Arkansas farmers could have greater access to Cuba’s agriculture markets this year if President Trump approves

by George Jared (gjared@talkbusiness.net) 477 views 

Arkansas lawmakers in Washington D.C. are cautiously optimistic a deal will be brokered to allow farmers to sell agriculture goods in Cuba with private financing.

There’s a $1 billion agriculture export market in Cuba, and that could double in the next three to five years if farmers could use credit instead of just cash to facilitate deals, U.S. Rep. Rick Crawford, R-Arkansas, told Talk Business & Politics.

U.S. Sen. John Boozman, R-Ark., along with U.S. Sen. Heidi Heitkamp, D-N.D., reintroduced the Agriculture Export Expansion Act on Thursday. Crawford introduced a similar bill in the House about a month ago.

“We’ve built up a lot of support,” Crawford said. “It doesn’t validate the Castro administration … it’s a good deal,” he said.

Farmers can sell their wares in Cuba, but can only execute upfront, cash transactions. The bills pushed by Boozman and Crawford would allow private credit to be used in the communist controlled island. Attempts have been made in the last couple of years to change the export laws since former President Barack Obama lifted a decades-long embargo between the two countries.

“It’s time for Washington to enact common sense reforms so Arkansas farmers and agriculture producers from around the country can compete fairly for the Cuban market place,” Boozman said.

Crawford hasn’t spoken to President Donald Trump about the bills, and he doesn’t think the new president will act on the measures during the next couple of months. Trump has an ambitious agenda his first 100 days in office, but by the middle of the year or in early fourth quarter the bills might have enough support to be passed, he said. After he filed his latest bill, Crawford said support this time around has been stronger. He thinks the new president will view this as an investment opportunity and a way to create jobs in the U.S.

“He’s a deal maker … I think he recognizes a good deal, and this is a good deal,” Crawford said.

One Arkansas farmer is thrilled with the proposed legislation. Arkansas Rice Council President Jeff Rutledge, of Newport, hopes it gets passed.

“Being able to sell our commodities to Cuba as easily as we sell to other markets such like Mexico and Canada would be huge, especially for U.S.-rice,” Rutledge said. “Senator Boozman’s bill would strip away regulatory red tape and allow us to compete in the Cuban market just like we do everywhere else.”

Cuba might be the ideal export partner for Arkansas. Rice is the Cubans staple food, and the country has to import nearly 80% of rice consumed, according to the University of Arkansas. The U.S. exports about 60,000 tons per year to Cuba, but that could grow to 350,000 tons if credit restrictions were removed. Cubans consume about almost a million tons annually. Cuba imports most of its rice from China, Vietnam, and Thailand.

Arkansas is the country’s largest rice producer, with 1.3 million acres dedicated to the crop annually. The Natural State produced about 12 billion pounds of rice last year, half the amount produced in the U.S., according to the U.S. Department of Agriculture. Nearly all Arkansas rice is grown in the Mississippi Delta, and Craighead County is among the top rice growing counties in the country with about 70,000 acres.

Prices have plunged in recent years. Arkansas farmers got about $4.25 per bushel in 2016, after projections showed the farmers would get at least $4.50 a bushel. A new market could help raise rice prices, Crawford said. Proximity may also help U.S. rice farmers. The cost to transport rice from Asian countries to the Gulf of Mexico will figure into the overall prices.

Cubans also consume large quantities of poultry, and Arkansas is one of the leading poultry producing states. It isn’t just about how much rice and chicken Arkansas farmers can sell in Cuba. Expanding export markets will lead to better economic conditions on the island, he said. A better economy will lead to a more diversified consumer base, and other products such as beef and pork which are too expensive for many Cubans right now, will become affordable.

The bills are before the Agriculture Committee. Two other committees, Foreign Relations and Financial Affairs will have to “cede” control of the bills completely to the Ag Committee, so it only has to be approved through one vote. Crawford thinks that will happen, and the committee will approve his bill. He’s been walking the halls inside Capitol Hill, hoping to build a strong consensus before votes are cast.

“This will help a lot of farmers across the board,” he said.

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