Sanctions: Wheat Farmers Want Cuba and the United States to Get Down to Business
By Rebecca Bratter, Director of Policy, U.S. Wheat Associates
Wheat farmers have a big crop to sell this year and U.S. Wheat Associates works hard to find customers for them. Right at hand is an island with 11 million people that grows none of its own wheat. Those farmers are tired of the political gamesmanship that keeps us from effectively marketing their agricultural products in Cuba.
Cuba buys food in a manner not unlike other countries where government agencies act as sole buyers of food staples. The food becomes part of the Cuban daily diet and the money generated supports farming in the US heartland and generates income along the entire U.S. wheat supply chain. It does not prop up the Castro regime to take payment in cash for food. We get the cash; the Cuban people have something to eat. On the surface, there is nothing in any way unusual about the trade exchange, except that U.S. and Cuban citizens cannot travel freely between our countries to conduct normal business transactions and there is no direct banking between the United States and Cuba. U.S. goods to Cuba do not leave the port until cash is paid for the shipment, up-front and through a third party bank. No other trading partner faces these obstacles.
If we were to apply the same criteria for trade with Cuba to our other partners, we would need to undertake a critical examination of our current relationships with China, Vietnam, and Libya, for starters. We would also need to examine why there is greater freedom of travel to other sanctioned countries, such as Sudan and Iran, that requires an OFAC license for business but not travel. If the concern is constituent loyalty of a single-minded group of politicians based in a U.S. city less than 200 miles from Havana, then it is time to stop holding the U.S. economy hostage to special interests from a now irrelevant time in history. We simply cannot afford to continue hemorrhaging income and jobs by closing off markets and, more importantly, by closing off a natural destination for millions of dollars of U.S. agricultural exports. The U.S. economy is still hovering in the danger zone. It is completely counterintuitive to let this mutually beneficial opportunity languish as Cuban food stores go empty and our economy misses an opportunity for a significant infusion of trade dollars that benefit us right here in our heartland.
After almost a decade of limited unilateral trade to Cuba under the Trade Sanctions and Reform Enhancement Act (TSRA), Cuban officials have become impatient and frustrated with the onerous and burdensome requirements of doing business with the United States and are taking their business elsewhere. At the annual Havana International Food Show, Cuban officials traditionally sign contracts for $120 million in business with the United States, this year the contracts barely totaled $20 million. For U.S. wheat farmers, the news is bad. Last year at this time, wheat farmers had sold 300,000 metric tons (MT) of wheat to Cuba; this year it is down to about 60,000 MT. At today's prices, that is a loss of $60 million dollars.
It is of course unfair to place the entire burden for how the United States and Cuba arrived at this particular troublesome juncture. There are political disputes to spare on both sides of the debate, but unilateral sanctions do not have a history of success nor is it rational to invoke extraterritorial jurisdiction to punish those countries that do business with Cuba. We do not believe the United States should shoulder the entire responsibility for trade normalization, but the U.S. government has a clear opportunity to make a first, significant move. It is irresponsible to allow the our economy to forgo significant income and employment growth at this particular moment of continued economic duress by clinging to trade sanctions that do not apply to other trade partners who conduct their politics in a manner similar to Cuba. We are encouraged by legislative initiatives to normalize trade with Cuba, including a full lifting of the travel ban, direct banking, and elimination of the cash-up-front requirement. It is, ultimately, past the time to put politics aside and get down to business.