U.S. rice interests have eye on Cuba

Legislation urged to ease exports

By Cristina LaRue / Arkansas Democrat Gazette

USA Rice and industry leaders are seeking legislation to remove barriers to U.S. trade with Cuba to ease the way for U.S. rice exports to the island nation.

The groups are members of the U.S. Agriculture Coalition for Cuba, a group that supports improving agricultural trade between the U.S. and Cuba.

“USA Rice wants a piecemeal approach to be taken both administratively and legislatively to ease current restrictions on trade, travel, financing, etc., so that Cuba can grow its economy and become a reliable commercial importer of U.S. rice once again,” USA Rice’s Vice President of Policy and Government Affairs Peter Bachmann said Monday.

“However, any legislative action that liberalizes the U.S.-Cuba relationship is seen as very contentious among a bipartisan group within Congress because of the political implications for South Florida and Miami, where there’s a dense Cuban and Cuban-American population. This makes passage of legislation difficult with a Democrat majority in Congress and close to impossible with a Republican majority.”

Bachmann noted President Joe Biden’s administration has not prioritized relations with Cuba as President Barack Obama did.

“Regardless of whatever administrative actions are taken, congressional action to allow for financing and/or lifting of the embargo are necessary for normal commerce to resume,” Bachmann said.

Major rice consumer Cuba was once a top market for U.S. rice exports, and Arkansas grows nearly half of all rice produced in the U.S.

Cuba now imports rice from Asian and South American countries, according to a recent USA Rice news release.

Cuba can currently buy U.S. rice legally if the importer pays in cash up front and uses a third-country bank, such as the Bank of Canada, as an intermediary to allow the exchange of any money, per the Trade Sanctions Reform and Export Enhancements Act of 2000.

The requested legislation would allow U.S. banks to directly provide financing for Cuban buyers and help U.S. exporters compete for better credit terms.

Cuba is facing increasing economic pressures brought on by the pandemic.

Cubans are experiencing shortages of food, energy, medicine and fuel, and recent protests spurred Biden to issue a statement about three weeks ago calling on the nation to respect the right to peaceful protest.

Cuba’s economy is recovering gradually and should show growth this year, but the country’s economy is still 7.3% below where it was in 2019, per a July 21 Reuters report.

The U.S. imposed an arms embargo against the country in 1958 in the wake of the Cuban Revolution, Fidel Castro’s rise to power and the establishment of a Socialist state in Cuba. President John F. Kennedy’s administration imposed an all-encompassing trade embargo in 1962.

The U.S. trade embargo cannot be lifted without Congressional approval and remains in place today.

President George H.W. Bush increased U.S. economic sanctions against Cuba in 1992 following the collapse of the Soviet Union, but offered a path to normalizing relations via significant political and economic reforms, according to the Council on Foreign relations, an independent nonpartisan think tank.

The U.S. embargo was further tightened and codified in 1996, penalizing foreign companies that do business with Cuba.

Obama eased restrictions on travel and remittances in 2009, in a move considered the most notable step toward normalizing relations with the country to date.

The Cuban government approved several economic reforms in 2011.

Obama and Raul Castro announced plans to restore full diplomatic ties after a prisoner exchange in 2015, though the Republican-controlled Congress at the time vowed to uphold the economic embargo.

In 2015, Gov. Asa Hutchinson called for Arkansas to position itself to export goods like rice and poultry to Cuba, as Congress considered ending the 50-year-old trade embargo with the nation. In 2016, Arkansas Rice Federation members traveled to Cuba to discuss the future of trade. Then, in 2017, President Donald Trump announced he would reinstate travel and business restrictions.

In May, Biden eased Trump-era sanctions against Cuba, focusing on expanding travel and making it easier for families to visit relatives in the country.