A closer look at increasing trade with Cuba

A conversation with…

John Linder, Trade Policy and Biotech Action Team Chairman for the National Corn Growers Association who recently traveled to Cuba

OCJ: What was the purpose of your recent trip to Cuba?

John: As the Trade Policy and Biotech Action Team Chairman for the National Corn Growers Association, my role was to represent the U.S. corn farmer on the U.S. Agriculture Coalition for Cuba’s recent mission to Cuba to elevate the goal of normalized trade relations and to expand the market for US corn.

OCJ: What are the latest updates with regard to Cuba and the potential for trade?

John: According to the U.S. Grains Council’s most recent data, Cuba has an appetite for 35.4 million bushels of imported corn annually. The U.S. as a supplier of that corn peaked in 2008 at 31.4 million bushels and has declined from there to the most recent purchase of U.S. corn being 7.9 million bushels on an annual basis. The U.S. corn farmer’s fall from the preferred supplier position is likely because we are not competing on level playing field. For example, the U.S. is a “cash before delivery” supplier as a result of bilateral trade restrictions that other competing countries do not have. Because of the embargo, the U.S. cannot purchase any other goods from Cuba, which leaves a complete imbalance from selling and not trading. Our competitors are in the corn trade arena with Cuba, giving them a distinct advantage.

OCJ: Specifically for agriculture, how could U.S. farmers benefit from a trade deal with Cuba?

John: Cuba has the need for corn and corn products, soybeans and soy products, wheat, rice, dairy products, meat and poultry products. If travel restrictions are lifted, travelers tend to demand a relatively full plate of food options, which may springboard a lift in food and feed products as well as goods beyond food to meet that traveler’s needs. Bilateral trade could highlight our ability to shine. Commodities are only two days water transit to Cuba from the U.S., so we are a perfect choice for becoming a preferred provider.

OCJ: How do these types of international efforts impact you on your farm?

John: First, corn is a fungible commodity and any corn shipped to Cuba from anywhere in the U.S. benefits Ohio corn farmers through increased demand. In addition, the Ohio corn farmers have a vested interest through their check-off investment in a partnership with the U.S. grains Council. The U.S. Grains Council has been working with Cuba on our behalf since before 2000. Because of those efforts, the United States. was the dominant supplier of corn up until 2009-2010 when the competing countries started taking over the corn market. The U.S. Grains Council has also helped the U.S. move DDGs into Cuba from the United States as well. According to the U.S. Grains Council, with normalized trade relations, a move from cash up front to more normal credit environment could play a big role in the U.S. becoming competitive again.

OCJ: While in Cuba, what was on the agenda?

John: Sunday was a full day of travel with a few hours for a brief bus tour taking us into Havana next to the original port and a short walk in the Plaza de la Revolucion, Old Havana.

On Monday morning, our group of nearly 100 met with four Cuban Officials: the Director of North American Affairs, Ministry of Foreign Investment and Economic Cooperation; the Director of International Relations, Ministry of Agriculture; the Director of International Relations, AZCUBA (Sugar Enterprise); and the Director of International Relations, ANAP (National Association of Small Famers).

Tuesday our group divided up into smaller field tour groups and traveled into the countryside. Tour groups went to a variety of locations including sugar cane and processing, pork and cattle production, farmer cooperative farms, tobacco farms and aquaculture. I attended the aquaculture tour in the Bay of Pigs. It is a very high-tech venture in partnership with Norway. Cobia fish production is being researched in Cuba’s pristine open waters.

Wednesday morning we reconvened as a group to discuss the tours collectively (with the same officials as Monday) to garner all that we could from the individual tours.

OCJ: What were some interesting things you learned on the trip?

John: The real economic value of bilateral trade to both parties was enlightening. I was not prepared to see cattle pulling plows while the Soviet tractor in the corner of the field was kept from being taken over by weeds in hopes of some year having the repair parts to use it again. That represented opportunity in manufacturing in the U.S. for equipment and parts. The land was well kept. Some pastures were quite rocky while some fields looked to be quite productive in potential. They also had irrigation for crops and cooperative farmers with democratically elected leaders, some of whom are women. And yes, they have crop insurance too.

OCJ: How was the food? What was your favorite thing to eat?

John: The food was very good in the restaurants and the hotel. They like to keep the impressions high for tourism. They do take pride in what they deliver. Pork, beef and poultry were fine but I definitely lean toward the fresh seafood! Tropical fruits were delicious and fresh vegetables did not disappoint anyone.

OCJ: What were some of the questions you got from the Cubans?

John: As you might have expected, while on my aquaculture tour, we likely had more questions for the industry representatives than they could have had for us. The dialogues on the other tours were more like conversations. As an example, former Agriculture Secretary John Block toured a hog farm that was producing the same breed of hogs that he and his family produce at home — Yorkshires. I heard it mentioned that that dialogue might have been much like that at home between like-minded colleagues; it could have continued into the evening!

OCJ: What are their thoughts on the ongoing situation between our two countries?

John: Congress will decide.

OCJ: What are the key things farmers in Ohio should know about Cuba?

John: We have opportunity. If the U.S. can recapture the Cuba corn market, they have the potential to be our 12^th largest export market for corn. That can add stability to our Ohio job market. We rank 5^th in this nation’s corn production. Ohio uses 60% of its corn production in state to meet the needs of our livestock industry and the ethanol industry, but the remaining 40% needs a home as well. Never before has the corn industry produced so much corn on so few of acres. A balance of markets is what is needed.

Shortly after Linder’s return, the Ohio Ag Net’s Dale Minyo sat down to chat extensively about the trip and Linder’s takeaways from the Cuban excursion.