Burt Hanna saw just one candle when he joined Gov. Asa Hutchinson's recent economic development mission to Cuba.
Hanna, president of Hanna's Candles in Fayetteville, made the trip because he's interested in locating a manufacturing facility in Cuba. What he found, he said, was a country that lacks the underpinnings of a modern economy.
"It's like going back 100 years in America," he said. "I don't know where you would find a hammer, a saw or a screwdriver."
Mark Simmons, chairman of Simmons Foods, the Siloam Springs-based poultry producer, came away from a visit to a Cuban grocery store with a similar impression.
"There was a lot of white space on the grocery store shelves where they didn't have product," Simmons said.
Hutchinson has predicted Arkansas eventually will become a "trading partner of significance" with Cuba but cautioned that it will take time to develop normal commercial ties between Cuba and the United States. Hanna's Candles is not the only nonagriculture Arkansas business with an interest in Cuba. And the state's rice, poultry and pork producers are especially keen to take advantage of improving relations between the two countries.
Even under the limitations of the longstanding U.S. embargo, companies based in the United States export hundreds of millions of dollars' worth of food, health care products and agricultural commodities to Cuba each year. But current federal law prohibits financing exports to Cuba and requires upfront cash payments, hampering the ability of farmers and ranchers to increase sales.
President Barack Obama has called on Congress to lift the embargo, but the White House has acknowledged that is unlikely to happen anytime soon because of opposition from Republican lawmakers who argue President Raul Castro's government is a brutal dictatorship that should remain isolated.
In the interim, Hutchinson said, Congress should authorize credit sales to cash-poor Cuba and the Cuban government should overhaul its centralized economy. The benefits of increased trade, the governor said, could pave the way to greater political freedom for Cuban citizens.
That's not a message the Castro government is likely to welcome, said John Kavulich, president of the U.S.-Cuba Trade and Economic Council, a nonprofit research organization in New York.
Indeed, Castro said last month at the United Nations that relations between the two countries wouldn't be fully normal until the U.S. lifts the embargo, returns Guantanamo Bay to Cuba and stops trying to undermine the Cuban government.
Kavulich said Castro's deep distrust of the U.S. government and U.S. business isn't likely to change quickly.
Kavulich noted the value of U.S. food and agricultural exports to Cuba fell from $710 million in 2008 -- the last year the U.S. sold meaningful quantities of rice to the Castro government -- to $291 million in 2014.
The trend continues this year, with food and agricultural exports down 40 percent to date compared with 2014, Kavulich said.
Cuba reduced its purchases from U.S. companies to punish them for failing to persuade Congress to loosen the restrictions on trade, Kavulich said.
Arkansas produces about half the rice the U.S. exports, so the impact on the state's growers and processors can be significant. In the 2007-08 market year, the last period when more than a token amount of rice was sold to Cuba, the U.S. exported about 9,700 tons on a milled basis to the island, according to the U.S. Department of Agriculture. That was down from a high of almost 198,400 tons in the 2003-04 market year, USDA said.
Currently, U.S. experts agree, Cuba imports about 551,000 tons of rice annually.
Much of that rice comes from Vietnam, which allows Cuba to finance its purchases for up to two years.
Greg Yielding, executive director of the Arkansas Rice Growers Association, was not part of Hutchinson's delegation but has been to Cuba. He said he believed U.S. companies would extend credit to Cuba on terms they found acceptable if the federal restriction is lifted.
"It's a huge market," Yielding said. "They eat a lot of rice."
Terry Harris, senior vice president of marketing and risk management at Stuttgart-based Riceland Foods, did not join Hutchinson's trip but has visited Cuba in the past. He said his company would never give two years' credit to any customer and conceded U.S. rice is more expensive than rice from Cuba's traditional suppliers.
However, he said U.S. producers have advantages of their own. Rice can be transported to Cuba much more quickly from the United States than from Asia. In addition, Harris said, U.S. rice can be shipped on small vessels that are able to enter ports other than Havana, which cuts ground transportation and storage costs for the Cubans.
In addition, Harris said, the Cuban government wants to export products such as rum, citrus fruit and cigars to the United States, which may make it more amenable to paying higher prices for high-quality U.S. rice. Cuba also is eager to entertain American tourists, another source of hard currency, Harris noted.
"And certainly a lot of Americans want to visit Cuba because it's been forbidden for so long," he said.
Mike Preston, director of the Arkansas Economic Development Corporation, said increased American tourism would give Cuba another incentive to buy the high-quality U.S. products those tourists would expect.
Simmons, whose company sold chicken products to Cuba before trade between the two countries dried up, said he joined Hutchinson's delegation because he wanted to re-establish the company's relationships with Cuban officials. But he agreed that normalizing commerce between the two countries would take time.
"The people in charge are not really, at this point, ready to embrace a free market economy," Simmons said. "That's not really surprising considering where they've come from. It may be a slow process."
Melanie Wells, co-owner of ETW Enterprises, which sells poultry bedding among other products, said officials she met in Havana seemed mostly interested in joint-ventures that would be controlled by the Cuban government.
"They're not quite ready for the type of business that any of us in the U.S. would want," Wells said.
Robert Coats, extension agricultural economist for the University System Division of Agriculture, said the political leaders of both the United States and Cuba have good reason to overcome their philosophical differences.
"The global economy is extremely weak right now," Coats said. "That creates economic, energy, food and homeland security issues for every country in the world."
Russia's invasion of Crimea and military presence in Syria alarm Washington, Coats said, while Cuba has lost some support from longtime patrons Venezuela and Brazil that are suffering their own economic woes.
"We [both] need neighbors around us that are friendly to us in a world that's very unstable," Coats said.
SundayMonday Business on 10/11/2015