Cuba would be able to use credit to buy U.S. agricultural products such as rice and chicken under legislation introduced Wednesday by U.S. Sens. John Boozman, R-Ark., and Heidi Heitkamp, D-N.D.
U.S. rules require Alimport, the state-owned firm that controls Cuba's agricultural imports, to pay cash for its purchases. The legislation offered by Boozman and Heitkamp would allow private banks and companies to offer credit terms for agricultural exports to Cuba.
Boozman said that even though Arkansas farmers would benefit by being able to export to Cuba, they must first deal with commercial barriers that resulted from federal laws restricting trade and financing, as well as tourism and other commercial activities, with the island nation.
"Cuba represents a remarkable opportunity for American farmers, and it's also an opportunity for Cubans to gain access to safe, affordable and high quality agriculture products from the United States," Boozman said in a release about the legislation.
Heitkamp said U.S. growers should be allowed to enter the Cuban market and compete on an equal footing with producers from other countries.
"The biggest obstacle in that effort involves private companies and banks not being able to provide credit to export agricultural commodities to Cuba where these crops are in high demand," Heitkamp said.
The legislation, titled the Agricultural Export Expansion Act, comes one day after a hearing before the Senate Agriculture, Nutrition and Forestry Committee on how easing the trade embargo would help U.S. farmers and ranchers.
Terry Harris, vice president of Stuttgart-based Riceland Foods Inc., testified that the Cuban officials he's spoken to aren't interested in purchasing U.S. rice right now. He attributed that to their overall desire to end the trade embargo that's been in place since 1960, when the country was the No. 1 export destination for U.S. rice.
Arkansas produces just more than half of the nation's rice crop.
The U.S. Census Bureau estimates that in 2014, Arkansas' exported goods were valued at $6.8 billion to markets around the world, including chicken meat and parts worth $213 million as well as rice valued at $180 million. North Dakota exported agricultural commodities totaling $4.1 billion.
Arkansas rice growers produced 5.6 million tons of rice in 2014 -- 50.6 percent of the 11.05 million tons produced nationally, according to the U.S. Department of Agriculture. Of that, about 5.25 million tons will be exported.
Cuba buys most of its rice from Asian sources, mostly Vietnam. As some of the world's largest rice exporters, U.S. producers are hoping their rice will be more competitively priced because of reduced transportation costs. Cubans also prefer the long-grain variety of rice primarily grown in Arkansas.
Arkansas Rice Farmers Chairman Dow Brantley of Lonoke said Boozman's bill would open credit options for rice producers and remove a trade barrier with Cuba.
"I hope that Congress will see the financial logic in passing it," Brantley said. "It costs the U.S. nothing and provides us with opportunities in an emerging export market for agriculture."
In its latest Poultry Highlights report, released in May, the USDA's National Agricultural Statistics Service said poultry and eggs were the largest agricultural products produced in the state in terms of cash receipts in 2012, bringing in $3.7 billion, or 40 percent of the $9.4 billion in cash receipts from all agricultural products produced in Arkansas that year.
And, Arkansas ranked second only to Georgia nationally in the value of commercial broiler production in 2013, $3.6 billion to $4.6 billion, respectively.
In January, Boozman and other senators sponsored a bill to lift restrictions on Americans who want to travel to Cuba.
Boozman spokesman Patrick Creamer said in an email that the senator hasn't spoken to the Obama administration about the bill. But, sponsors are anticipating its support, given the president's desire to normalize relations and increase trade with Cuba.
Two other senators, Tom Udall, D-N.M., and Jeff Flake, R-Ariz., have signed on as co-sponsors. Creamer said more co-sponsors are expected now that the text of the law is available.
Creamer said it's too soon to predict how the measure will be received in the House if it gets through the Senate.
While "some resistance" is to be expected in both chambers, he said senators and representatives are starting to see a need to change the U.S.-Cuban relationship.
U.S. Rep. Rick Crawford, R-Ark., said he's working on similar legislation to open up Cuba to U.S. agricultural products.
Crawford, whose 1st Congressional District includes many of the state's eastern Delta counties, said producers currently can't take advantage of the Cuban market.
"I greatly appreciate Sen. Boozman's leadership in tackling this issue in the Senate by putting forward a legislative solution," he wrote in an email statement. "By working together to solve this problem, we hope to find a solution that gains bipartisan support and provides the tools exporters need to gain access to a valuable market for our producers."
Business on 04/23/2015