Sens. Michael Bennet (D., Colo.) and John Boozman (R., Ark.) introduced the Agricultural Export Expansion Act (S. 1447), legislation that would make it easier for American farmers to sell their goods to Cuba by removing restrictions on private financing for U.S. agricultural exports to the island nation.
Cuba imports about $2 billion in agricultural products annually. However, due to the U.S.'s cash-in-advance requirement, Cuba is left with little choice but to turn, instead, to international competitors like the European Union, Brazil and Vietnam. U.S. agricultural exports to Cuba have declined every year since 2009 in terms of dollar amount, market share and the variety of products shipped. The Congressional Budget Office estimates that lifting these limits on farmers through the proposed legislation would save U.S. taxpayers $690 million over 10 years.
The 2018 farm bill took steps to help American agriculture access the Cuban market by allowing funding for U.S. Department of Agriculture export programs that promote use of U.S. agricultural products in Cuba.
However, the biggest barrier for producers as they seek access to Cuba is the Trade Sanctions & Reform Act (TSRA) prohibition on providing private credit for those exports, which forces Cuba to pay with cash up front for American-grown food.
As a result, U.S. farm goods have become less competitive, and Cuba has turned to other countries that are able to directly extend credit to Cuban buyers for transactions. This bill would amend TSRA to allow private financing of agricultural exports and level the playing field for American farmers competing in the global market.
“We’ve heard loud and clear that American farmers and ranchers want the opportunity to compete and sell their product around the world, including in the Cuban market. Despite our progress in the 2018 farm bill, existing trade restrictions with Cuba continue to put our farmers and ranchers at a disadvantage,” Bennet said. “This commonsense bill would unlock new market opportunities for Colorado farmers and ranchers who have a tremendous amount to gain from competing in the Cuban market.”
“Arkansas farmers need new markets, and one solution is sitting less than 100 miles off our coast. Cuba imports 80% of its food, but Americans start out at a disadvantage since private financing is not allowed. Our bill removes this barrier, allowing our agricultural producers to compete while simultaneously exposing Cubans to American ideals, values and products. It’s a small step, but one that can yield big dividends for American farmers and the Cuban people,” Boozman said.
The Senate's Agricultural Export Expansion Act follows the introduction in March of House companion bill H.R. 1898, the Cuba Agricultural Exports Act, by Reps. Rick Crawford (R., Ark.) and Cheri Bustos (D., Ill.).
In the last Congress, Bennet co-sponsored the Agricultural Export Expansion Act of 2019 after traveling to Cuba to discuss future opportunities for U.S.-Cuba cooperation on a range of topics, including foreign trade. The Senate Appropriations Committee approved the bill as an amendment to a financial services spending bill in both 2015 and 2016. This latest bill builds on Bennet's previous efforts to enhance the relationship between Cuba and Colorado, which include launching a statewide council that would work to open trade opportunities to Cuba and end the travel ban.
Bennet is a co-sponsor of two bills -- the Freedom to Travel to Cuba Act and the Freedom to Export to Cuba Act -- that would eliminate travel restrictions and allow businesses to work directly with Cubans to finance and ship purchases of American-made products.
Dale McCall, president of Rocky Mountain Farmers Union, said, “We believe the Trade Sanctions & Reform Act of 2000 and the Market Access Program and Foreign Market Development Program in the 2018 farm bill are tools that create a win-win situation if the Agriculture Export Expansion Act of 2019 becomes law. Together, these policies will create a flow of western and American agricultural products that will benefit both countries and lift the ban on U.S. private banks and companies from offering credit for the export of agricultural commodities to Cuba.”
The Colorado Association of Wheat Growers said it supports this bill because it would remove the only real barrier for selling wheat to Cuba.
“Cuba is a natural market for our high-quality hard red winter wheat that already gets exported out of the Gulf and travels right by them on the way to other far-flung countries,” Brad Erker, executive director of Colorado Wheat, said. “I traveled to Cuba in 2017 and sat down with their main government wheat buyers. It was obvious when talking to them that they will buy the kind of wheat we can grow in Colorado at the prices we need to charge. The only thing holding them back was the financing.”