Experts share timely insights and findings on topics pertaining to U.S.-Cuba relations, Cuba, and the region
Dear Friends,
In lieu of our regular U.S.-Cuba News Brief, we will be sharing interviews with experts on various topics pertaining to U.S.-Cuba relations and Cuba throughout the remainder of the summer.
This week, we interview Paul Johnson, Chair of the U.S. Agriculture Coalition for Cuba (USACC) and Partner at FocusCuba Consulting, about the current state of U.S.-Cuba agricultural relations, engaging with Cuba’s agriculture cooperatives and private sector, Cuba’s food crisis, and more.
*The views and opinions expressed by the interviewees are their own and do not necessarily reflect the views or positions of CDA.
Question 1: You have served as the Chair of the United States Agriculture Coalition for Cuba, an organization dedicated to promoting bilateral agricultural trade between the US and Cuba, since its founding in 2014 and recently traveled to Havana for a U.S.-Cuba Agriculture Business Conference in April.
What’s the current status of U.S.-Cuba agricultural relations? What does the market in Cuba look like for U.S. businesses in 2023?
PAUL: Agricultural relations between the two countries are inadequate. The will exists amongst citizens on both sides to do more, but U.S. law restricts deeper engagement. We export food, but do not import food or invest in Cuba’s agricultural infrastructure, which would both increase their production and create economic opportunities for U.S. business. Our work in building agricultural relations is done on the margins rather than at the core, which is frustrating. Nonetheless, we do what we can to deepen relations with
Cuba’s agriculture cooperatives and private sector, protect our shared natural borders from the risks of animal and plant diseases, and create new opportunities for U.S. agricultural producers, exporters, and investors.
Agriculture exports to Cuba increased last year to $320 million, the highest point in the last ten years. I expect that figure to increase this year given the surge of private sector sales, but the full potential of trade between both countries is far from being realized. We export about 15 percent of what Cuba purchases from agricultural suppliers around the world. That figure could easily be closer to 60 percent if U.S. agriculture were able to compete by offering credit on export sales and expanding U.S. Department of Agriculture (USDA) programs that we traditionally use to enter markets around the world but cannot use in Cuba.
The bright spot is the growth of Cuba’s private sector and its ability to purchase agricultural goods from U.S. suppliers. We are shipping containers of food weekly to Cuba and that new lane of trade has great potential. If our government were to broaden that opportunity by permitting closer banking relations and investment it would lead to increased trade and the growth of Cuba’s private sector.
Question 2: Before 1960, Cuba was the ninth-largest export market for U.S. agricultural products, however, as of 2021, Cuba accounted for less than 1 percent of U.S. agricultural exports. Currently, Cuba relies on imports for 80 percent of its food supply, spending approximately $2 billion USD annually on importing food.
Why can’t U.S. agro-businesses tap into the Cuban market? What impact do U.S. sanctions on Cuba have on U.S. farmers and agricultural businesses currently? Are there particular agricultural products in high demand in Cuba that U.S. farmers could tap into?
PAUL: There are a number of obstacles to increasing our market share. The two largest obstacles are U.S. policy and Cuba’s economy. You can’t expect to increase trade opportunities in a country that you have listed as a state sponsor of terrorism and that you have been embargoing for sixty years. Cuba’s economy is also struggling, and resources to manage essential infrastructure in Cuba are depleted. Nonetheless, Cuba does import nearly $2 billion in food annually from suppliers around the world, and the US could certainly increase its share given the logistical advantages. It’s faster to ship a container of food from the US to Cuba than it is from the European Union (EU), China, or even Brazil. But strict U.S. regulations on trade with Cuba make it overwhelmingly onerous for many companies to engage Cuba commercially. Whether those are cash-in-advance stipulations on food export sales, or even traveling to Cuba to carry-out regular communications with counterparts, it’s possible but difficult and that eventually leads to institutional and corporate fatigue.
Certainly, permitting two-way trade would present new opportunities for both Cuban producers and U.S. buyers. If we were allowed to invest in Cuban agriculture to help improve production, there would be a range of goods that would be of interest to U.S. consumers. These include tropical fruits, organic vegetables, aquaculture, coffee, and of course rum and tobacco. Tobacco is a good example of our unimaginative policy. It makes all the sense in the world to permit the import of Cuban cigars; there is a ton of demand and those sales would improve the wealth of Cuban tobacco growers while increasing their purchasing power to buy more U.S. goods. The tobacco growers in Cuba are private cooperatives and would benefit from any sales to the US. But even the obvious steps to improve U.S.-Cuba agricultural trade are dismissed for political rather than economic reasons.
Question 3: As the island faces an economic crisis, Cuba is experiencing immense food shortages and increasing food prices. Although Cuba has said it would prioritize domestic food production in 2023, it has struggled to ramp up such production, and failed to do so from 2021 to 2022.
Given your experience here and working in Cuba, what changes do you believe Cuba could implement to address its food crisis (generally speaking)? What role could U.S. farmers and agricultural businesses play in overcoming the island’s current food crisis and supporting food sovereignty in Cuba?
PAUL: Production is down across the board in Cuba. Poor management, lack of incentive, technology depletion, substandard warehousing and transportation, and lack of basic inputs such as feed and fertilizer have led to sharp declines in agriculture production. Recent changes to give more autonomy to local provinces as well as the ability of the private sector to compete with state enterprises is a move in the right direction, but they haven’t gone far enough. For example, they could replace the state enterprise Acopio that is responsible for purchasing and collecting production with a more efficient private company or cooperative. They could also increase investment in local agriculture rather than vacant hotels. Clearly the president of Cuba wants to open up more space for markets within Cuba’s economy and work closer with the US; however internal challenges within Cuba’s bureaucracy hinder turning this vision into reality. The US could play a role here, by engaging the private sector including agriculture cooperatives through training, resources, and opportunities for export. This would buoy those within the country who want market reforms and help Cuba increase local production.
Food security is a concern in Cuba. The long-term consequences of poor nutrition are devastating. Cubans are still coping with the health impacts of the mid 1990s so-called Special Period, and the health effects of today’s food shortages will impact Cuba’s youth for decades to come. The daily challenges of Cubans to find sufficient food have increased the number of people leaving the country. I was in Cuba last week, and food prices at local agriculture markets are up, while rations are significantly down. For example, purchasing a pound of pork would consume about 10 percent of a Cuban’s average monthly wages. Rations of poultry meat are down to one pound per person monthly, and only five eggs per person per month. The food situation is spiraling out of control for average Cubans. The government has fewer capital reserves to purchase needed food imports, or inputs to increase production such as fertilizer, seed, and animal feed. Climbing out of that trend will require an increased role of Cuba’s private sector along with U.S. policy changes to support their growth. Specifically, the Biden administration should allow USDA to engage its counterparts in Cuba. Foreign agriculture officers and plant and animal health specialists stationed on the ground in Cuba would improve communication, understanding, and trust, and lead to increased opportunities. We also need a general license from the U.S. Treasury to invest in Cuban agriculture production, infrastructure, and two-way trade. This would include fixing the problems of banking relations which make it unnecessarily difficult for capital to flow between the U.S. and Cuban private sectors.
Question 4: Exchange between the US and Cuba on farming and agriculture have historically persisted regardless of the state of broader diplomatic relations between the US and Cuba.
In what ways does this type of collaboration contribute to or influence broader diplomatic relations between the two countries?
Paul: Agriculture is a national concern for every country, and the base for economic growth and political stability. Eleven million Cubans need to eat every day. That basic need provides an opportunity to touch the lives of each Cuban, every day. We have a choice: we can either help or hinder, lay blame or solve problems that directly benefit Cuban citizens. The US stands as the most powerful and wealthy country in the history of humankind. We could solve food and medicine shortages in Cuba that would save lives and positively influence the relations between our two countries. Or we could continue to lay blame and spend resources on destroying Cuba’s economy. It’s a matter of how we view the role of the US in the world and our intentions of either changing the status quo or keeping it as is. It is easy to do the latter and claim to support the Cuban people even when their suffering increases. What’s hard is to put aside differences and constructively work to help people, no matter their political views. That magnanimity, generosity, practicality and grace is what I want our country to strive for. If you really care about Cuba and want to support the Cuban people, then you need to roll up your sleeves and do the hard work of engagement. Embargoes, slogans, and harsh rhetoric may play well in local constituencies, but they fail to embrace the broader interests of both the US and those living on the island.
Not to say that there are no common interests within the extremes of our Cuban policy. We all want to see an independent judiciary, press, and greater opportunities for Cuban citizens. We all want to support the Cuban people, but our imbalanced present policy towards Cuba does not achieve the desired results. If we have the ability to solve a problem and reduce suffering but don’t act on it, then we have failed ourselves and the Cuban people.
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