Are There Any Significant Market Opportunities in Cuba?

March 23, 2016 12:00 PM

President Barack Obama this week became the first president to visit Cuba since Calvin Coolidge. The end goal: An easing of trade restrictions that have lasted decades. But will that really lead to new market opportunities for U.S. agricultural goods?

The fact that Secretary of Agriculture Tom Vilsack is also on the trip is a good indicator. In fact, Vilsack on Monday announced that USDA will begin sharing agricultural research, market information and more with Cuba. 

"Recognizing the importance of agriculture in the United States and Cuba, USDA is advancing a new partnership for the 21st century between our two countries," Vilsack said in a statement. "...The agreements we reached with our Cuban counterparts on this historic trip, and the ability for our agriculture sector leaders to communicate with Cuban businesses, will help U.S. agricultural interests better understand the Cuban market, while also providing the Cuban people with science-based information as they grow their own agriculture sector."

Those against opening trade with Cuba argue the morals of dealing with a Communist country. But others, such as Lee Ann Evans, senior policy advisor with Engage Cuba, says that this policy is increasingly antiquated and unnecessary.

“Cuba has been strangely a country that we treat differently for reasons that are no longer legitimate,” she says.

President Obama has done what he can while still fulfilling the law, Evans says. However, unlike most sanctions, the Cuba sanctions were codified into law in 1996, so it will require legislative action to become undone.

Doing so could have positive economic consequences for U.S. agriculture, Evans says. The U.S. supplies around 80% of agricultural imports to most other Caribbean nations.

“We’re looking at about a $2 billion import market on average,” she says.

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According to USDA, commodities with the highest upside include poultry, wheat, corn, rice and dairy. Many commodity groups have publicly supported an end to the embargo.

"Trade between Cuba and the U.S. is a win-win situation primarily because of the close proximity to one another," says Kansas farmer and president of U.S. wheat associates Ron Suppes. "Fifty years is a long time. It is time to drop the embargo."

Should the Cuba embargo be lifted or remain intact? Let us know in the comments.

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