Senate Hearing on Expanding U.S. Agricultural Trade with Cuba

On April 21st the U.S. Senate Committee on Agriculture, Nutrition and Forestry held a hearing, “Opportunities and Challenges for Agriculture Trade with Cuba.”[1]

 Chairman’s Opening Statement

Senator Pat Roberts
Senator Pat Roberts

The Committee Chair, U.S. Senator Pat Roberts (Rep., KS), opened the hearing by stating, “At the beginning of this Congress, I was hopeful that trade would be one area where we could work across the aisle to find agreement. I am still hopeful that is the case. . . . International trade of American agriculture products is critical…critical to the nation’s economy and critical to our Kansas farmers and ranchers. I have long fought to eliminate barriers to trade, and I believe that we should continue to work towards new market access opportunities for our agriculture products.”

“The United States and Cuba have a long history full of contention and instability. There is no shortage of opinion from members of Congress about the relationship between our two countries, both present and future. Some are concerned about human rights, others about socioeconomic ideology. But those concerns are not what this committee will focus on this morning. Today we are here to discuss the role of agriculture – opportunities and challenges – in Cuba.”

“This is not an issue that we are going to be able to fix overnight. It will take efforts in addition to bills in Congress to truly normalize trade with Cuba. The decisions that are made regarding increased trade with Cuba must be made carefully.”

“Four months ago the President announced a major shift in U.S. policy towards Cuba. It is my hope that in the future, the President will work with Congress to determine the best path forward. Foreign policy does not happen in a vacuum. We have to take a realistic approach and work out a step-by-step plan towards lifting the embargo. This is a goal that should include Congress.”

“Today we will hear from an impressive panel of experts, from the regulators responsible for writing our policies toward Cuba, to the producers who seek to grow the market for their products. I understand that, like myself, many of our witnesses here have traveled to Cuba to see first-hand what challenges and opportunities exist.”

“Agriculture has long been used as a tool – not a weapon – for peace and stability. It is my hope that Cuba will embrace the practices of free trade, enterprise and commerce, so that both countries will gain from increased relations.”

“Earlier this year, the U.S. Agriculture Coalition for Cuba was launched. They have shared a statement and additional information in support of our work today, [which was] entered into the record.”

Ranking Member’s Opening Statement

Senator Debbie Stabenow
Senator Debbie Stabenow

Senator Debbie Stabenow (Dem., MI), the Ranking Committee Member, said, “Improving trade with Cuba represents not only a great opportunity for America’s farmers, ranchers, and manufacturers, but a meaningful way to help rebuild trust between our nations.  After more than 50 years of stalemate, it’s time for a new policy on Cuba.”

“When I visited Cuba earlier this year – just days after President eased some trade restrictions – I saw firsthand the eagerness of Cubans who want to develop a more effective relationship with the [U.S.] But we can only get there if we begin to take meaningful steps to soften many of the barriers that exist between us.”

“And America’s farmers and ranchers are uniquely positioned to lead the way. Consider this – in 2014, the U.S. exported just over $290 million in agricultural goods to Cuba. That’s a good start, but for a country only 90 miles off our coast, we can do much more. Cuba’s own import agency estimates that it will receive approximately $2.2 billion (in U.S. dollars) worth of food and agricultural products this year alone.”

“That type of economic potential deserves a chance to succeed – and is one reason why many of the largest producer groups, trade associations, and companies from within agriculture have come together to push for increased engagement.”

“Many on this Committee have pushed for increased engagement and have taken the opportunity to visit Cuba in recent months. I’d like to recognize Senators Leahy and Klobuchar, as well as Senator Boozman and Heitkamp, for their bipartisan leadership on this issue.”

“The commitment to democratic ideas and human rights we share as Americans are best realized through engagement. Our bedrock principles accompany every product farmers and ranchers send to Cuba.”

“Last week’s action by the President [in rescinding the designation of Cuba as a “state sponsor of terrorism”] is a step forward toward in normalizing our relationship and will test the commitment of the Cuban government to this process.”

“But even while we are making significant progress in rebuilding our relationship with Cuba – the policies governing trade between our countries are not yet designed to allow a steady flow of goods and services. We must find a path forward that allows U.S. financial institutions to safely and securely work with Cuban purchasers, including the extension of lines of credit. And we should work to authorize a greater range of goods, services, and supplies for export to Cuba. These measures not only make good business sense – they also will help build Cuba’s agricultural capacity and make the island a better trading partner in the long run.”

The Witnesses at the Hearing

 The witnesses at the hearing were the following: (1) The Honorable Michael T. Scuse, Under Secretary, Farm and Foreign Agriculture Services, U.S. Department of Agriculture; (2) Mr. Matthew Borman, Deputy Assistant Secretary, Bureau of Industry and Security, U.S. Department of Commerce; (3) Mr. John Smith, Acting Director, Office of Foreign Assets Control, U.S. Department of the Treasury; (4) Mr. Michael V. Beall, President & CEO, National Cooperative Business Association; (5) Mr. Terry Harris, Senior Vice President, Marketing and Risk Management, Riceland Foods; (6) Mr. Ralph Kaehler, Farmer and Owner, K-LER Cattle Company, St. Charles , MN; (7) Mr. Doug Keesling, Fifth Generation Owner, Keesling Farms, Kansas Wheat, Chase , KS; and (8) Dr. C. Parr Rosson III, Professor & Department Head, Department of Agriculture Economics, Texas A&M University.

 Witness Ralph Kaehler

Senator Amy Klobuchar
Senator Amy Klobuchar

Minnesota’s Senator Amy Klobuchar, who is a member of the Committee and the author of the Freedom to Export to Cuba Act (S.491) ending the U.S. embargo of Cuba, introduced Ralph Kaehler, whose family has been operating a livestock, row crop, and canning vegetable farm in Minnesota for nearly 130 years.

The Senator prefaced her introduction with this statement: “For too long, export and travel restrictions have prevented American farmers and ranchers from seeking opportunities in Cuba. That is why I have introduced bipartisan legislation to lift the trade embargo on Cuba, and this hearing allowed us to focus on how we can ensure that our farmers and ranchers benefit from normalized relations between our two countries.”

Mr. Kaehler testified that his farm was “an exhibitor in the First U.S./Cuba Food and Agriculture Exposition [in Havana] in 2002.” It “was the only one with live animals— affectionately known as the ‘Cuban Ark’ . . . to exhibit the diversity of U.S. livestock producers, and to introduce Cuba to the typical USA farm family.”

“Since then, the Kaehler Family has led over 10 trade delegations to Cuba. These missions have included producers from seven different states and a bipartisan mix of state lawmakers and officials. To date, some of the most successful exports to Cuba we have facilitated include shipments of livestock, dried distillers grains, powdered milk, animal milk replacer, and texturized calf feed.”

“Given the opportunity, U.S. farmers do well in Cuba. We have a significant advantage of shorter shipping over Europe, South America, Asia, and other major exporters. In addition, Cuba can take advantage of U.S. rail container service and sizing options, which also brings significant benefits to smaller privately owned businesses like ours. On top of all this, the U.S. produces a wide variety of affordable and safe food products that Cubans want to eat.”

“Unfortunately, some of the policies currently in place diminish the natural advantages American agriculture enjoys over its competitors. For instance, requirements for using third country banks for financing adds a lot of paperwork, time, and personalities to every transaction. Coupled with a restrictive cash‐in advance shipping policy . . . there is a very small margin for error before a shipper faces demurrage fees. As a family operation trying to build our business through exports, this self‐inflicted inefficiency can be tough to manage.”

Mr. Kaehler then made three specific recommendations to Congress. “First, . . . improve the trade financing rules for Cuba. . . . Second, . . . small firms like ours . . . need marketing support and assistance [from USDA] to help support our companies and figure out exactly what’s going on in markets abroad. . . . [Third,] I hope that Congress will expand the universe of people involved in U.S.‐Cuba trade by allowing a greater variety of goods and services to be traded.”

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[1] A quick examination of the official websites of the Committee’s 20 members reveals that seven have made statements favoring at least some aspects of U.S.-Cuba reconciliation (Boozman (Rep., AK), Brown (Dem., OH), Heitkamp (Dem., ND), Hoeven (Rep., ND), Klobuchar (Dem., MN), Leahy (Dem., VT) and Stabenow (Dem., MI)). Only two have negative statements about that reconciliation (Grassley (Rep., IA) and Perdue (Rep., GA)). The other eleven members‘ websites do not reveal any position on Cuba (Bennet (Dem., CO), Casey (Dem., PA), Cochran (Rep., MS), Donnelly (Dem., IN), Ernst (Rep., IA), Gillibrand (Dem., NY), McConnell (Rep., KY), Roberts (Rep., KS), Sasse (Rep., NE), Thune (Rep., SD) and Tillis (Rep., NC)). A more thorough examination of the records of the last 11 would probably uncover other indications of their positions on reconciliation with Cuba.

 

U.S. Senate Democrats Unwisely Re-elect Harry Reid as Leader

Senator Harry Reid
Senator Harry Reid

Today, November 13th, the Senate Democrats re-elected Senator Harry Reid as their leader, now Minority Leader, for the next Session of Congress starting in January. [1]

Although the voting was by secret ballot, it was not unanimous. At least four of the Senators rejecting Reid have been identified: Claire McCaskill of Missouri, Heidi Heitkamp of North Dakota, Joe Manchin of West Virginia and Mary Landrieu of Louisiana. McCaskill said, “When you have an election like this, common sense says we need to change things. The voice was very loud and unmistakable. To me that means changing leadership, and it was just that simple.” Heitkamp added, “This was a change election. I think that we needed to demonstrate that we heard the American public.”

Over the last several months, these four were part of a group of about 10 more junior Democratic senators have begun more openly registering their dissatisfaction with Mr. Reid’s approach. Others include Senator Angus King of Maine and Senator Jon Tester of Montana.

The leadership votes went ahead after several in the caucus asked for a delay to give them an opportunity to consider others for the leadership posts.

Senator Reid apparently responded to these negative views of his leadership by appointing Senator Elizabeth Warren of Massachusetts as the Caucus’ Strategic Policy Advisor, Senator Amy Klobuchar of Minnesota to chair a caucus committee that handles outreach to outside allies and activists and Senator Tester as Chair of the Democratic Senatorial Campaign Committee.

As a Democrat, I think the re-election of Reid is a horribly unwise. I have cringed every time Reid appears on television as the voice of the Senate Democrats. He comes across as tired, old, cranky, dull, weak and unpersuasive. When he appears on television with the Republican leader, Senator Mitch McConnell, soon to be the Majority Leader, the personal animosity between the two often is apparent. The Democrats and the country do not want to see a continuation of this outworn drama.

Senator Amy Klobuchar
Senator Amy Klobuchar

As a Minnesotan, I believe our Senator Amy Klobuchar would be an excellent new Minority Leader. She would be a fresh face, younger (age 54) and female in sharp contrast to McConnell. She also has a record of being able to get along with Republicans in the Chamber. In the final debate this year for Minnesota’s other U.S. Senate seat, the unsuccessful Republican candidate, Mike McFadden, frequently praised Klobuchar and said “I’m here to say Amy Klobuchar sets the bar for work ethic and authenticity.”

Scott Lehigh, a Boston Globe columnist, said the 74-year old Reid “should announce that when this session of Congress ends, [he] will relinquish [his] role as leader of [the] . . . Democratic [caucus].” Reid is a “tired face, stale voice, entrenched presence in Washington. . . . After a certain period, congressional leaders’ caricatured images get so ingrained that they become electoral liabilities for their parties.” (Lehigh makes the same argument about why Nancy Pelosi should not be the Democratic leader of the House in the new Congress, but that is an argument for another day.)

Another columnist in the Wall Street Journal, Gerald Seib, posed a similar question, “Where are the [Democrat] party’s fresh young leaders?” But he assumed that Reid would be the new Minority Leader, and instead mentioned Senator Elizabeth Warren as a potential national leader of the party along with “highly capable younger Democrat [Senators]:” Mark Warner, . . . a 59-year-old moderate from a key swing state, as is Colorado’s 49-year-old Michael Bennet. New York Sen. Kirsten Gillibrand, 47, is a rising star.”

I have no quarrel with any of these prominent Democratic Senators, and any of them would change the public persona of the Senate Democrats, but I point out that they have less experience in the Senate than Senator Klobuchar’s eight years: Warner (six years), Gillibrand (six years), Bennet (four years) and Warren (two years).

Here is a personal plea to Senator Reid. Wake up. Give someone else the opportunity to lead. Do not be a liability to your party. Stand down.

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[1] This account of the re-election of Senator Reid is based upon articles in the New York Times, Washington Post, Wall Street Journal and Politico.