U.S. farmers unhappy over Trump’s Cuba clampdown

Farmers in the U.S. are critical of President Donald Trump’s decision to retreat from his predecessor, Obama’s opening toward Cuba, saying it could derail huge increases in farm exports that totalled $221 million last year.

The agriculture sector has long advocated an end to the trade embargo with Cuba in place since Fidel Castro consolidated power in the early 1960s. Companies including agricultural equipment maker Deere & Co. and soybean processor Bunge Ltd., along with American Farm Bureau Federation, the biggest U.S. farmer group, have supported full farm trade.

Boosting trade with Cuba has symbolic significance for farmers beyond any financial benefit. The country lies only 90 miles (145 km) from Florida, and had traded sugar and grain with its larger neighbour for decades before the embargo.

Trump signed a presidential directive last week, rolling back parts of former President Barack Obama’s opening to the Communist-ruled country after a 2014 diplomatic breakthrough between the two former Cold War foes.

Farmers groups are calling this move as retrograde even though agriculture is not directly targeted. U.S. law exempts food from the decades-old embargo on U.S. trade with Cuba, but cumbersome rules on how transactions were executed have made deals difficult and costly.

Since Obama’s easing of diplomatic ties,  shipments of U.S. corn and soybeans to Cuba has soared 420 per cent in 2016 from a year earlier to 268,360 tonnes, according to U.S. Department of Agriculture data.

Through the first four months of 2017, total shipments of U.S. grain and soy were 142,860 tonnes, up from 49,090 tonnes during the same period of 2016. U.S. agricultural exports to Cuba rose to $221 million in 2016 after three consecutive annual declines, according to U.S. Department of Agriculture data. Sales this year are outpacing last year’s by 19 per cent.  The group sees an opportunity for $125 million more a year in trade to Cuba.

Trump’s move could decrease near-term sales and adversely affect economic development that would drive longer-term demand growth.  Normalized trade with Cuba could add $1 billion in sales for U.S. farmers, the USDA said last year. Even under trade restrictions, the U.S. was the country’s leading source of imports from 2003 to 2012.

Trump may also crack down on illicit travel to Cuba and dissuade U.S. companies from interacting with Cuban businesses that are owned or controlled by the military. Supporters of the embargo point to Cuba’s poverty and poor human-rights record as reasons why agriculture groups should attach less importance to markets.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.


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