In 2009, we exported 24 million bushels of corn to that country.
Unintended consequences happen all the time from policy decisions, but that does not mean this one can’t be fixed for our farmers.
H.R. 4645 lifts the requirement known as “cash in advance” that makes the Cuban importer pay for U.S. agricultural goods while they are still at our port, instead of payment before title changes, which is generally at the point of import. This makes our products more expensive, compared to other countries that do not impose the same requirement.
The bill also changes “third-party banking” to allow the Cuban importer to pay a U.S. bank directly, instead of going through a non-U.S. third-party bank, which adds a transaction cost our competitors do not require.
Importantly, H.R. 4645 also lifts the travel ban and, in doing so, would allow U.S. tourists to go to Cuba but would not increase travel from Cuba to the United States in any way. This change is integral to increasing demand, especially for our value-added products such as meat and certain dairy products.
Why do I as a farmer care about trade with Cuba? Despite numerous weather issues, U.S. corn producers set all-time records in national average yields and total production in 2009.
U.S. farmers produced more than 13.1 billion bu. of corn in 2009 and are building stocks. Clearly, I need to be able to compete on a level playing field with my competition. There is also growing interest in DDGS in Cuba.
Our exports of this value-added product increased about 50 percent from marketing year 2007-08 to marketing year 2008-09.
We need to capitalize now on this opportunity and not allow policies such as cash in advance and third-party banking to continue disproportionately penalizing an important value-added product.
This bill increases one-way trade to Cuba. It’s a win-win situation off an embargo that is having unintended consequences against a group it was never meant to affect.
CONGRESS MUST consider the potential benefits and current costs to U.S. farmers and ranchers when looking at this embargo.
This bill is bipartisan and certainly timely in light of the president’s goal to double U.S. exports.
H.R. 4645 is good for our economy. We hope members of Congress seriously consider the whole picture and say “yes” to these changes to the embargo with Cuba.
By Steve Yoder
Source: www.iowafarmer.com
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