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.

 

GOP Senators Continue To Flirt with Filibusters

This past January U.S. Senate Majority Leader Harry Reid refused to press for adoption on a simple majority vote (at least 51 of the 100 Senators) of significant, but still flawed, reforms of the body’s filibuster rule. Instead Reid and Minority Leader Mitch McConnell agreed to much weaker changes to the rule. Past posts have expressed my dissatisfaction with this rule and the recent change.

As a result, the Senate and the U.S. are still facing threatened filibusters by Senate Republicans over confirmation of presidential nominations.

Chuck Hagel
Chuck Hagel

The most recent example is the nomination of Chuck Hagel to be Secretary of Defense.

Yes, on February 26th the U.S. Senate did vote, 71 to 27, to invoke cloture and end debate on voting on confirmation of this nomination. The 71 votes came from 53 Democratic, 2 Independent and 18 Republican Senators, including Senators John McCain and Lindsay Graham, who continued to be severe critics of Hagel. (Two Democratic Senators did not vote: Mark Udall and Frank Lautenberg.)

Later that same day the Senate voted, 58 to 41, to confirm Hagel for this position. For this vote, only four Republican Senators were in the majority: Senators Thad Cochran, Mike Johanns, Richard Shelby and Rand Paul. (Senator Lautenberg did not vote.)

While I am pleased that there was no prolonged filibuster of this nomination and that the  Senate did vote on confirmation, getting there, in my opinion, was needlessly prolonged and again demonstrated the dysfunctionality of the Senate. Here are some of the reasons for that opinion:

  • In early February Democratic Senator Carl Levin, the Chairman of the Armed Services Committee, delayed a committee vote on the nomination in an attempt to garner support for same from some of the Republican committee members.
  • On February 14th, the Senate failed by one vote to invoke cloture, 59 to 40 (Majority Leader Harry Reid later switched his “Yes” vote to “No” so he could later move to reconsider cloture).
  • Republican Senators Lindsay Graham and James Inhofe had put “holds”on the nomination and thereby prevented a vote on confirmation; Graham wanted more information from the Administration about the Benghazi attack (in which Hagel had no involvement) while Inhofe fomented that Hagel was anti-Israel.
  • Chris Cillizza, a Washington Post columnist, reported that Republicans were voting against cloture because there were no political risks from doing so; they said they had legitimate doubts about Hagel’s ability to lead the Pentagon; and resistance was a Republican rallying cry.
  • Another Washington Post columnist, Jonathan Bernstein, stated that Republican Senators are insisting on a 60 vote requirement for virtually everything because many of them see no difference on cloture and substantive voting and do not require extraordinary reasons to vote against cloture.
  • Senator McCain said that one of the reasons for Republican opposition to Hagel, their former Republican Senate colleague, was his very vocal criticism of President George W. Bush over the Iraq war.
  • Some Republican Senators were opposed to Hagel for allegedly receiving money from a group called “Friends of Hamas” — a rumor that started with a joke about a nonexistent group.
  • On February 15th 15 Republican Senators wrote a joint letter to President Obama asking him to withdraw the Hagel nomination.
John Brennan
John Brennan

This dysunctionality is not over with the confirmation of Hagel. Senator McCain has threatened a similar GOP strategy with respect to confirmation of John Brennan as Director of the CIA.

Jacob J. Lew
Jacob J. Lew

On the other hand, the Senate on February 27th confirmed, 71 (including 20 Republicans) to 26, the nomination of Jacob J. Lew for Secretary of the Treasury.

And on February 25, 2013, the Senate confirmed, 93-0, Robert Bacharach to be a judge on the U.S. Court of Appeals for the District of Columbia Circuit. He, however,  had been appointed to that position in January 2012, and in the last Congress, in July 2012, clouture was defeated, 56-34.

All of this silliness over Chuck Hagel and potentially over John Brennan would have been prevented if the Senate this past January had adopted more significant reform of its rules regarding filibuster.