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PURE CUBA: Increased agricultural trade with Cuba faces obstacles in addition to embargo

Apr 28, 2016

Michigan agriculture businesses are intrigued by the prospect of doing business in Cuba, after the Obama administration re-established formal ties with the island nation.  

Cuba also sees the U.S. as a potential new market.  

But there are still many obstacles standing in the way of increased agricultural trade.  One of them is the low productivity on the typical Cuban small farm.

U.S. Secretary of Agriculture Tom Vilsack toured farms in Cuba last year.  He says he's impressed with what Cuban farmers have been able to produce given their limited access to technology, machinery and other inputs, but they have a long way to go. 

"I think the word I would use to describe Cuban agriculture is very basic and rudimentary," says Vilsack.  "For American producers it would be like going back in time to the 1930s and 1940s in this country, which is one of the reasons Cuba imports 80% of its food."

Although Cuba has large-scale tobacco and sugar cane farms, most of its more typical food-producing farms are small.  If a farmer is lucky enough to have a tractor, it's likely to be at least 30 years old.  Many other farmers till their fields with oxen, or even by hand.  

Pesticides and herbicides are very expensive - so by default many farms are raising crops organically.

Vilsack says that actually represents an opportunity.

"Their land  could be well suited for organic production, of organic fruits and vegetables," he says, "of which there is an increasingly large demand here in the U.S. and around the world."

And, in return, Vilsack says, American farmers could sell more rice, black beans, milk, and poultry to Cuba's centralized government, which has long struggled to feed its people, even after the so-called "Special period" of privatization when the Soviet Union collapsed in 1989, along with its support of Cuba.

Cuban agriculture experts told us this sounds like a fine plan.

But increasing yields on the country's 200,000 small farms to produce local crops for Cubans and tourists has to come first. 

Something that could help in the near future is the U.S. government's approval of the first American-built factory on Cuban soil in more than sixty years.

CleBer is a joint venture, established in 2015 by Cuban native Saul Berenthal and U.S. businessman Horace Clemmons, to provide simple, cost effective tractors to Cuban farmers.   The group hopes greater efficiency in farming the land will allow today’s field workers to become part of tomorrow’s supply chain in distributing Cuban-grown agriculture to a wider geographic area.

Tractor production is scheduled to begin in late 2016 or early 2017.

Meanwhile, the uncertainty hasn't deterred U.S. agriculture groups from sending out scouts, like Jim Byrum of the Michigan Agribusiness Association.

As he knows well, a staple of the Cuban diet is black beans, and "we grow more black beans in Michigan than any state in the union.  Currently Cuba's buying them from South America or China, and we think it makes more sense for them to look here."

Still, Byrum is a realist.  He says trade with Cuba is often stymied by the embargo, which doesn't permit the country to buy U.S. goods on credit.

And he says Americans shouldn't expect Cuba to open its wallet unilaterally.

"It needs to be a two-way street, it's not just sell, sell, sell," says Byrum, "because they don't have a lot of money, money, money."

While political resistance to lifting the embargo remains, Agriculture secretary Tom Vilsack sees it being chipped away every day.

"And particularly agriculture's leading the effort because we see the wisdom of doing business with the Cubans, so I think it's just a matter of time," Vilsack said.

Cubans are especially eager for an end to the embargo.  It's hoped that will mean more food on their own tables, as well as on the plates of tourists.

Correction:  The original story said U.S. Secretary of Agriculture Tom Vilsack was "not impressed" with the state of Cuban agriculture, because it is "basic and rudimentary."  A spokeswoman for Vilsack says he was actually very impressed with what Cuban farmers have been able to produce given their limited access to technology, machinery and other inputs, but he acknowledges they have a long way to go.

*This post was last updated at 12:15 p.m. on April, 28, 2016.

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