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.

 

American People’s Reactions to U.S.-Cuba Reconciliation

After looking at international, Cuban and U.S. Government reactions to the December 17th announcement of U.S.-Cuba reconciliation, we now examine the reactions of the American people.

Those reactions can be obtained from public opinion polls and the views of prominent Americans, newspapers and business interests and from efforts to promote understanding of the issues and congressional support of the changes.

American public opinion polls consistently have shown that a majority of Americans favor reestablishing relations with Cuba. In April 2009 the favorable opinion ranged from 60% to 71% with the opponents from 20% to 30%. In April 2014 it was 51% to 20%, and in October 2014, 56% to 29%. [1]

This was confirmed just after President Obama’s December 17th announcement of the breakthrough with Cuba in a poll conducted by ABC News and the Washington Post. Re-establishing diplomatic relations was supported, 64% to 31%. Ending the embargo, 68% to 29%. Ending travel restrictions, 74% to 24%. [2]

On January 19, 2015, over 70 prominent Americans sent a letter to President Obama ”commending [him] on the historic actions [he is] taking to update America’s policy toward Cuba and Cuban citizens. Our new posture of engagement will advance our national interests and our values by empowering the Cuban people’s capacity to work towards a more democratic and prosperous country–conditions that are very much in the U.S. interests.” [3]

The New York Timeseditorial of December 18, 2014, “Mr. Obama’s Historic Move on Cuba,” stated that the changes in U.S. relations with Cuba “ends one of the most misguided chapters in American foreign policy. The White House is ushering in a transformational era for millions of Cubans who have suffered as a result of more than 50 years of hostility between the two nations.” 

The Wall Street Journal’s editorial on the announcement of the changes first admitted that “20 years ago these columns called for lifting the U.S. trade embargo on Cuba. We did so to assist the impoverished Cuban people and perhaps undermine the regime.” The Journal, however, went on to argue that “Mr. Obama’s approach will provide immediate succor to the Castro government in the hope of eventually helping the Cuban people.”  A similar negative view was expressed by the Journal’s conservative columnist, Mary Anastasia O’Grady, “So How’s That Cuba Deal Going?” Another of the Journal’s conservative columnists, Peggy Noonan, however, reached a different conclusion in her article, “The Cuban Regime is a Defeated Foe: In time, normalized relations will serve the cause of freedom.

An even more negative review was provided in the Washington Post’s editorial, “President Obama’s ‘betrayal’ of Cuban democrats.” 

On January 8, 2015, the United States Agricultural Coalition for Cuba was launched by 30 companies and other organizations “to strive to turn Cuba from an enemy to an ally . . . by building trade relations with an honest appraisal of the past and a fresh look to the future.” This mission is based upon the beliefs that “the improvement of agricultural trade between the U.S. and Cuba is the foundation for building successful and enduring relations between the two countries” and that “an increased exchange of ideas, knowledge, capital and credit will benefit both countries.” Speaking in support of this Coalition were U.S. Secretary of Agriculture (Tom Vilsack), Governor of Missouri (Jay Nixon), U.S. Senators Amy Klobuchar (Dem., MN) and Jerry Moran (Rep., KS) and U.S. Representatives Sam Farr (Dem., CA), Kevin Cramer (Rep., ND) and Rodney Davis (Rep., IL).

Another supporter of the reconciliation, including the ending of the embargo, is the U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations. On December 17, 2014, it stated, ““The U.S. business community welcomes today’s announcement, and has long supported many of the economic provisions the president touched on in his remarks. We deeply believe that an open dialogue and commercial exchange between the U.S. and Cuban private sectors will bring shared benefits, and the steps announced today will go a long way in allowing opportunities for free enterprise to flourish. The Chamber and its members stand ready to assist as the Cuban people work to unleash the power of free enterprise to improve their lives.”

CodePINK (Women for Peace) has started a campaign to have citizens: “Tell Congress that you support the President’s effort to improve US-Cuba relations, and you’d like them to go even further by lifting all travel restrictions, take Cuba off the terrorist list, and return Guantanamo naval base to the Cuban people.” 

An important event to promote Minnesotans understanding of these issues will be on February 23rd (9:30-11:00 a.m.): “Modernizing U.S.-Cuba Relations Summit.” [4] This Summit has been called by our Senator Amy Klobuchar, a self-identified “strong supporter of normalizing ties with Cuba and increasing travel and commerce that could create new economic opportunities for American farmers and businesses while increasing the quality of life for Cubans.” After the Senator’s opening remarks, the keynote speaker will be Michael Scuse (Undersecretary for Farms and Foreign Agricultural Services, U.S. Department of Agriculture). The Senator will then moderate a panel discussion with Dave Fredrickson (Commissioner, Minnesota Department of Agriculture), Devry Boughner Verwerk (Cargill Incorporated’s Director of Latin American Corporate Affairs and Chair of the U.S. Agricultural Coalition for Cuba), Rodolfo Gutierrez (Executive Director, Hispanic Advocacy and Community Empowerment through Research) and Ralph Kaehler (Minnesota farmer who has participated in trade missions to Cuba).

I am helping to organize Minnesotans for U.S.-Cuba Reconciliation to inform the citizens of our state about the importance of this breakthrough and to mobilize public opinion to persuade our representatives in Congress to support the various measures to implement such reconciliation.

Conclusion

Now is the time for U.S. citizens who want to see our country reconciled with Cuba to be active. Say thank you and support, politically and financially, senators and representatives who support this effort. Identify those in Congress who appear to be open to this point of view from the citizenry and communicate your views to them. Write letters to the editor or op-ed articles for publication. Or, like me, research and write blog posts on the issues. Talk with your friends and colleagues.

Fellow Minnesotans should contact me to join Minnesotans for U.S.-Cuba Reconciliation. Citizens in other states, I hope, will organize similar groups.

I also invite comments to this post with corrections or additional facts and sources regarding the American people’s reactions to this important change in our country’s relations with Cuba.

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[1] Edwards-Levy, Polls Show Support for U.S. To Re-Establish Ties with Cuba, Huff. Post (Dec. 18, 2014); Dugan, Americans on Cuba: For Normalized Relations, but Party Divide Exists, Gallup (Dec. 18, 2014). 

[2] Holyk, Poll Finds Broad Public Support for Open Relations with Cuba, abc News (Dec. 23, 2014).

[3] Fuerte, Prominent USA personalities Urge Obama to Deepen Relationship with Cuba, Havana Times (Jan 19, 2015). The signers of the letter included Bruce Babbitt (former Governor of Arizona and former U.S. Secretary of the Interior), Harriett Babbitt (former U.S. Ambassador to the Organization of American States), Samuel Berger (former U.S. National Security Advisor), Chet Culver (former Governor of Iowa), Francis Fukuyama (Stanford University), Dan Glickman (former U.S. Congressman and former U.S.Secretary of Agriculture). Thomas Pickering (former U.S. Ambassador and former U.S. U.S. Under Secretary of State for Political Affairs), Bill Richardson (former Governor of New Mexico and former U.S. Ambassador to the U.N.), Ken Salazar, former Colorado Attorney General, former U.S. Senator and former U.S. Secretary of the Interior), George Schultz (Former U.S. Secretary of State, Treasury and Labor) and Strobe Talbott (former U.S. Deputy Secretary of State).

[4]  The Summit will be at at the University of Minnesota College of Continuing Education, Room 135, 1890 Buford Avenue, St. Paul, MN 55108. It is free and open to the public. Please RSVP to Clara_Haycraft@Klobuchar.senate.gov.