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AMERICAN AGRICULTURAL TRADE WITH 

CUBA

HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTEENTH CONGRESS

SECOND SESSION

SEPTEMBER 14, 2016

Serial No. 114–57

(

Printed for the use of the Committee on Agriculture 

agriculture.house.gov 

COMMITTEE ON AGRICULTURE 

K. MICHAEL CONAWAY, Texas, Chairman 

RANDY NEUGEBAUER, Texas, 

Vice Chairman 

BOB GOODLATTE, Virginia 

FRANK D. LUCAS, Oklahoma 

STEVE KING, Iowa 

MIKE ROGERS, Alabama 

GLENN THOMPSON, Pennsylvania 

BOB GIBBS, Ohio 

AUSTIN SCOTT, Georgia 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

SCOTT DESJARLAIS, Tennessee 

CHRISTOPHER P. GIBSON, New York 

VICKY HARTZLER, Missouri 

DAN BENISHEK, Michigan 

JEFF DENHAM, California 

DOUG LAMALFA, California 

RODNEY DAVIS, Illinois 

TED S. YOHO, Florida 

JACKIE WALORSKI, Indiana 

RICK W. ALLEN, Georgia 

MIKE BOST, Illinois 

DAVID ROUZER, North Carolina 

RALPH LEE ABRAHAM, Louisiana 

JOHN R. MOOLENAAR, Michigan 

DAN NEWHOUSE, Washington 

TRENT KELLY, Mississippi 

COLLIN C. PETERSON, Minnesota, Ranking 

Minority Member 

DAVID SCOTT, Georgia 

JIM COSTA, California 

TIMOTHY J. WALZ, Minnesota 

MARCIA L. FUDGE, Ohio 

JAMES P. MCGOVERN, Massachusetts 

SUZAN K. DELBENE, Washington 

FILEMON VELA, Texas 

MICHELLE LUJAN GRISHAM, New Mexico 

ANN M. KUSTER, New Hampshire 

RICHARD M. NOLAN, Minnesota 

CHERI BUSTOS, Illinois 

SEAN PATRICK MALONEY, New York 

ANN KIRKPATRICK, Arizona 

PETE AGUILAR, California 

STACEY E. PLASKETT, Virgin Islands 

ALMA S. ADAMS, North Carolina 

GWEN GRAHAM, Florida 

BRAD ASHFORD, Nebraska 

SCOTT C. GRAVES, Staff Director 

ROBERT L. LAREW, Minority Staff Director 

(II) 

(III)

C O N T E N T S 

Page 

Conaway, Hon. K. Michael, a Representative in Congress from Texas, opening 

statement .............................................................................................................. 1

Prepared statement .......................................................................................... 2

Peterson, Hon. Collin C., a Representative in Congress from Minnesota, opening statement ........................................................................................................ 3

WITNESSES

Isbell, Mark, Partner, Zero Grade Farms, North Little Rock, AR; on behalf 

of USA Rice Federation ....................................................................................... 4

Prepared statement .......................................................................................... 6

Gibson, Matthew K., Vice President and General Manager, Grain Division, 

Bunge North America; Member, Executive Committee, North American 

Export Grain Association, St. Louis, MO ........................................................... 9

Prepared statement .......................................................................................... 10

Lowe, Karen, Senior Vice President and Manager, Agriculture Export Finance 

Division, CoBank ACB, Greenwood Village, CO ............................................... 12

Prepared statement .......................................................................................... 13

Ribera, Ph.D., Luis A., Associate Professor, Extension Economist, and Director, Center for North American Studies, Department of Agricultural Economics, Texas A&M University, College Station, TX ....................................... 14

Prepared statement .......................................................................................... 16

Claver-Carone, J.D., Mauricio, Executive Director, Cuba Democracy Advocates, Washington, D.C. ....................................................................................... 27

Prepared statement .......................................................................................... 29

SUBMITTED MATERIAL

Poe, Hon. Ted, a Representative in Congress from Texas, submitted statement ...................................................................................................................... 63

Anderson, Darius, President and Chief Executive Officer, U.S. Cava Exports, 

submitted statement ............................................................................................ 64

Gordon, Randall C., President, National Grain and Feed Association, submitted statement .................................................................................................. 65

Scholz, Ben, President, Texas Wheat Producers Association, submitted letter . 66

Stoner, Gordon, President, National Association of Wheat Growers, submitted 

statement .............................................................................................................. 67

American Farm Bureau Federation, submitted statement .................................. 68

Corn Refiners Association, submitted statement .................................................. 68

Missouri Rice Research and Merchandising Council, submitted letter .............. 69

U.S. Agriculture Coalition for Cuba, submitted letter ......................................... 70

(1)

AMERICAN AGRICULTURAL TRADE WITH 

CUBA 

WEDNESDAY, SEPTEMBER 14, 2016

HOUSE OF REPRESENTATIVES, COMMITTEE ON AGRICULTURE, Washington, D.C. 

The Committee met, pursuant to other business, at 10:00 a.m., 

in Room 1300 of the Longworth House Office Building, Hon. K. Michael Conaway [Chairman of the Committee] presiding. 

Members present: Representatives Conaway, King, Thompson, 

Gibbs, Austin Scott of Georgia, Crawford, Gibson, Hartzler, 

Benishek, LaMalfa, Davis, Yoho, Walorski, Allen, Bost, Rouzer, 

Abraham, Moolenaar, Kelly, Peterson, David Scott of Georgia, 

Costa, Walz, McGovern, Vela, Lujan Grisham, Kuster, Nolan, 

Bustos, Maloney, Aguilar, Plaskett, Adams, Graham, and Ashford. 

Staff present: Bart Fischer, Callie McAdams, Haley Graves, 

Jackie Barber, Matt Schertz, Stephanie Addison, Keith Jones, Liz 

Friedlander, Matthew MacKenzie, Faisal Siddiqui, John Konya, Nicole Scott, and Carly Reedholm. 

OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A 

REPRESENTATIVE IN CONGRESS FROM TEXAS 

The CHAIRMAN. Good morning. The Committee on Agriculture 

hearing entitled, American Agricultural Trade with Cuba, will 

come to order. 

I have asked G.T. to open us with a prayer. G.T. 

Mr. THOMPSON. Thank you, Mr. Chairman. I am proud to lead 

us in prayer. 

Heavenly Father, we just thank you for this glorious day. Lord, 

we thank you for the resources you provide us. Thank you for the 

fact that you provide us with this industry of agriculture that allows us to feed and clothe and give us building materials, and all 

the great things that come through your blessings. Lord, we pray 

for the Members of this Committee and those in attendance here, 

that you may minister to their needs and bless them. All this I 

pray in my savior’s name, Jesus Christ. Amen. 

The CHAIRMAN. Thank you. 

The United States has a long and complicated relationship with 

our neighbor to the south. While our close proximity to Cuba 

makes the island nation a natural trading partner, the stranglehold the Castro regime has had on Cuba has long prevented normalized relations between our two countries. 

That stranglehold resulted in the United States imposing an embargo on trade with Cuba that has been in place in various forms 

2

for almost 60 years. In 2000, the Trade Sanctions Reform and Export Enhancement Act, known as TSRA, authorized certain sales of 

food, medicine, and medical equipment to Cuba, subject to various 

restrictions on credit and financing. One such restriction requires 

Cuba to pay cash-in-advance for purchases, interpreted in 2005 by 

the Bush Administration to mean payment in cash before goods 

were shipped. 

In December 2014, amongst a host of other changes, the Obama 

Administration announced its intention to modify the cash-in-advance provisions to require payment before transfer of title. While 

that move was generally applauded, I, and many of my colleagues, 

believe the U.S. secured too little in return for the litany of other 

concessions made to the brutal regime that continues to remain in 

power. The Castro regime remains one of the world’s most oppressive human rights violators. Their heavy hand is in everything, including agriculture, where ALIMPORT remains the sole entity allowed to trade in agricultural products with foreign entities. 

Against this sobering backdrop, I believe there lays an opportunity, albeit a rather narrow one, to make changes that will positively benefit both agricultural producers here at home, while contributing to economic growth in Cuba. To that end, our colleague 

and General Farm Commodities and Risk Management Subcommittee Chairman, Rick Crawford, authored the Cuba Agricultural Exports Act, H.R. 3687, which lifts the financing restrictions 

under TSRA, while providing for both market promotion and U.S. 

agribusiness investment under strict safeguards. The Committee 

was involved in the development of that bill, and both Ranking 

Member Peterson and I are cosponsors. 

While I am very hopeful that we can find a path forward on expanding agricultural trade with Cuba, I remain firmly opposed to 

lifting the embargo or restrictions on travel. We are dealing with 

a regime that cares about little more than ensuring its own perpetuity and prosperity, all at the expense of the Cuban people. 

That being said, I think we all look forward to the day when the 

United States enjoys full, normalized relations with Cuba. 

I also realize this is an issue where good folks will disagree, often 

quite passionately. That generally applies to both proponents and 

opponents of expanding agricultural trade with Cuba alike. My intention today is to have a respectful, constructive dialogue, with 

the goal of exploring common ground. 

With that, I thank our witnesses for being here today. 

[The prepared statement of Mr. Conaway follows:]

PREPARED STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE IN

CONGRESS FROM TEXAS

The United States has a long and complicated relationship with our neighbor to 

the south. While our close proximity to Cuba makes the island nation a natural 

trading partner, the stranglehold the Castro regime has had on Cuba has long prevented normalized relations between our two countries. 

That stranglehold resulted in the United States imposing an embargo on trade 

with Cuba that has been in place in various forms for almost 60 years. In 2000, 

the Trade Sanctions Reform and Export Enhancement Act—known as TSRA—authorized certain sales of food, medicines, and medical equipment to Cuba subject to 

various restrictions on credit and financing. One such restriction requires Cuba to 

pay cash-in-advance for purchases, interpreted in 2005 by the Bush Administration 

to mean payment in cash before shipment of goods. 

3

In December 2014, amongst a host of other changes, the Obama Administration 

announced its intention to modify the cash-in-advance provisions to require payment 

before transfer of title. While that move was generally applauded, I—and many of 

my colleagues—believe the U.S. secured too little in return for the litany of other 

concessions made to the brutal regime that continues to remain in power. 

The Castro regime remains one of the world’s most oppressive human rights violators. Their heavy hand is in everything—including agriculture—where ALIMPORT 

remains the sole entity allowed to trade in agricultural products with foreign entities. 

Against this sobering backdrop, I believe there lays an opportunity—albeit a rather narrow one—to make changes that will positively benefit both agricultural producers here at home while contributing to economic growth in Cuba. To that end, 

our colleague and General Farm Commodities and Risk Management Subcommittee 

Chairman Rick Crawford authored the Cuba Agricultural Exports Act (or H.R. 3687) 

which lifts the financing restrictions under TSRA while providing for both market 

promotion and U.S. agribusiness investment under strict safeguards. The Committee was involved in the development of that bill, and both Ranking Member 

Peterson and I are cosponsors. 

While I am very hopeful that we can find a path forward on expanding agricultural trade with Cuba, I remain firmly opposed to lifting the embargo or restrictions 

on travel. We are dealing with a regime that cares about little more than ensuring 

its own perpetuity and prosperity—all at the expense of the Cuban people. That 

being said, I think we all look forward to the day when the United States enjoys 

full, normalized relations with Cuba. 

I also realize that this is an issue where good folks will disagree—often quite passionately. That generally applies to both proponents and opponents of expanding agricultural trade with Cuba alike. My intention today is to have a respectful, constructive dialogue with the goal of exploring common ground. With that, I thank our 

witnesses for being here today, and I recognize Ranking Member Peterson for any 

comments he would like to make.

The CHAIRMAN. I recognize Mr. Peterson for any comments he 

would like to make. Collin. 

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A 

REPRESENTATIVE IN CONGRESS FROM MINNESOTA 

Mr. PETERSON. Well, thank you, Mr. Chairman. And I also want 

to welcome today’s witnesses to the Agriculture Committee. 

As people know, I have been a long-time supporter of expanding 

trade with Cuba. Some of you who were here at the time when I 

was Chairman may remember that we passed legislation in this 

Committee that would expand U.S. agriculture exports, and allow 

Americans to travel to Cuba more freely. Unfortunately, that legislation died when it went to the Foreign Affairs Committee. 

Now, as we are all aware, the Administration has taken steps to 

ease both trade and travel restrictions, and I believe this is a good 

step, but there is still more work to be done and more work we can 

do to open this market to American agricultural products. 

I disagree with the Chairman; I would like to see the embargo 

lifted, but I am doubtful it is politically possible to do so. 

I do want to caution some of our friends in the Agriculture Committee, however, about some of these glowing press reports that I 

see after they have traveled to Cuba. I was there last year, but, 

with the exception of rice and wheat, maybe dry edible beans, lentils, the potential benefits are limited, at least in my opinion, in the 

short-term because Cuba is a small country, and most people living 

there have a very limited income. Whatever we do will be positive, 

but some of these press reports you would think that it was like 

the whole world would be overturned if we do something there. 

When you have people making $20 a day, there is not a whole lot 

4

they can buy, outside of staples. So we need to keep things in balance here. 

I don’t know what it is going to take to get the incomes going 

up in Cuba, given the regime that is there, which I do agree with 

the Chairman that they leave a lot to be desired. And lifting the 

embargo would actually help raise the income in Cuba and, therefore, make it more likely that they would have money to buy 

things, going forward. 

As I said, long-term trade with Cuba is going to be a benefit to 

U.S. agriculture, to the Cuban people, and I will do what I can, 

working with my colleagues, to see that that happens. 

So again, I thank the chair, and look forward to today’s testimony. 

The CHAIRMAN. The gentleman yields back. Thank you. 

The chair would request that other Members submit their opening statements for the record so our witnesses may begin their testimony, and to ensure that there is ample time for questions. 

I would now like to welcome to our witness table Mark Isbell, a 

rice producer from North Little Rock, Arkansas, on behalf of USA 

Rice. Mr. Matt Gibson, Vice President and General Manager of the 

Grain Division, Bunge North America, St. Louis, Missouri, on behalf of the North American Export Grain Association. And Matt’s 

adult supervision is in the room. His son, Bryan, is here to make 

sure that Dad does it right. Ms. Karen Lowe is Senior Vice President and the Ag Export Finance Division Head at CoBank ACB, 

Greenwood Village, Colorado. Dr. Luis Ribera, Associate Professor, 

Extension Economist and Director, Center for North American 

Studies, Department of Agricultural Economics, Texas A&M University, College Station. And then we have Mr. Mauricio ClaverCarone, Executive Director, Cuba Democracy Advocates, here in 

Washington, D.C. 

And with that, Mr. Isbell, you are recognized for 5 minutes. 

STATEMENT OF MARK ISBELL, PARTNER, ZERO GRADE 

FARMS, NORTH LITTLE ROCK, AR; ON BEHALF OF USA RICE 

FEDERATION 

Mr. ISBELL. My name is Mark Isbell and I am a fourth generation rice farmer. My family and I grow 3,000 acres of rice annually 

on our farm in Lonoke County, Arkansas. 

Two days ago, I was sitting on a tractor on our farm, and today, 

I am here in our nation’s capital speaking with you. It is a remarkable privilege that we live in a country where that can happen. I 

am grateful for the opportunity to appear before the Committee 

today on behalf of the USA Rice Federation to discuss the importance of agricultural trade with Cuba. 

Rice harvest is underway, and I wouldn’t be here without the 

help of my family who is harvesting even now, and I also wouldn’t 

be here if I did not realize the incredible importance of this issue 

for our farm families and farm communities across our country. 

The USA Rice Federation represents all segments of the U.S. rice 

industry. And in the U.S., rice is grown on more than 3 million 

acres, with the majority being in eight states that include Arkansas, California, Florida, Illinois, Louisiana, Mississippi, Missouri, 

and Texas. 

5

My grandfather started our rice farm in Arkansas soon after returning from World War II. In those days, Cuba was a major importer of U.S. rice. He was only 38, 3 years older than I am now, 

when the Cuban embargo began, and though he always hoped to 

see it, he never again saw any significant amounts of U.S. rice 

making its way back to the island before his death at age 90. 

The Cuban market holds great potential for U.S. farmers, however, we are faced with obstacles, and they are not logistical, and 

have nothing to do with our product’s quality or our ability to compete in the global marketplace. The obstacles we face in selling our 

rice to Cuba are statutory obstacles. With your help, these obstacles can be overcome. 

As an export-dependent commodity, we are continually looking 

for new markets like Cuba to maintain a profitable industry. At the 

same time, our markets are threatened by excessive government 

supports for rice producers in key advanced developing countries, 

like Brazil, India, China, Thailand, and Vietnam, that distort global markets. 

Over 50 years ago, rice shipments from the U.S. accounted for 

more than 1⁄2 of Cuba’s imports, but since the embargo, an essentially dormant relationship between the U.S. and Cuba persisted 

for decades. And during that period, Cuba sought their imports 

from other countries, as the U.S. shipped rice to every island nation except for the one most significant to our industry’s vitality. 

Prospects brightened with the passage of TSRA of 2000 when 

U.S. agricultural and food exports to Cuba were granted, what 

many of us believed at the time to be a broad exemption from the 

embargo. In November of 2001, the industry made its first sale of 

U.S. rice to Cuba since the embargo was imposed. The sales 

showed what can happen when barriers are removed, and people 

meet and find common ground for cooperation and trade. Following 

that first sale, more continued, and as recently as 2004, sales of 

U.S. rice to Cuba were valued at $64 million. 

But what might have been a renaissance in trade instead became 

a brief anomaly. Due to a regulatory change in the definition of 

payment of cash-in-advance in 2005, U.S. rice exports to Cuba 

again dropped to zero. We learned from this experience that, given 

the opportunity, Cubans will buy our rice, however, as a cash-deficient economy, the Cubans need flexibility in obtaining credit to 

purchase commodities, globally, everyone has offered it to them except for the U.S. The question is not if Cuba will buy American 

rice, the question is when our country will let them. 

The answer to that question lies with you, the Members of this 

Committee, and your colleagues in Congress. Today Cuba imports about $300 million worth of predominantly 

Vietnamese rice, which travels over 16,000 miles to reach Havana, 

while our southern ports are close by. With appropriate statutory 

changes, the U.S. could regain 30 percent of the Cuban rice business within 2 years. That is an estimated 135,000 metric tons of 

new demand, and we anticipate the U.S. share of the market would 

exceed 50 percent within 5 years, and 75 percent or more within 

10. 

I recently had the opportunity to travel to the island with Committee Members Abraham and Crawford, and I saw firsthand the 

6

opportunity before us in Cuba. I am just one of many farmers to 

make that journey to Cuba in the last 2 years, and we, like many 

of the Cuban citizens, share the same optimism for improving our 

relations. 

We are grateful for the progress that has been made recently, 

however, obstacles to conducting normal trade with Cuba still 

exist, and for U.S. commodities to compete on a level playing field 

with foreign competitors, Congressional action will be required. 

As I stated earlier, the fact that a farmer can leave a rice field 

and travel to Washington to talk about issues that affect his industry says much about what is great about our country. However, the 

fact that a farmer has to leave his family’s rice field and petition 

Congress to allow him to sell his family’s goods on the open market 

speaks to some small thing that is broken within our system. That 

something that is broken is something that you can fix. 

Congressman Crawford’s bill is an attainable path forward toward the natural lifting of U.S. commodity prices, and could be the 

beginning of the end of a multigenerational policy that hindsight 

has proven ineffective in helping the Cuban people, and harmful to 

our farm economies. 

USA Rice appreciates the opportunity to provide our views to the 

Committee and its distinguished Members, and I look forward to 

responding to any questions you have. 

[The prepared statement of Mr. Isbell follows:]

PREPARED STATEMENT OF MARK ISBELL, PARTNER, ZERO GRADE FARMS, NORTH

LITTLE ROCK, AR; ON BEHALF OF USA RICE FEDERATION

My name is Mark Isbell, and I’m a fourth generation rice farmer. My Father, 

Mother, Brother-in-Law, Cousin and I grow 3,000 acres of rice annually on our farm 

in Lonoke County, Arkansas. Our family has farmed there for nearly 100 years. 

Two days ago I was sitting on a tractor on our farm, and today I am here in our 

nation’s capital speaking with you. It is a remarkable privilege that we live in a 

country where that can happen. 

I am here today to discuss the importance of agricultural trade with Cuba and 

share the perspective of a farmer who simply wants to sell his goods in a free and 

open marketplace. 

Rice harvest is underway on our farm and across our country, and I wouldn’t be 

here without the help of my family back home who is harvesting even now. I also 

wouldn’t be here if I did not realize the incredible importance of this issue for our 

farm families and farm communities across our country. 

I am grateful for the opportunity to appear before the Committee today on behalf 

of the U.S. farmer and the USA Rice Federation. 

The USA Rice Federation represents all segments of the U.S. rice industry from 

the farmers to the millers to the merchants and other allied businesses. Here in the 

U.S., rice is grown on more than 3 million acres, with the majority being grown in 

eight states including Arkansas, California, Florida, Illinois, Louisiana, Mississippi, 

Missouri, and Texas. Our industry markets rice in all 50 states and to 125 countries 

worldwide. USA Rice is a leading organization among commodity groups advocating 

for normal commercial relations, including the removal of financing restrictions on 

agricultural sales to Cuba, and works closely with multiple coalitions to raise awareness within Congress and the Administration on potential benefits. As a member 

of the USA Rice’s International Promotion Committee, I can attest that gaining access to the Cuban market has been a long-time priority for the entire industry. 

My grandfather started our rice farm soon after returning from World War II. In 

those days, Cuba was a major importer of U.S. rice. He was only 38—3 years older 

than I am now—when the Cuban embargo began, and though he always hoped to 

see it, he never again saw any significant amount of U.S. rice making its way back 

to the island before his death 2 years ago at age 90. 

7

Rice Consumption of Select Countries

Source: University of Arkansas.

Today, Arkansas grows more than 1⁄2 of the rice in the U.S., most of which is long 

grain, the type consumed by the people of Cuba. Cuba imports nearly 600,000 tons 

of rice per year, and yet none originates in Arkansas, or anywhere in the U.S. for 

that matter. 

I believe the Cuban market holds great promise for U.S. farmers. The obstacles 

we currently face in selling our rice to Cuba are not logistical. The obstacles we face 

in selling our rice to Cuba have nothing to do with our product’s quality or our ability to compete in the global marketplace. The obstacles we face in selling our rice 

to Cuba are statutory obstacles. With your help, these obstacles can be overcome. 

The United States exports 1⁄2 of the rice produced here annually. Maintaining existing markets and securing new markets are critical to the rice industry’s success 

and to the economies in rice growing, milling, and marketing states. Our largest export markets include Canada, Mexico and Central America. As an export-dependent 

commodity, we are continually looking for new markets, like Cuba, to maintain a 

profitable industry. At the same time, our markets are threatened by widespread 

and excessive government supports for rice producers in key advanced developing 

countries like Brazil, India, Thailand and Vietnam that distort global markets. 

Top 10 Export Markets for U.S. Rice and Potential Cuban Market

Prior to the U.S. embargo on Cuba more than 50 years ago, annual rice shipments 

from the U.S. reached as much as 1⁄4 million metric tons, accounting for more than 1⁄2 of Cuba’s rice imports. But since the embargo, an essentially dormant relationship between the U.S. and Cuba persisted for decades. During that period, Cuba 

sought their imports from other countries as the U.S. shipped rice to every island 

nation except for the one most significant to our industry’s vitality. 

Prospects brightened with passage of the Trade Sanctions Reform and Export Enhancement Act of 2000, when U.S. agriculture and food exports to Cuba were granted what many of us believed at the time to be a broad exemption from the embargo. 

In November 2001, the industry made the first sale of U.S. rice to Cuba since the 

embargo was imposed. 

The Cuban importers were well-informed and professional during negotiations 

through the final execution of that sale. The quality of rice they had purchased from 

U.S. farmers was met with excitement when it arrived at the Port of Havana. The 

sale showed what can happen when barriers are removed and people are allowed 


11457001.eps 11457002.eps
8

to meet and find common ground for cooperation and trade. Following the first sale, 

several more continued, and as recently as 2004, sales of U.S. rice to Cuba were 

valued at $64 million. However, this wave of excitement was seriously curtailed, and 

what might have been a renaissance in trade instead became a brief anomaly. Due 

to a regulatory change in the definition of ‘‘payment of cash-in-advance’’ in 2005, 

U.S. rice exports to Cuba again dropped to zero. 

What we learned from this experience is that given the opportunity, Cubans will 

buy our rice. However, as a cash-deficient economy, the Cubans need flexibility in 

attaining credit to purchase our products; globally, everyone has offered it to them 

except for the U.S. The question is not if Cuba will buy American rice, or even how 

they will buy American rice. The question is when we as a country will let them. 

The answer to that question lies with you, the Members of this Committee and 

your colleagues in Congress. 

Today, Cuba imports about $300 million worth of predominantly Vietnamese rice 

on an annual basis. To put that in perspective, those Vietnamese exports are traveling over 16,000 miles to reach Havana, while our southern ports are close by. The 

U.S. is positioned with every advantage to serve the rice needs of the Cuban people 

in terms of required transit time, the cost of freight, and the cost of the rice. 

Average Cost of Shipping a Container of Rice to Cuba from Major Rice Exporting Ports

Source: USDA-Economic Research Service, World Freight Rates.

With the appropriate statutory changes, the U.S. could regain 30 percent of the 

Cuban rice business within 2 years. That is an estimated 135,000 metric tons of new 

demand and we anticipate the U.S. share of the market would exceed 50 percent 

within 5 years, and it could reach 75 percent or more within 10 years with full commercial relations. 

USA Rice Federation and rice farmers like myself and my family are committed 

to building the Cuban market for our product. I recently had the opportunity to 

travel to the island with Committee Members, Congressmen Abraham and 

Crawford, and I saw firsthand the opportunity before us in Cuba. I’m just one of 

many farmers to make the short journey to Cuba in the last 2 years, and we, like 

many of the citizens of Cuba, share the same optimism for improving our relations. 

We are grateful for some of the apparent progress that has been made recently 

with respect to trade with Cuba. However, obstacles to conducting normal trade 

with Cuba still exist, and solutions require action by Congress. Normal commercial 

relations must be restored for U.S. rice exports and other U.S. commodities to have 

the opportunity to compete on a more level playing field with foreign competitors. 

As I stated earlier, the fact that a farmer can leave a rice field and travel to 

Washington to talk about issues that affect his industry says much about what is 

great about our Country. However, on this issue, the fact that a farmer has to leave 

his family’s rice field and petition Congress to allow him to sell his family’s goods 

on the open market speaks to some small thing that is broken within our system. 

That something that is broken is something that you can fix. 

Many Members of this Committee have cosponsored legislation aimed at eliminating the restrictions on agricultural financing and agricultural trade with Cuba. 

Congressman Crawford’s bill, H.R. 3687, the Cuba Agricultural Exports Act, is an 

attainable path forward towards a natural lifting of U.S. commodity prices, and 

could be the beginning of the end of a multi-generational policy that in hindsight 


11457003.eps
9

has proven ineffective in helping the Cuban people and harmful to our farm economies. 

USA Rice appreciates the opportunity to provide our views to the Committee and 

its distinguished Members, and I look forward to responding to any questions you 

may have.

The CHAIRMAN. Thank you. Mr. Gibson. 

STATEMENT OF MATTHEW K. GIBSON, VICE PRESIDENT AND 

GENERAL MANAGER, GRAIN DIVISION, BUNGE NORTH

AMERICA; MEMBER, EXECUTIVE COMMITTEE, NORTH

AMERICAN EXPORT GRAIN ASSOCIATION, ST. LOUIS, MO 

Mr. GIBSON. Good morning. Thank you for the opportunity to testify this morning. I am Matt Gibson, Vice President and General 

Manager of Bunge North America’s Grain Division. It is my honor 

and pleasure to testify on behalf of North American Export Grain 

Association, NAEGA. NAEGA, a not-for-profit organization chartered in 1912, works to promote and sustain the development of export trade from the United States of grain, oilseeds, and primary 

products processed therefrom. Bunge is a commodity trading and 

logistics food ingredients company with a global footprint, 

headquartered in White Plains, New York. With over 35,000 employees that stretch the globe on four continents and 40 countries, 

Bunge has been a part of the world food security solution for nearly 

200 years, by helping farmers connect seamlessly with our customers through logistics and the processing of high-quality products ranging from animal feed to consumer foods to renewable 

fuels. 

Trade is the lifeblood of NAEGA and its member companies, such 

as Bunge. Bunge, as well as NAEGA, understand that an expanding and well-developed global marketplace for food and agricultural 

products provides for a trading environment that meets the needs 

of all stakeholders by signaling to farmers what to produce, and investors, where to deploy their capital, so that we can most efficiently and effectively meet the needs of a growing world population. Practically speaking, Bunge serves two sets of customers; 

the farmer and the end-use customer. 

When it comes to the opportunity for agricultural trade with 

Cuba, our two sets of customers are very much aligned. Both see 

economic growth and improved diets as fundamental to their interest. Both seek to access these markets. U.S. farmers would like the 

freedom to sell their products into markets who appreciate the high 

quality of products the United States has to offer. Food companies 

would like to buy high-quality food at competitive prices. The U.S. 

has both productivity and logistical advantage in meeting Cuba’s 

needs. 

As you well know, the Trade Sanctions Reform and Export Enhancement Act of 2000 allowed the United States to export agricultural products and medical supplies to the island. For several years 

thereafter, we saw a climbing market share in agricultural products. Over the past 8 years, however, that market share has deteriorated drastically. Cuba has imported zero wheat or rice from the 

United States over the past 5 years. Whether it is USDA’s Foreign 

Agricultural Service or the recently published International Trade 

Commission report on the subject, most sources cite financing as 

10

the restriction most significant for the reason for the decline of U.S. 

ag exports to Cuba. 

The Dominican Republic bears many similarities to Cuba in 

terms of population and per capita income level. Between 2013–

2015, the Dominican Republic imported $1.3 billion worth of agricultural products from the United States. During the same time, 

Cuba, however, imported only $262 million from the U.S. That is 

over $1 billion the U.S. agricultural industry left on the table due 

to financing restrictions under which we must currently operate. 

It is not that Cuba is not importing these products. They very 

much are. According to USDA’s Foreign Agricultural Service, Cuba 

is buying wheat from the EU and Canada, corn from Argentina and 

Brazil, rice from Vietnam, soybean oil from Brazil, animal feed 

from Argentina and Mexico, and pulses from China. These are our 

competitors. These countries are able to compete and win in a market where we should be exceptionally competitive due to our quality, proximity, and time of delivery. We expect that Cuba’s need for 

these products will grow. Cuba’s GDP is expected to grow significantly over the next 5 years. And with an expanding middle class, 

the ease of travel restrictions from the U.S., agricultural imports 

will become increasingly necessary. While Cuba may never be a 

trading partner to the scale of Mexico and Canada, tangible effects 

would benefit the agriculture industry. Cuba depends on agricultural imports in order to feed its people. With the help of Congress 

to ensure that the United States has the ability to finance agricultural exports from the United States, we can once again play an 

important role in Cuba’s security. 

Thank you again, and I look forward to any questions you might 

have. 

[The prepared statement of Mr. Gibson follows:]

PREPARED STATEMENT OF MATTHEW K. GIBSON, VICE PRESIDENT AND GENERAL

MANAGER, GRAIN DIVISION, BUNGE NORTH AMERICA; MEMBER, EXECUTIVE

COMMITTEE, NORTH AMERICAN EXPORT GRAIN ASSOCIATION, ST. LOUIS, MO 

Good morning—thank you for the opportunity to testify this morning. I am Matt 

Gibson, Vice President and General Manager of Bunge North America’s Grain Unit. 

It is my honor and pleasure to testify on behalf of the North America Export Grain 

Association (NAEGA). 

NAEGA, a not-for-profit organization chartered in 1912, works to promote and 

sustain the development of the export trade from the United States of grains, oilseeds and primary products processed therefrom. NAEGA consists of private and 

publicly owned companies and farmer-owned cooperatives that are involved in and 

provide services to the bulk grain and oilseed exporting industry. Through a reliance 

on member action and support, NAEGA acts to accomplish this mission from its office in Arlington, VA, and in markets throughout the world. 

Bunge is a leading agribusiness and food company with integrated operations that 

circle the globe, stretching from the farm field to the retail shelf. Founded in 1818 

in Amsterdam, Bunge has been part of the world food security solution for nearly 

200 years. We have expanded our operations and capabilities with the development 

of modern agriculture around the world and today, we have facilities in more than 

40 countries on four continents. More than 35,000 employees help farmers produce 

larger harvests, connect seamlessly with growers, processors, handlers and customers, maintain relationships within and among regions, and produce our own 

high-quality products ranging from animal feed to consumer foods to renewable 

fuels. Bunge was a privately-held company for most of its history and in 1999, we 

moved our headquarters to White Plains, New York in anticipation of going public 

in 2001. 

Trade is the life blood of NAEGA and its member companies, such as Bunge. 

Bunge, as well as NAEGA understand that an expanding and well-developed global 

11

1Mark A. McMinimy, Financing U.S. Agricultural Exports to Cuba (CRS Insight: June 2016). 2 Brian D. Healy, U.S. Agricultural Exports to Cuba Have Substantial Room for Growth (Foreign Agricultural Service International Agricultural Trade Report: June 22, 2015), 5. 

marketplace for food and agriculture products provides for a trading environment 

that meets the needs of all stakeholders by signaling to farmers what to produce 

and investors where to deploy their capital so that we can most efficiently and effectively meet the need of a growing world population. 

Practically speaking, Bunge serves two sets of customers—the farmers and the 

end-use customer—which is often a food company that will further process our ingredients and ultimately provide a finished product to the consumer. At times, these 

two customers have conflicting interests but share several important objectives. 

Farmers want to sell their crop at the highest price possible to recoup their significant investment in land, labor and input costs. Food companies want to purchase 

food and food ingredients at a low price in order to develop them into an end product that is profitable yet affordable for the consumer. By the nature of our business, 

our world is spent striking the appropriate balance between those two sets of constituencies. 

When it comes to the opportunity for agriculture trade with Cuba, however, our 

two sets of customers are very much aligned. Both see economic growth and improved diets as fundamental to their interests. Both seek access to markets. U.S. 

farmers would like the freedom to sell their product into a market which appreciates 

the high quality of products the United States has to offer. Cubans would like to 

buy high-quality ingredients at a competitive price. The U.S. has both productivity 

and logistical advantages in meeting Cuba’s needs. In this instance when our two 

sets of customers’ views are aligned, we must position ourselves to meet their needs. 

As you well know, the Trade Sanctions Reform and Export Enhancement Act of 

2000, allowed the United States to export agriculture products and medical supplies 

to the island. And for several years thereafter, we saw a climbing demand for agriculture products. Over the past 8 or so years, however, that demand has deteriorated drastically. In fact, in the past 5 years, Cuba has imported zero wheat or rice 

from the United States. Most sources, including USDA’s Foreign Agricultural Service or the recently published International Trade Commission report on the subject, 

cite financing restrictions as the most significant reason for the decline in U.S. ag 

exports to Cuba. 

The Dominican Republic bears many similarities to Cuba in terms of population 

and per-capita income level. Between 2013 and 2015, the Dominican Republic imported $1.3 billion worth of agriculture products from the United States. During this 

same time, Cuba, however, imported only $262 million from the U.S.1 That is over 

$1 billion to the U.S. agriculture industry left on the table due to the financing restrictions under which we must currently operate. In a low-margin business, such 

as ours, these numbers have a significant impact on the agriculture supply chain 

from the farmer to the retailer. It is not that Cuba isn’t importing these products. 

They very much are. According to USDA’s Foreign Agricultural Service, Cuba is 

buying wheat from the EU and Canada; corn from Argentina and Brazil; rice from 

Vietnam; soybean oil from Brazil; animal feed from Argentina and Mexico; and 

pulses from China. These are our competitors. These countries are able to compete 

and win in a market where we should be exceptionally competitive due to quality, 

proximity and time of delivery. And we expect that Cuba’s need for these products 

will continue to grow. Cuba’s GDP is expected to grow significantly over the next 

5 years, and with an expanding middle class, and ease of travel restrictions from 

the U.S., agricultural imports will become increasingly necessary. While Cuba may 

never be a trading partner to the scale of Mexico or Canada, tangible effects would 

benefit the agriculture industry. 

For the leading U.S.-based companies who buy grain and oilseeds from farmers, 

the effect of U.S. sanctions on Cuba reaches beyond the United States to the global 

supply chain. 

As mentioned earlier, Cuba is buying grain from countries such as Argentina and 

Brazil. Many global agribusiness companies have operating companies in these 

countries as well, but for those which are U.S.-headquartered, current sanctions also 

prevent these Brazilian and Argentine affiliates from selling to Cuba. This creates 

an un-level playing field between U.S.-headquartered companies and our other competitors costing us and our farmer customers sales opportunities. 

Cuba depends on agriculture imports in order to feed its people. It is estimated 

that imports account for between 60 and 80% of a Cuban’s daily caloric consumption.2 With the help of Congress to ensure that Cuba has the ability to finance agriculture exports from the United States, as well as removing any barriers to trade 

12

by affiliates of U.S. headquartered companies, we can once again play an important 

role in Cuba’s food security. 

Thank you again, and I look forward to any questions that you may have.

The CHAIRMAN. Thank you. Ms. Lowe. 

STATEMENT OF KAREN LOWE, SENIOR VICE PRESIDENT AND 

MANAGER, AGRICULTURE EXPORT FINANCE DIVISION, 

COBANK ACB, GREENWOOD VILLAGE, CO 

Ms. LOWE. Good morning, Chairman Conaway, Ranking Member 

Peterson, and Members of the Committee. I appreciate the opportunity to appear before the Committee today. 

I am Karen Lowe, Senior Vice President and Division Manager 

of Agriculture Export Finance for CoBank. Thank you for calling 

this hearing. 

CoBank is one of the nation’s largest providers of credit to agri- culture and other rural industries. With approximately $125 billion 

in assets, the bank provides loans, leases, and other financial services to farmer-owned agricultural cooperatives and rural infrastructure businesses in all 50 states. That includes my division, which 

provides export financing for companies shipping agricultural commodities and food products to markets all over the world. 

CoBank is a member of the Farm Credit System, and also serves 

as the funding bank for affiliated farm credit associations, serving 

approximately 75,000 farmers and ranchers around the country. As 

a borrower-owned financial institution, CoBank returned $514 million in patronage to our customers in 2015. That provided a 100 

basis point reduction in the interest rate paid by most of our retail 

customers. Over the last 5 years, that total patronage return has 

exceeded $2.2 billion. That is revenue that is invested and stays in 

our rural communities. 

I am here to discuss CoBank’s export financing work and the impact that Congressman Crawford’s bill, H.R. 3687, the Cuba Agricultural Exports Act, would have on removing barriers to exporting 

agricultural commodities to Cuba. 

CoBank is a leading global trade finance provider for U.S. agricultural exports, with approximately $4.5 billion in export loans 

outstanding. CoBank provides trade finance for the export of multiple American commodities to over 30 countries, including developing markets. These are the products grown in Congressional districts represented on this Committee. Your farmers produced these 

products, but they typically don’t export them directly. We work 

with the companies and banks that engage in those exports to 

make efficient and effective markets for American farmers. 

As the Members of the Committee will realize, we are in an extended period of low prices on most agricultural commodities. This 

harsh reality makes every market, no matter the size, important 

to help move the crop and support prices. At the same time, sovereign risk in many emerging markets is increasing due to economic and geopolitical risk factors, which increases exporters’ need 

for payment risk mitigation as well as the need for financing. 

CoBank offers trade finance products such as letters of credit and 

loans. These products help our customers mitigate their foreign receivables collection risk and/or offer payment terms to make their 

products more competitive in the marketplace. CoBank’s export fiVerDate 0ct 09 2002 14:21 Oct 19, 2016 Jkt 041481 PO 00000 Frm 00016 Fmt 6633 Sfmt 6601 P:\DOCS\114-57\21608.TXT BRIAN
13

nancing business benefits U.S. companies, including those focused 

on emerging markets. These markets include countries like China, 

Indonesia, Vietnam, Turkey, Saudi Arabia, Colombia, and Guatemala. Our largest market is South Korea, and our smallest the Dominican Republic. 

CoBank’s Agriculture Export Finance division has two types of 

customers; the American exporter and the correspondent bank in 

the importer’s country. We are proud of our work to support the export of agricultural commodities, and it is an important benefit to 

our customers and our country’s economy. 

I would like to focus for a moment on H.R. 3687, introduced by 

Congressman Crawford. CoBank appreciates this effort to reduce 

barriers to ag exports to Cuba. Specifically, his bill would repeal restrictions on export financing for ag shipments to Cuba. In this 

time of low prices, it would help expand a market just 90 miles 

from Florida. The bill would also give producers and processors access to the USDA promotion programs for ag exports, such as the 

Market Access Program and the Foreign Market Development Program. These can help American producers compete more effectively 

in this market, while ensuring that U.S. taxpayer funds do not end 

up in the hands of the Cuban Government. 

At CoBank, we fully recognize this bill will not eliminate all of 

the challenges in trading with Cuba. A number of additional issues 

will need to be addressed, including a lack of transparency in the 

Cuban banking system, questions of repayment ability, contract enforceability, and even the establishment of a non-government import entity. All of these challenges will need to be addressed, going 

forward, to completely open the flow of trade between our countries. 

But in the meantime, CoBank strongly believes that every effort 

should be made to expand markets. This will help us further realize world-leading production capabilities of U.S. farmers and ranchers, as well as further solidify our position as the premiere provider 

of food, fiber, and nutrition to a growing world population. This will 

provide meaningful benefits to your constituents, U.S. agriculture, 

our rural communities, and the broader U.S. economy. We think 

H.R. 3687 is a good idea. 

I appreciate the chance to join you today, and I look forward to 

the opportunity to address your questions. 

[The prepared statement of Ms. Lowe follows:]

PREPARED STATEMENT OF KAREN LOWE, SENIOR VICE PRESIDENT AND MANAGER, AGRICULTURE EXPORT FINANCE DIVISION, COBANK ACB, GREENWOOD VILLAGE, CO 

Good morning Chairman Conaway, Ranking Member Peterson, and Members of 

the Committee. I appreciate the opportunity to appear before the Committee today. 

I am Karen Lowe, Senior Vice President and Division Manager of Agriculture Export Finance for CoBank. Thank you for calling this hearing. 

CoBank is one of the nation’s largest private providers of credit to agriculture and other rural industries. With approximately $125 billion in assets, the bank provides 

loans, leases and other financial services to farmer-owned agricultural cooperatives 

and rural infrastructure businesses in all 50 states. That includes my division which 

provides export financing for companies shipping agricultural commodities and food 

products to markets all over the world. 

CoBank is a member of the Farm Credit System and also serves as the funding 

bank for affiliated Farm Credit associations serving approximately 75,000 farmers 

and ranchers around the country. As a borrower-owned financial institution, 

CoBank returned $514 million in patronage to our customers in 2015. That provided 

14

a 100 basis point reduction in the interest rate paid by most of our retail customers. 

Over the last 5 years, that the total patronage returned has exceeded $2.2 billion. 

That is revenue that is invested and stays in our rural communities. 

I am here to discuss CoBank’s export financing work and the impact that Congressman Crawford’s bill, H.R. 3687, the Cuba Agricultural Exports Act would have 

on removing barriers to exporting agricultural commodities to Cuba. 

CoBank is a leading global trade finance provider for U.S. agricultural exports, with approximately $4.5 billion in export loans outstanding. CoBank provides trade 

finance for the export of multiple American commodities to over 30 countries, including developing markets. These are the products grown in Congressional Districts represented on this Committee. Your farmers produce these products, but they 

typically don’t export them directly. We work with the companies and banks that 

engage in those exports to make efficient and effective markets for American farmers. As the Members of this Committee well realize, we are in an extended period of 

low prices on most agricultural commodities. This harsh reality makes every market, no matter the size, important to help move the crop and support prices. At the 

same time, sovereign risk in many emerging markets is increasing due to economic 

and geopolitical risk factors, which increases exporters’ need for payment risk mitigation as well as the need for financing. 

CoBank offers trade finance products such as letters of credit and loans. These 

products help our customers mitigate their receivables collection risk and/or offer 

payment terms to make their products more competitive in the marketplace. 

CoBank’s export finance business benefits U.S. companies, including those focused 

on emerging markets. These include countries like China, Indonesia, Vietnam, Turkey, Saudi Arabia, Colombia, and Guatemala. Our largest market is South Korea 

and our smallest the Dominican Republic. CoBank’s Agriculture Export Finance Division (‘‘AEFD’’) has two types of customers: the American exporter and the correspondent bank in the importer’s country. 

We are proud of our work to support the export of agriculture commodities and 

it is an important benefit to our customers and our country’s economy. 

I would like to focus for a moment on H.R. 3687, the Cuba Agricultural Exports 

Act introduced by Congressman Crawford. CoBank appreciates this effort to reduce 

barriers to ag exports to Cuba. Specifically, his bill would repeal restrictions on export financing for ag shipments to Cuba. In this time of low prices, that would help 

expand a market just 90 miles from Florida. 

The bill would also give producers and processors—CoBank’s customers—access 

to the USDA promotion programs for ag exports, such as the Market Access Program and the Foreign Market Development Program. These can help American producers compete more effectively in this market, while ensuring that U.S. taxpayer 

funds do not end up in the hands of the Cuban Government. 

At CoBank we fully recognize that this bill will not eliminate all the challenges 

in trading with Cuba. A number of additional issues will need to be addressed, including a lack of transparency in the Cuban banking system, questions of repayment ability, contract enforceability, even the establishment of a non-government 

import entity. All of these challenges will need to be addressed, going forward, to 

completely open the flow of trade between our countries. 

But, in the meantime, CoBank strongly believes that every effort should be made 

to expand markets. That will help us further realize the world-leading production 

capabilities of U.S. farmers and ranchers, as well as further solidify our position as 

the premier provider of food, fiber and nutrition to a growing world population. This 

will provide meaningful benefits to your constituents, U. S. agriculture, our rural 

communities, and the broader U.S. economy. We think H.R. 3687 is a good idea. 

I appreciate the chance to join you today and look forward to the opportunity to 

address your questions.

The CHAIRMAN. Thank you, Ms. Lowe. Dr. Ribera. 

STATEMENT OF LUIS A. RIBERA, PH.D., ASSOCIATE

PROFESSOR, EXTENSION ECONOMIST, AND DIRECTOR,

CENTER FOR NORTH AMERICAN STUDIES, DEPARTMENT OF 

AGRICULTURAL ECONOMICS, TEXAS A&M UNIVERSITY,

COLLEGE STATION, TX 

Dr. RIBERA. Mr. Chairman, and esteemed Members of the Committee, thank you for the opportunity to testify on agricultural 

trade with Cuba. 

15

I am Luis Ribera, the Director of the Center for North American 

Studies, and the Program Director for International Projects for the 

Agricultural and Food Policy Center, both at Texas A&M University. 

The Center for North American Studies has over 15 years of experience working on Cuban-related issues, and has conducted dozens of economic impact analyses, examining how increasing U.S. 

food and agricultural exports to Cuba will impact the U.S. economy 

and the economies of the states that produce those products for export. 

In general, we find that export creates jobs. And exports to Cuba are no exception. For every $73,600 in U.S. food and agricultural 

export to Cuba, one job is created in the United States, along with 

another $170,000 in economic activity to support those additional 

exports. Cuba’s food imports totaled $1.9 billion in 2014. Cuba also has 

the potential to become a major market for U.S. agricultural exports, and to develop into a market that is quite diverse, with bulk 

staple products such as corn, wheat, soybean, and rice being important in the near-term. To put Cuba into perspective, U.S. agricultural export to Cuba of $149 million represent less than one percent of the total U.S. agricultural exports of $133 billion in calendar year 2015. 

Our previous research indicates that U.S. export potential could exceed the record $709 million set in 2008. With a more open economy, less regulation by both governments, strong tourism, and remittances, U.S. food and agricultural export have the potential to 

exceed $1.2 billion annually within 5 years. 

Nearly 3⁄4 of the labor force is employed by the Government of 

Cuba, at a wage of approximately $20 per month. The literacy rate 

is estimated at 99.8 percent, the highest in the Western Hemisphere. The Government of Cuba, however, is involved in virtually 

every aspect of the business and personal lives of its citizens. Trade 

and investment are strictly limited and controlled by government 

regulation. Further, food and agricultural imports are required to 

enter the country through Empresa Comercializadora de Alimentos 

(ALIMPORT). 

International trade between the United States and Cuba is 

strictly regulated by both governments, however, with the passage 

of the Trade Sanctions Reform and Export Enhancement Act of 

2000, it allowed U.S. firms to legally export their agricultural products to Cuba, and travel there for business purposes. From modest beginnings of $141 million in 2002, the U.S. export peaked at $709 million in 2008. U.S. export then fell to $149 million in 2015. And from January to July of 2016, U.S. exports to 

Cuba were down two percent from the same period last year. 

There are several reasons for this sharp decline in U.S. export. 

First, Cuba has diversified its food suppliers by shifting away from 

U.S. products in favor of those from Brazil, Canada, Argentina, 

Mexico, Spain, France, Ukraine, and Vietnam. Credit terms are offered by some of these countries, allowing ALIMPORT to conserve 

hard currency and use credit to make larger purchases. U.S. exporters cannot use layers of credit, reducing the competitiveness of 

U.S. products. 

16

Currently, and likely in the near future, three key factors will influence the volume and mix of U.S. food and agricultural exports 

to Cuba. First, remittances to Cuba, largely from Cuban Americans 

in the United States, represent a major source of income and purchasing power for about 60 percent of Cuban households, and an 

important source of foreign exchange for the Government of Cuba. 

Second key factor is tourism. With a record of 3.5 million visitors 

in 2015, up from two million in 2004, the potential increase in U.S. 

food and agricultural export to Cuba due to increased travel ranges 

from $48 million to $366 million per year, creating up to 5,500 new 

jobs. These estimates include only the additional spending by new 

U.S. visitors to Cuba. 

In conclusion, the Cuban market for U.S. food and agricultural 

export has the potential for growth. Our estimates indicate that 

U.S. food and agricultural export to Cuba have the potential to exceed $1 billion annually. This additional export will support the 

creation of 6,000 new jobs throughout the U.S. economy. For this 

potential economic impact to be realized, however, several challenges lie ahead. First, sustained income growth and economic 

prosperity for Cubans is needed. Second, infrastructure improvement and investment will be necessary to improve the efficiency of 

existing supply chain and the creation of new cold chains to handle 

processed food. Finally, policies and regulations that facilitate 

trade, and that are transparent and consistent, are an absolute necessity. 

Mr. Chairman, that completes my statement. 

[The prepared statement of Dr. Ribera follows:]

PREPARED STATEMENT OF LUIS A. RIBERA, PH.D., ASSOCIATE PROFESSOR, EXTENSION

ECONOMIST, AND DIRECTOR, CENTER FOR NORTH AMERICAN STUDIES, DEPARTMENT

OF AGRICULTURAL ECONOMICS, TEXAS A&M UNIVERSITY, COLLEGE STATION, TX 

Mr. Chairman, and esteemed Members of the Committee, thank you for the opportunity to testify on agricultural trade with Cuba. I am Luis Ribera, Associate 

Professor and Extension Economist in the Agricultural Economics Department at 

Texas A&M University. I am also the Director of the Center for North American 

Studies (CNAS) and the Program Director for International Projects for the Agricultural and Food Policy Center (AFPC), both at Texas A&M University. CNAS has 

over 15 years of experience working on Cuba related issues and has conducted dozens of economic impact analyses examining how increasing U.S. food and agricultural exports to Cuba will impact the U.S. economy and the economies of the states 

that produce those products for export. I would like to include as part of my testimony an study that my center, CNAS, developed titled[,] Estimated Economic Impacts of the Travel Restriction Reform and Export Enhancement Act of 2010. In general, we find that exports create jobs, and exports to Cuba are no exception. For 

every $73,600 in U.S. food and agricultural exports to Cuba, one job is created in 

the United States, along with another $170,000 in economic activity to support 

those additional exports. 

Cuba Market Potential 

Cuba’s food imports totaled $1.9 billion in 2014. Cuba also has the potential to 

become a major market for U.S. agricultural exports and to develop into a market 

that is quite diverse, with bulk staple products, such as corn, wheat, soybeans and 

rice, being important in the near-term. But, as Cuba grows and the tastes and preferences of the average Cuban become more sophisticated, U.S. exports will be well 

positioned to capture a growing share of the high-value food market. Currently, 

most high-value foods exported to Cuba are consumed in the tourist sector. To put 

Cuba into perspective, U.S. agricultural exports to Cuba of $149 million represented 

less than one percent of total U.S. agricultural exports of $133 billion in calendar 

year 2015. 

17

1 Central Intelligence Agency of the United States. World Factbook, Cuba and the Dominical 

Republic, April 2015. 

Our previous research indicates that U.S. export potential could exceed the record $709 million set in 2008. With a more open economy, less regulation by both governments, strong tourism and remittances, U.S. food and agricultural exports have the 

potential to exceed $1.2 billion annually within 5 years. While much of this additional export volume may be consumed by international visitors, a growing share 

will also make its way into the Cuban populace, spurring additional demand for food 

and creating a larger potential market for U.S. exports. In 2015, U.S. exports to Cuba were $149 million, supported $415 million in total 

business activity and provided employment for 1,555 workers throughout the U.S. 

economy. U.S. agriculture receives economic gains from increased agricultural exports, with benefits accruing to non-agricultural sectors such as business and financial services, real estate, wholesale and retail trade and health care. Approximately 

45 percent of the gains in business activity go to non-agricultural sectors, while the 

majority of gains, 55 percent, go to agricultural producers, agribusinesses and related firms. 

In 2015, U.S. exports were concentrated in poultry, soybean complex and corn. Major exports included frozen leg quarters and other poultry ($78 million), soybeans 

and soybean meal ($65 million) and corn ($4.8 million). Together these three product 

categories represented 99 percent of U.S. agricultural exports to Cuba (Figure 1). 

Other U.S. exports were feeds/fodders ($9.4 million), dairy products ($1.4 million), 

pork ($1.3 million) and fresh fruit, prepared and snack foods ($379,000). U.S. poultry claimed 73 percent of the poultry market in Cuba, while the soy complex represented 20 percent and corn 1⁄2 of the market. Cuba is now the seventh largest 

market for U.S. exports in the Caribbean/Central American region, but has potential 

to become more important. 

Cuba is a centrally-planned economy located 90 miles south of Key West, Florida. 

The proximity to the United States makes Cuba economically, socially and politically important. Since the U.S. embargo was implemented in 1962, effectively severing diplomatic and economic relations, U.S. firms have been prohibited from doing 

business there. 

Nearly 3⁄4 of the labor force is employed by the Government of Cuba (GOC) at a wage of approximately $20/month. The literacy rate is estimated at 99.8 percent, the 

highest in the Western Hemisphere.1 The GOC, however, is involved in virtually 

every aspect of the business and personal lives of its citizens. Trade and investment 

are strictly limited and controlled by government regulation. Further, food and agricultural imports are required to enter the country through Empresa 

Comercializadora de Alimentos (ALIMPORT). 

International trade between the United States and Cuba is strictly regulated by 

both governments. U.S. firms may export foods, agricultural products and medicines 

to Cuba. Recent regulatory changes allow the importation of selected Cuban products, but these products must be purchased from private businesses, not the Cuban 

Government. So, while some relaxation of regulation has occurred, there are significant regulatory impediments to trade in food and agricultural products. 

However, a combination of factors led to the growth of U.S. food and agricultural 

exports to Cuba during the early 2000s. First, passage of the Trade Sanctions Reform and Export Enhancement Act of 2000 allowed U.S. firms to legally export their 

agricultural products to Cuba and travel there for business purposes. Second, the 

rapid onset of Hurricane Michelle in 2001 led to the destruction of most food crops 

in Cuba, and subsequently to acute food shortages. This prompted Cuba to begin 

the importation of U.S. food and agricultural products on a commercial basis for the 

first time since the embargo was imposed. From modest beginnings of $141 million in 2002, U.S. exports grew to $398 mil- lion in 2004 and peaked at $709 million in 2008. U.S. exports then fell to $460 million in 2012, $350 million in 2013, $286 million in 2014 and 149 million in 2015 

(Figure 1). From January to July 2016, U.S. exports to Cuba were down two percent from the same period last year to $114 million. 

This recent export performance is in sharp contrast to 2009, when a much larger 

and more diverse mix of U.S. products were exported to Cuba. In 2009, U.S. agricultural exports to Cuba of $529 million required 8,588 jobs and generated $1.6 billion 

in total economic activity. Major U.S. exports were frozen broilers/turkeys and other 

poultry ($144 million), soybeans and soybean products ($133 million) corn ($120 million), and wheat ($73 million). These four product categories represented 99 percent 

of total U.S. agricultural exports to Cuba. Other U.S. exports were dairy products 

($412,000), fruit ($228,000), animal feeds ($36,000), dried broths ($32,000) and frozen breads ($18,000). 

18

Figure 1. U.S. Food, Ag, and Related Exports to Cuba 

Million Dollars

Note: Total exports to Cuba include small amounts of non-ag-related exports. 

Source: U.S. Census Bureau, Foreign Trade, U.S. Goods by Country, 

www.census.gov/foreign-trade/balance/.

There are several reasons for this sharp decline in U.S. exports. First, Cuba has 

diversified its food suppliers by shifting away from U.S. products in favor of those 

from Brazil, Canada, Argentina, Mexico, Spain, France, Ukraine, and Vietnam. 

Credit terms are offered by some of these countries, allowing ALIMPORT to conserve hard currency and use credit to make larger purchases over periods of several 

months or longer, usually twice a year. Sustained high prices for many agricultural 

commodities and a strong U.S. dollar also negatively impacted U.S. exports over the 

last several years. Lower earnings from nickel exports also hampered the GOC from 

continuing large cash expenditures on imported food. Perhaps another reason may 

have been the deliberate decision by the GOC to move away from the United States 

as a food supplier. After a decade of trying to influence U.S. policy and failing, persistence may have waned. The net result was a loss of U.S. competitiveness and 

market share, followed by a precipitous 79 percent decline in U.S. exports between 

2008 and 2015. 

Cuba, however, does have potential for growth as a market for U.S. food and agricultural exports. With a population of 11 million, Cuba is similar in demographic 

composition and structure to the Dominican Republic, the largest U.S. market in the 

Caribbean/Central American region, ranging from $1.1 billion to $1.4 billion annually. Cuba also mirrors Guatemala, a market that has grown 38 percent over the 

past 5 years. 

In 2014, the Dominican Republic had a population of ten million, with a labor 

force of 4.9 million. The proportion of the population between the ages of 25–54 was 

39 percent. Per capita gross domestic product (GDP) was estimated at $9,200. GDP 

was composed of 15 percent agricultural production, 22 percent industrial production and 63 percent services. In 2014, the Dominican Republic imported $1.4 billion 

from the United States, compared to $1.1 billion in 2010, an average annual growth 

rate of nearly seven percent. 

Cuba, by contrast, had a labor force of 5.1 million in 2014. Per capita GDP was estimated to be $10,200. This figure includes adjustment for government subsidized 

food, housing, transportation and medical care. Agriculture accounted for four percent of GDP, while industrial production was 22 percent and services was 74 percent. The proportion of the population between the ages of 25–54 was 47 percent, 

higher than the Dominican Republic and positive in terms of U.S. export growth potential since that age group tends to experience the highest levels of expenditure 


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19

on food and other consumer products. These demographic comparisons give some 

idea of the potential the Cuban food market could have if it becomes more market 

oriented, less restricted by government regulation and experiences investment in 

business and infrastructure. 

Currently and likely for the near future, three key factors will influence the volume and mix of U.S. food and agricultural exports to Cuba. First, remittances to 

Cuba, largely from Cuban Americans in the United States, represent a major source 

of income and purchasing power for about 60 percent of Cuban households and an 

important source of foreign exchange for the GOC. 

Cuba’s exports are also important for sustaining the economy and the ability to 

import food. With imports representing a much as 80 percent of food consumption 

in some years, access to foreign exchange is crucial. Tourism ($1.9 billion), nickel/

cobalt ($1.0 billion) and pharmaceuticals ($547 million) were Cuba’s three most important exports out of a total of $5.3 billion in 2013. Other major exports included 

sugar ($449 million), tobacco ($245 million) and rum ($154 million). Cuba’s ability 

to purchase food fluctuates widely as global markets for these products influence 

prices and volumes traded. 

Finally, U.S. export success is heavily influenced by decisions on the part of the 

GOC and ALIMPORT related to which products to purchase, at what price and in 

what volumes. 

The present product mix of frozen leg quarters, soybean meal and corn could certainly increase to include more processed foods and high value products such as 

pork, beef, prepared meats such as sausage and hot dogs, along with condiments 

such as sauces, seasonings, mayonnaise, mustard and other products. Dairy products, rice and wheat also have strong potential in the market. Snack foods, frozen 

desserts, soups, gelatins and canned fruit and vegetables all have potential. Raisins, 

nuts, fresh fruit and vegetables, along with gum, bottled water, wine, beer and 

spir[i]ts all have potential. These products were exported to Cuba to some degree 

until 2012 when the Cuban Government began to make substantial food purchases 

from other suppliers. 

Challenges in the Cuban Market 

There are several challenges that limit the performance of U.S. exports to Cuba. 

Consumer incomes, infrastructure/logistics, and policy and regulation are among the 

most important constraints. Consumer income growth is one of the critical factors 

affecting market potential in Cuba. With the large majority of the population on 

fixed, low incomes, consumer disposable incomes are limited. 

Remittances, largely from Cuban Americans in the United States are an important component of household income and a bright spot in terms of market potential. 

These funds are transferred directly to Cubans and represent a substantial boost 

to consumer purchasing power. Estimated to increase eight percent from $2.77 billion in 2013 to $3.0 billion in 2014, remittances are likely to have a substantial positive economic effect on the Cuban economy and U.S. exports, spurring expenditures 

by those who receive them and fostering additional investment in small business 

ventures. Should remittances decline, however, there would be direct negative impacts on Cuban consumers and followed by lower purchases of U.S. food products. 

Tourism is also an important income source for those Cubans who work in restaurants, hotels and other tourist related businesses, such as transportation. With 

a record 3.5 million visitors in 2015, spending an average of $629/trip, tourism represents a key component of the Cuban economy that generated $3.0 billion last year. 

Approximately 40 percent of all visitors to Cuba are from Canada, followed by Germany, England, Italy, France and Mexico. Allowing U.S. visitors to use credit cards 

will also have a positive economic impact, but the exact amount is uncertain and 

more research is required. 

Cuba also relies on exports of nickel and cobalt, pharmaceuticals, sugar and rum. 

International market volatility due to wide swings in commodity prices can limit the 

amount of currency available for food purchases, and certainly dampen U.S. export 

potential. 

Infrastructure and logistics pose special problems for U.S. exporters. Internet access in Cuba was severely limited, with only an estimated five percent of the population having access. However, over the last few months several Internet hotspots 

have been installed as well as smartphones data plans are made available for 

Cuban citizens. Although major strides have been made, limited Internet and e-mail 

can certainly have a negative effect on communications between Cuban officials and 

U.S. businesses after deals are made and the U.S. representative returns home. 

Electrical power, while adequate most of the time, does have limitations. Intermittent outages and complete loss of power are common occurrences. When this occurs, 

perishable food products located in warehouses, at Cuban Customs, in grocery stores 

20

or restaurants may be subject to damage, partial spoilage or complete loss. Additional investment in power infrastructure will be an important factor in determining 

the amount of U.S. perishables that can be imported and retained in storage. Bulk 

cargoes, such as corn, soybeans, wheat and rice also face constraints due to antiquated unloading facilities at ports, limited vessel size constraints and slow loading 

capacities. Although the GOC has already invested over $900 million in the development of the Zona Especial de Desarrollo (Special Development Zone) Port of Mariel 

to improve the port facilities and attract foreign direct investment. The Port of 

Mariel, operated by Singapore-based PSA, has four cranes with a capacity of 

824,000 containers/year and the capacity to handle Post-Panamax shipping (ships 

that can handle over 12,500 containers). The development of an efficient, reliable 

supply chain is crucial to future U.S. export success. 

Competition for the Cuban food market is keen. The U.S. share of the Cuban market has been declining for several years and continues to fall in 2016. Many U.S. 

competitors in the Cuban market offer some form of credit terms to ALIM[P]ORT 

for food purchases. U.S. firms are precluded from doing so and also face an added 

constraint of being required to offer only cash-in-advance sales, or cash against documents. U.S. exporters cannot use letters of credit to facilitate sales and manage 

risk, raising the cost of U.S. products and making them less competitive relative to 

Spain, Canada, Brazil, China and Vietnam (Figure 2). Reducing the cost and time 

necessary to process payment for U.S. exports to Cuba would have positive economic 

impacts in terms of increased exports and economic activity. U.S. exports to Cuba 

would be expected to rise by $271.2 million/year, requiring an additional $561.9 million in business activity for a total economic impact of $833.1 million and supporting 

4,478 new jobs. In summary, consistent, transparent and facilitative policies related 

to export finance for U.S. exports to Cuba would have positive economic impacts on 

U.S. exports and the U.S. economy. 

Figure 2. Compe[ti]tion in Cuba Food Market 

Million Dollars

Source: USDA Foreign Agricultural Service; WISERTrade; Brazilian Ministry of Development, Industry, and Forei[g]n Trade; and Argentina Institute of Statistics and Census. 

Background on Agriculture in Cuba 

Agriculture (including sugar) accounts for 4.2 percent of Cuba gross domestic 

product (GDP), compared to 18 percent for repairs, 17 percent for public health and 

manufacturing at 15 percent. Cuba has a moderate, subtropical climate with an average of 330 days of sunshine annually. The island’s weather is characterized by a 

dry season (November–April) and a rainy season (May–October). The average temperature ranges from 75° in the West to 80° in the East. Humidity averages about 


11457005.eps
21

80 percent and average annual rainfall is 52′′, with about 39′′ falling during the 

rainy season. 

Roughly 50 percent of Cuba’s land is classified as agricultural, with 75 percent 

of that land area in relatively flat to gently rolling terrain and suitable for tropical 

and subtropical agricultural production (USDA). According to the Food and Agriculture Organization of the United Nations, however, about 70 percent of Cuba’s arable land has low organic matter content, while 45 percent is characterized by low 

fertility, 42 percent is eroded and 40 is poorly drained. These soil conditions are attributed to poor land management, including continuous tillage, overgrazing, and inadequate or improper use of irrigation and drainage systems. 

Agricultural land in Cuba is evenly distributed between cropland (46 percent) and 

pasture (54 percent) (USDA). Recently, a large, but so far undocumented, amount 

of Cuba’s cropland was taken out of permanent crop production and placed in native, unimproved pasture. It is suspected that this was done in an attempt to increase milk production, which has declined about ten percent since 2003. This occurred as milk output per cow actually increased 25 percent over the same period 

(ONE). Cereals (rice and corn), sugar cane, tropical fruits, and vegetables accounted 

for 84 percent of harvested area in 2013. 

Cuba’s field crop yields, harvested area and production have varied widely over 

the past decade. Corn yields averaged 47 bushels/acre in 2013, compared to 160 

bushels/acre in the United States. These yields, however, were up 20 percent from 

41 bushels/acre in the period from 2003–08. Harvested area for corn declined from 

556,000 acres in 2010 to 440,000 acres in 2013. In 2013, Cuba rice yields averaged 

3,000 pounds per acre, compared to 7,400 in the United States. Harvested area for 

rice was down five percent to 489,000 acres. Rice production was up in 2013 to 

677,000 metric tons, however, nearly 20 percent more than 2010. 

Because of poor soil conditions, high humidity, timing and amounts of rainfall, 

high insect infestation and lack of pesticide or biological controls, Cuba’s ability to 

produce grain and oilseed crops is limited and likely to remain so over the longterm. According to FAO, 42 percent of Cuba’s agricultural land is affected by medium to highly erodible soils. Poor drainage and low fertility affect 40 to 44 percent 

of soils, while 70 percent experience low organic matter. As a result, Cuba will remain one of the top grain and oilseed product markets in the Caribbean region. 

International Visitors in Cuba 

A record 3.5 million international visitors traveled to Cuba in 2015, up from 2.0 

million in 2004. Slightly more than 90,000 international visitors were U.S. business 

representatives and other approved categories. Revenue from international visitors 

is a major source of foreign exchange for the Government of Cuba (GOC), ranked 

third behind technical services and remittances. It is also an important source of 

income for Cubans working in tourism such as wait staff, taxi drivers and tour operators. This revenue was equivalent to 57 percent of all merchandise exports in 2009 

and 28 percent of the balance of all services trade for 2007. Further, as Cuban tourism earnings increased by six percent from 2006 to 2008, U.S. exports doubled. As 

earnings from tourism declined 11 percent in 2009, U.S. exports fell by 25 percent. 

The potential increases in U.S. food and agricultural exports to Cuba due to increased travel range from $48 million to $366 million/year, creating up to 5,500 new 

jobs, these estimates include only the additional spending by new U.S. visitors to 

Cuba. 

Changes implemented by the GOC in April 2008 allow Cubans to stay at some 

tourist hotels and resorts. Many of the four and five star facilities are out of the 

price range of most locals who earn the equivalent of about $20/month. During the 

low season of 2009 (August), however, some of the two and three star hotels in 

Varadero, Cuba’s major tourist beach resort area, were booking 1 week stays to 

locals for around $200/week. With about 60 percent of Cubans having access to hard 

currency either from remittances, factory and farm bonuses, or tips, these ‘new’ 

tourists, are creating some additional demand for U.S. food products. 

While many other forces also influenced U.S. exports, and cause-effect may be debatable, there does appear to be a fairly strong linkage between the amount of 

money Cuba earns from visits to the island and the amount of food it can afford 

to import from the United States and other suppliers. USDA estimated in 2008 that 

the proportion of imported foods supplying the tourist trade in Cuba was between 

25 and 33 percent. CNAS estimates indicate that the U.S. share of the Cuban food 

market for international visitors is about 40 percent, implying that each tourism 

dollar spent in Cuba generates an additional $0.10 to $0.13 in U.S. food exports 

needed to supply the Cuban tourist trade. 

In conclusion, the Cuban market for U.S. food and agricultural exports has potential for growth. From modest beginnings, the market has shown strong growth at 

22

1 Rosson is Professor and Director, Center for North American Studies; Adcock is International 

Program Coordinator and Assistant Director, Center for North American Studies; and Manthei 

is Extension Assistant, Texas AgriLife Extension Service. For more information, please call 979–

845–3070 or e-mail prosson@tamu.edu.

times, but also weakness. Our estimates indicate that U.S. food and agricultural exports to Cuba have the potential to exceed $1.0 billion annually. These additional 

exports would support the creation of 6,000 new jobs throughout the U.S. economy. 

For this potential economic impact to be realized, however, several challenges lie 

ahead. First, sustained income growth and economic prosperity for Cubans is needed. Second, infrastructure improvement and investment will be necessary to improve the efficiency of existing supply chain and the creation of new cold chains to 

handle processed foods. Finally, policies and regulations that facilitate trade, and 

that are transparent and consistent are an absolute necessity. Open trade would 

certainly lead to more rapid growth, but absent free trade, less regulation of financing, the use of letters of credit and improvements in banking conditions in Cuba 

would stimulate U.S. export growth. 

Mr. Chairman, that completes my statement. 

ATTACHMENT

Estimated Economic Impacts of the Travel Restriction Reform and Export 

Enhancement Act of 2010

Parr Rosson, Flynn Adcock and Eric Manthei 1

CNAS 2010–01

March 2010

Introduction 

The following report was prepared for presentation to the House Committee on 

Agriculture, United States House of Representatives, March 11, 2010 related to the 

public hearing on H.R. 4645, the Travel Restriction Reform and Export Enhancement Act. 

The analyses and report were prepared by the Center for North American Studies 

(CNAS). Contributors were, Principal Author, C. Parr Rosson III, Professor and Director; Co-author, Flynn J. Adcock, International Program Coordinator; and Research Assistant, Eric Manthei. All are located in the Center for North American 

Studies, Department of Agricultural Economics, Texas AgriLife Research/AgriLife 

Extension, Texas A&M University. 

Key Findings, Assumptions and Limitations of the Analysis 

In 2009, U.S. exports to Cuba were $528 million, supported $1.6 billion in total 

business activity, and provided 8,600 jobs throughout the U.S. economy. If U.S. travel and financial restrictions are removed, up to $365 million/year in additional U.S. 

exports could result, requiring $1.1 billion in business activity and 6,000 new jobs. 

While U.S. agriculture is estimated to receive major economic gains from increased 

exports, non-agricultural sectors such as business and financial services, real estate, 

wholesale and retail trade, and health care are also important beneficiaries of increased exports to Cuba, receiving up to 45 percent of the gains in some cases. 

The results of this analysis assume that any increase in U.S. exports to Cuba is 

a ‘net’ increase in the U.S. export position. Otherwise, the economic impacts presented here would overestimate the effects of U.S. exports to Cuba on the U.S. economy. A second assumption is that Cuba’s tourist industry follows a similar developmental pattern to other Caribbean countries in terms of food and beverage consumption and imports. Third, the results of a report by the U.S. International Trade 

Commission (U.S. Agricultural Sales to Cuba: Certain Economic Effects of U.S. Restrictions, USITC 3932, July 2007) were used to estimate the value of U.S. exports 

to Cuba if travel and financial restrictions are modified. Finally, the results of the 

different analyses discussed below should not be combined, or added together, because they were estimated using separate economic impact analyses and double 

counting would result. 

Importance of Legislation for Improving U.S. Competitive Position in Cuba 

Allowing U.S. citizens/permanent residents to travel to Cuba and U.S. firms to 

utilize modified financing methods will improve the U.S. competitive position in the 

Cuban market. New financing provisions would allow U.S. exporters to recover lost 

markets for rice and forest products, for example, creating new jobs and economic 

activity. 

23

It is also important to maintain the U.S. competitive position for wheat, corn, and 

soybean meal and oil. Through February 2010, U.S. exports of corn to Cuba were 

down 47 percent compared to 2009, while wheat exports are off 69 percent and soybean meal exports had fallen 55 percent. The majority of these declines in exports 

are attributed to increased costs associated with financial restrictions, demurrage on 

vessels, currency conversion costs, and higher costs associated with using letters of 

credit (ALIMPORT staff, 3/2/2010). Recently implemented cash-in-advance rules resulting from the FY 2010 Omnibus Appropriations Act will provide some temporary 

respite, but will not alleviate the problem entirely. 

Consequently, Cuba appears to be diversifying its suppliers by shifting away from 

U.S. firms in favor of Brazil, Canada, China and Vietnam. Credit terms are often 

offered by these countries, allowing ALIMPORT (Importad[ora] de Alimentos—the 

Cuban Food Import Agency) to conserve its hard currency and use credit to make 

larger purchases over a longer period of time. The net result is a loss of U.S. competitiveness and market share, followed by declining exports. If conditions do not 

improve and if alternative markets are not developed, negative economic impacts 

will occur in terms of lost business activity and employment. 

Background 

The Trade Sanctions Reform and Export Enhancement Act of 2000, allows certain 

exceptions for the exportation of U.S. agricultural products and medicines to Cuba. 

Since passage of the TSREEA, U.S. exports to Cuba have expanded, reaching a 

record $711 million in 2008. This was almost 2⁄3 higher than 2007. Last year (2009) was quite different however, as U.S. exports to Cuba declined 26 percent to $528 

million. This large drop-off was attributed to an 18 percent decline in Cuba’s per 

capita tourist earnings, a 30 percent drop in Cuban export earnings from nickel 

sales, and weak export sales of sugar and tobacco. Another major set of factors was 

the relative high cost of U.S. products due to somewhat onerous U.S. financial requirements. Together, these factors severely limited the ability of ALIMPORT to 

purchase U.S. products on a cash basis. Despite this decline, Cuba remains the sixth 

largest U.S. agricultural market in the Latin American/Caribbean region. 

U.S. exports to Cuba are highly concentrated in a few key sectors. For 2009, the major U.S. exports to Cuba included frozen broilers/turkeys and other poultry ($144 

million), soybeans and soybean products ($133 million) corn ($120 million), and 

wheat ($73 million). These four product categories represented 89 percent of total 

U.S. agricultural exports to Cuba. Other important U.S. exports were animal feeds 

($26 million), pork ($11 million), dry beans ($4.3 million), and processed foods and 

phosphate fertilizers ($3 million) each. Minor exports were apples, pears and grapes 

($2.6 million), margarine ($2.2 million), and treated poles ($1.7 million). U.S. agricultural exports to Cuba of $528 million in 2009 required 8,588 jobs and generated $1.6 billion in total economic activity. CNAS estimates indicate that for 

every $1 of U.S. agricultural exports to Cuba in 2009, an additional $1.96 in business activity was required to support those exports. 

These economic impacts of food and other agricultural exports to Cuba were estimated using IMPLAN, an input/output model. IMPLAN is maintained by Minnesota 

IMPLAN Group, Austin, Minnesota. Economic multipliers for each sector of the 

economy were used to estimate how a change in one sector affects business activity 

and employment in the other sectors of the economy. 

Business activity refers to the total output of a sector, such as corn, and the value 

of all purchased inputs used to produce corn for export. Business activity also includes employee compensation, proprietor income, rents and royalties, and payment 

of indirect business taxes. Employment is reported as total jobs, with full-time and 

part-time jobs counting the same. 

Economic Impacts of Removing U.S. Travel Restrictions to Cuba 

Two scenarios were analyzed to estimate the economic impacts of removing U.S. 

travel restrictions to Cuba. Both scenarios focus only on the export of high value 

products, mainly processed foods, beverages, horticultural products and seafood. 

This analysis assumes that all travel restrictions are removed and that visitors remain in Cuba between 4.5 and 7 days. 

Scenario 1: Short Run (Years 1–2) 

The short run analysis provides estimates of U.S. exports and economic activity 

before Cuba has time to adjust to the increased number of tourists/visitors from the 

United States by increasing hotel room capacity, and improving critical infrastructure such as power generation and transportation. It also assumes that visitors remain in Cuba for 4.5 days. Based on the USITC report, 538,000 additional visitors 

were estimated to arrive and spend $50/day for food/drink. CNAS estimates that the 

U.S. share of tourist expenditures on food/drink would be 40 percent. 

24

This results in additional U.S. food/drink exports to Cuba of $48.4 million/year 

(Table 1). Major exports would be frozen broilers/turkeys/eggs ($8 million), beef, 

pork, edible offal ($6.3 million), miscellaneous processed foods ($5.5 million), flour/

malt ($3.3 million), dry milk/cheese ($3 million), canned fruits/vegetables ($2.9 million), soft drinks ($2.5 million), distilled spirits/wines/beer ($2.4 million), fruits ($2.4 

million), fats/oils ($2 million). Other exports include condiments, vegetables/melons, 

snack foods, refined sugar, seafood, and frozen desserts. 

The additional $48.4 million in exports would be expected to require $116.7 million in additional business activity, creating a total economic impact of $165.1 million and 786 new jobs. About 38 percent of the economic impact would be attributable directly to new exports. The largest share of new economic activity (62 percent, or $102 million), would result from input purchases and household spending 

in sectors that support exports, but do not actually export. About $14 million of this 

new total business activity is agriculturally related activities such as grain and oilseed production, ranching, forestry, fishing, and corn milling. Together, these sectors 

require 153 new jobs to support new U.S. exports to Cuba. 

Business services, such as legal, accounting and technical consulting require $11 

million in business activity and 84 new jobs. Additional food processing supports $8 

million in business activity, while real estate, wholesale trade and finance require 

$7.3 million, $7 million, and $6.4 million in business activity, respectively. These 

sectors also require 89 new jobs. Other sectors required to support new exports include: petroleum ($8.8 million), transportation ($4.8 million), wood processing ($3 

million), and retail trade and food/drink establishments ($4.7 million). 

Scenario 2: Long Run (Minimum of 5 Years) 

Two long run scenarios are reported. The first assumes that U.S. tourists to Cuba 

stay 4.5 days, while the second scenario assumes tourists stay 7.0 days and daily 

food expenditures rise to $60 per day. Over the long run, it is also assumed that 

Cuba’s tourist industry adjusts to the increased demand for services by renovating 

existing hotels and facilities, building new facilities and improving critical infrastructure. As these improvements occur, it is estimated that 2.0 million U.S. tourists 

would visit Cuba annually. 

Assuming new tourists stay 4.5 days, U.S. exports are estimated to increase by 

$180 million/year million to meet the increased demand for high value foods/drink 

products (Table 1). This would lead to a total economic impact of $614 million in 

business activity and 2,923 new jobs. As was the case in Scenario 1, slightly more 

than 1⁄3 of the economic impact would occur in sectors that are exporting products 

to Cuba. Slightly more than 1⁄2 ($200 million) of the non-export related business activity is expected to occur in other agriculture activities, business services, food production, real estate, wholesale trade and finance. About 55 percent of the new jobs 

associated with increased exports, 2,252, would occur in the previously noted nonexport sectors of the economy. The remainder of the new jobs, 671, would be in petroleum, transportation, health care, food/drink establishments, retail trade and 

other sectors.

Table 1. Estimated Economic Impacts of Increased U.S. Tourism to Cuba 

Million Dollars 

Short Run 4.5-Day Stay Long Run 4.5-Day Stay Long Run 7-Day Stay 

Exports 

Total

Business 

Activity 

Exports 

Total

Business 

Activity 

Exports 

Total

Business 

Activity 

Top Exported Products

Poultry Meat and Eggs $8.1 $13.6 $30.0 $50.5 $56.0 $94.2

Pork, Beef and Products $6.3 $8.8 $23.4 $31.9 $43.6 $59.6

Miscellaneous Food Products $5.5 $5.8 $20.9 $22.0 $39.2 $41.3

Flour and Malts $3.3 $4.1 $12.4 $15.4 $23.2 $28.8

Dry Milk and Cheese $3.0 $4.0 $11.3 $15.1 $21.1 $28.3

Canned Fruits/Vegetables $2.9 $3.4 $10.7 $12.5 $19.9 $23.3

Soft Drinks $2.5 $2.8 $9.3 $10.3 $17.4 $19.2

Spirits/Wine/Beer $2.4 $2.8 $9.1 $10.6 $17.0 $19.7

Fruits $2.4 $2.9 $8.9 $10.7 $16.6 $20.1

Top Supporting Sectors

Ag Related Activities N/A $14.0 N/A $51.9 N/A $96.9

Business Services N/A $11.1 N/A $41.2 N/A $76.8

Oil, Gas, and Petroleum Products N/A $8.7 N/A $32.4 N/A $60.4

Other Food Production N/A $8.0 N/A $29.9 N/A $55.8

25

Table 1. Estimated Economic Impacts of Increased U.S. Tourism to Cuba—

Continued

Million Dollars 

Short Run 4.5-Day Stay Long Run 4.5-Day Stay Long Run 7-Day Stay 

Exports 

Total

Business 

Activity 

Exports 

Total

Business 

Activity 

Exports 

Total

Business 

Activity 

Total Estimated Impacts

Business Activity $48.4 $165.1 $180.0 $614.2 $336.0 $1,146.5

Employment (# of Jobs) 181 786 671 2,923 1,252 5,456

Assumptions for 4.5-day stay scenarios are that $50 per day per person spent by 538,000 visitors in the Short 

Run and 2.0 million visitors in the Long Run. These assumptions are taken from the U.S. International Trade 

Commission Report entitled[,] U.S. Agricultural Sales to Cuba: Certain Economic Effects of U.S. Restrictions,

USITC Publication 3932, July 2007. For the Long Run 7-day stay scenario, 2.0 million visitors spend $60 per day 

each. For all scenarios, it is assumed that the U.S. achieves 40 percent of the market share for these food expenditures and the export pattern follows the U.S. export pattern to other Caribbean nations for consumer-oriented food 

products. 

Note: for supporting sectors, there are no exports resulting in N/A for those export values. 

Assuming U.S. visitors remain in Cuba for a 7.0 day stay and spend $60/day on 

food results in additional U.S. exports of $336 million/year (Table 1). These additional exports would require $810.5 million in business activity, for a total economic 

impact of $1.15 billion, which would support 5,456 new jobs. 

The total business activity due solely to new exports is $433.6 million. In terms 

of the impacts by sector due to increased exports, $94.2 million is attributed to frozen broilers/turkeys and eggs, $59.6 million to pork, beef and edible offal, $41.3 to 

processed foods, $28.8 million to flour and malt products, $28.3 dry milk and cheese, 

$23.3 to canned/preserved fruits and vegetables, $20.1 million to fruits, $19.2 million to soft drinks, $18.7 to wine/beer/distilled sprits, $17.6 to fats/oils, $14 million 

to bakery goods, and $10.4 million to vegetables and melons. Other important impacts occur in snack foods, sugar, breakfast foods, confectionaries, seafood and frozen desserts. 

The business activity attributed to important non-export sectors includes: other 

agriculture such as grain and oilseed production, ranching, forestry and fishing 

($96.9 million), business services ($76.8 million), petroleum ($60.4 million), other 

food processing ($55.8 million), real estate ($50.5 million), finance ($48.4 million), 

transportation ($33.5 million), food, drink and retail ($30.6 million), health care 

($27.5 million), and forestry ($21.3 million). 

More than 3⁄4 of the jobs associated with these additional exports, 4,202, occur in 

the non-export sectors. Other agriculture accounts for 1,062 jobs, followed by business services (582 jobs), food and drink retail (507), health care (303), wholesale 

trade (247), transportation (194), finance (186), and real estate (181). All of the 

other sectors account for 785 jobs. 

Economic Impacts of Modifying Payment Terms and Financial Requirements 

Reducing the cost and time necessary to process payment for U.S. exports to Cuba 

would have major economic impacts in terms of increased exports and economic activity. U.S. exports to Cuba would be expected to rise by $271.2 million/year, requiring an additional $561.9 million in business activity for a total economic impact of 

$833.1 million and supporting 4,478 new jobs (Table 2). 

Processed and other food products sectors are estimated to require $246.6 million 

in business activity and 1,228 new jobs to support additional exports to Cuba. Grain 

sectors, mainly corn, rice and wheat, would require $87 million in additional business activity and 767 new jobs. Dairy products would require $40.3 million in additional business activity, followed by poultry products ($30.9 million), forestry products ($23.2 million), beef, pork and edible offal ($20 million), seafood ($12.1 million), 

soybean meal and oil ($12.2 million), and animal feeds ($9.9 million). There would 

be 1,138 new jobs required to produce and market these additional exports to Cuba. 

Most of these jobs would be concentrated in the grains sector (767), poultry (141) 

and forestry (97). 

Important economic impacts would occur among the non-export sectors as well. 

In fact, about 42 percent of the business activity and 47 percent of the jobs are associated with non-export sector production. Other agriculture business activity is estimated to be $72 million, followed by petroleum at $34.6 million, business services 

($32.2 million), real estate ($30 million), food, drink and retail ($23.8 million), finance ($22.9 million), wholesale trade ($20.5 million), health care ($13.2 million), 

and forestry ($6.8 million). 

26

There are 2,112 new jobs required in the non-export sectors to support additional 

exports to Cuba. The major sectors impacted are other agriculture (641), business 

services (250), health care (145), food, drink and retail (133), real estate (120), 

wholesale trade (105), finance (95) and transportation (85).

Table 2. Estimated Economic Impacts of Elimination of U.S. Restrictions on 

Financing Exports and Restrictions on Travel to Cuba 

Million Dollars 

Removal of Finance

Restrictions 

Removal of Finance and 

Travel Restrictions 

Exports 

Total

Business 

Activity 

Exports 

Total

Business 

Activity 

Top Exported Products

Grains (Rice, Wheat, Corn) $78.7 $87.2 $122.7 $134.7

Other Food and Ag Products $49.5 $161.6 $57.5 $187.8

Dry Milk and Other Dairy $35.0 $40.4 $50.0 $57.8

Poultry Meats $27.3 $30.9 $35.2 $40.0

Processed Food Products $26.0 $84.9 $34.5 $112.7

Wood Products (Lumber) $21.5 $23.2 $21.5 $23.3

Pork, Beef and Products $14.5 $20.0 $18.8 $25.9

Seafood Products $11.5 $12.1 $15.0 $15.8

Soy Complex $5.9 $12.2 $8.1 $16.7

Top Supporting Sectors

Other Ag Related N/A $72.0 N/A $92.1

Business Services N/A $32.2 N/A $43.6

Real Estate N/A $29.7 N/A $41.6

Financial Services N/A $22.9 N/A $31.6

Wholesale Trade N/A $20.5 N/A $27.9

Total Estimated Impacts

Business Activity $271.2 $833.1 $365.2 $1,104.1

Employment (# of Jobs) 2,366 4,478 3,104 6,004

Assumptions for increased exports are based upon the U.S. International Trade Commission Report entitled[,] 

U.S. Agricultural Sales to Cuba: Certain Economic Effects of U.S. Restrictions, USITC Publication 3932, July 

2007. USITC estimated percentage changes to 2006 baseline exports were applied to 2009 exports except for rice, 

dairy products, beef, seafood, and wood products. For the latter set of products, the USITC estimated exports were 

used. Other Food and Ag Products include fresh horticultural products, cotton, livestock, and seeds for planting. 

Note: for supporting sectors, there are no exports resulting in N/A for those export values. 

Economic Impacts of Removing Financial Constraints and Allowing Travel 

to Cuba 

There are some additional economic benefits of allowing increased travel, while 

simultaneously removing financial constraints on U.S. exports to Cuba. U.S. exports 

are estimated to rise by $365.2 million/year, while the total economic impact would 

be $1.1 billion, requiring 6,004 new jobs (Table 2). 

As in the previous analyses, most of the major gains in business activity would 

occur for food products and processed foods ($300.5 million), grains ($134.7 million), 

dairy ($57.8 million), poultry ($40 million), beef/pork ($25.9 million), forestry ($23.3 

million), seafood ($15.8 million), the soy complex ($16.9 million), and animal feeds 

($13.3 million). 

Major gains in business activity would also occur for non-export sectors as well. 

Other agriculture would require $92 million, followed by petroleum ($48.3 million), 

business services ($43.6 million), real estate ($41.6 million), finance ($31.6 million), 

wholesale trade ($27.9 million), food, drink and retail ($32.4 million), transportation 

($18.4 million), health care ($17.8 million), food processing ($11.3 million) and forestry ($9.2 million). 

Employment occurring in non-export sectors would be expected to increase by 

2,864 jobs. Major gains in employment would occur for other agriculture (857), business services (339), food, drink and retail (326), health care (196), real estate (172), 

finance (131), wholesale trade (143), and transportation (114). All other sectors 

would require 536 jobs to support additional exports to Cuba. 

Summary and Conclusions 

If H.R. 4645, the Travel Restriction Reform and Export Enhancement Act, is implemented as proposed, it is estimated that it would have substantial positive economic impacts on the U.S. economy. Exports to Cuba would increase by $365 million/year and would support $739 million in additional business activity for a total 

economic impact of $1.1 billion, requiring 6,000 new jobs. While there are major economic gains for U.S. agriculture, there are also important economic gains for nonVerDate 0ct 09 2002 14:21 Oct 19, 2016 Jkt 041481 PO 00000 Frm 00030 Fmt 6633 Sfmt 6621 P:\DOCS\114-57\21608.TXT BRIAN
27

agricultural sectors such as business services, financial institutions, real estate, 

wholesale and retail trade, petroleum and health care services. 

If only the travel restrictions are removed, it is estimated that U.S. exports would 

increase by $48.4 million/year in the short run and by $336 million/year over the 

long run, requiring 5,456 new jobs. Alternatively, if only the payment and financial 

restrictions are modified, U.S. exports are estimated to increase by $271.2 million/

year, requiring an additional $561.9 million in business activity for a total economic 

impact of $833.1 million and supporting 4,478 new jobs. 

The results of these analyses indicate that U.S. agricultural producers, input suppliers, agribusiness firms, food processors, business services suppliers, the financial 

sector, real estate, health care, oil, gas and petroleum suppliers, transportation companies, trade facilitators, and port authorities in many parts of the United States 

can expect additional economic gains if H.R. 4645 is implemented and U.S. exports 

to Cuba expand. Improved access to the Cuban market is more important now that 

new competition has emerged and the U.S. market share is threatened, especially 

for dominant U.S. products such as soybean meal, corn, wheat, rice, poultry and dry 

milk. Increased access for U.S. travelers is also important for stimulating demand 

for U.S. foods in Cuba over the next few years as economic recovery occurs and U.S. 

firms become better positioned to respond to global market opportunities.

The CHAIRMAN. Thank you, Dr. Ribera. Mr. Claver-Carone. 

STATEMENT OF MAURICIO CLAVER-CARONE, J.D., EXECUTIVE 

DIRECTOR, CUBA DEMOCRACY ADVOCATES, WASHINGTON, 

D.C. 

Mr. CLAVER-CARONE. Thank you, Mr. Chairman, Ranking Member, and Members of the Committee. It is truly a privilege to be 

here with you today to discuss these important and consequential 

issues surrounding U.S. agricultural trade with Cuba. I commend 

you for including a dissenting voice on this panel, and I am pleased 

to join my colleagues here, all of whom I have great respect for. 

My name is Mauricio Claver-Carone, and I am the Executive Director of Cuba Democracy Advocates, a nonprofit, nonpartisan organization dedicated to the promotion of human rights democracy and 

the rule of law in Cuba. 

As you are surely aware, pursuant to TSRA, the sale of agricultural commodities, medicine, and medical devices to the Castro regime in Cuba was authorized by Congress with an important caveat; that it must be for cash-in-advance. Prior to that, the export 

of food, medicine, and medical devices to the Cuban people had already been authorized under the Cuban Democracy Act of 1992. 

This is an important distinction that needs to be made, for in order 

to have a productive discussion about ag trade with Cuba, we need 

to understand how that island’s totalitarian regime conducts business. 

In most of the world, trade means dealing with privately owned 

and operated corporations, but that is not the case in Cuba. In 

Cuba, foreign trade and investment is the exclusive domain of the 

State; namely, the Castro regime. There are no exceptions. A noteworthy fact for all of us to remember. In the last 5 decades, every 

single foreign trade transaction with any country in the world with 

Cuba has been with a State entity, or with an individual acting on 

behalf of the State. The State’s exclusivity regarding trade and investment remains enshrined in Castro’s 1976 Constitution, Article 

18. 

Since the passage of TSRA in 2000, over $5 billion in ag products 

have been sold to Cuba from the United States, but it is a very unpleasant fact, however, that all of those sales, by more than 250 

28

privately owned U.S. companies, were made to only one Cuban 

buyer: the Castro regime. Hence, another unpleasant fact: all business decisions in Cuba are based on political and control-based calculations of the Castro regime. They are not based on market 

forces. If the Cuban people enjoyed property rights and were able 

to establish their businesses and freely partake in foreign trade 

and investment, my testimony here today would be very, very different. 

Over the years in this same committee room I have heard testimony professing that the easing of sanctions, the redefining of 

cash-in-advance, the improvement of U.S. relations, increase of 

travel to the island, that that was going to benefit U.S. farmers. 

As we know, since December 17, 2014, the Obama Administration 

has done just that. As part of those concessions, the Obama Administration redefined cash-in-advance to ease payment terms, American travel has increased by 50 percent, Cuba’s GDP grew last year 

by four percent, diplomatic relations were established. I lost count 

on all the business and ag delegations that have gone down to 

Cuba. So surely, these sales have dramatically increased, right? 

No. To the contrary. They have plummeted by nearly 40 percent in 

2015, and during the first quarter of 2016, the slide continues as 

ALIMPORT, through the regime, purchased now only $63 million 

of U.S. agricultural products. It is a further 21 percent drop this 

year. 

Of course, those of us who understand how the Castro regime operates are not surprised for his long-used agricultural sales as a 

tool of political influence. 

Let me be absolutely clear. Those of us who support sanctions 

and oppose financing transactions with the Castro regime do not do 

with the intent of harming American farmers. And conversely, I 

know that American farmers do not seek to sell their products with 

the intent of supporting or subsidizing the Castro regime. American farmers are the best in the world, and we share the desire to 

establish and expand markets. And as a matter of fact, I am sure 

that Cuban Americans in Florida consume more rice than any 

amount ever sold to Cuba pre- or post-1959, and we will continue 

to proudly do so. However, the ag groups represented here today 

remain steadfast in this desire to provide financing to Cuba, but 

that proposition must be weighed by serious factual considerations 

regarding the troubling structure of Cuba’s business entities, military-run monopolies; its beneficiaries, the Castro regime and its 

cronies; the rights of victims, both Cubans and Americans; and 

whether such practices are in the U.S.’s security interest. 

I believe that these safeguards, which we will discuss today, fall 

essentially into three categories. First, protect American taxpayers. 

Cuba ranks amongst the world’s worst credit risk and debtor nations. Thus, I am confident we all agree that American taxpayers 

must not be exposed to any direct bailout of the Castro regime. 

Protect American victims of stolen property. According to InterAmerican Law Review, the Castro regime’s confiscation of U.S. assets was the largest uncompensated taking of American property 

by a foreign government in history. There are over 6,000 unpaid 

certified claims, worth $7 billion. Many of the ports and infrastructure used for ag sales to Cuba were stolen from your fellow AmeriVerDate 0ct 09 2002 14:21 Oct 19, 2016 Jkt 041481 PO 00000 Frm 00032 Fmt 6633 Sfmt 6601 P:\DOCS\114-57\21608.TXT BRIAN
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cans. That needs to be addressed. We should not have Americans 

essentially having their rights trampled upon by other Americans, 

and that is something very important. Farmers understand the importance of these property rights, because that is at the core of 

farming. Thus, I am sure that American farmers appreciate the injustice in that regard. And finally, concerning the third safeguard 

is to prevent support for Cuban military entities. The Cuban military owns GAESA, and the AP this week and had an expose ́ of how 

the Cuban military is essentially gaming the Obama Administration’s travel regulations, and has taken over the biggest foreign 

trade bank, Banco Financiero Internacional, and hotel companies. 

Your colleagues, the Chairman of the Intelligence Committee, 

Devin Nunes, and the Chairman of the Armed Services Committee, 

Mac Thornberry, anticipated this trend and introduced the Cuban 

Military Transparency Act, which seeks to ensure that any amount 

of resources to Cuba, pursuant to any changes, truly reach the 

Cuban people and are not funneled through the military’s entities 

and armed forces. That is a huge safeguard, and the same way that 

those companies were taken over, our concern is that as soon as 

financing comes through, our ALIMPORT will also be taken over 

by the military in the snap of a finger. 

Thank you, sir. That concludes my remarks. 

[The prepared statement of Mr. Claver-Carone follows:]

PREPARED STATEMENT OF MAURICIO CLAVER-CARONE, J.D., EXECUTIVE DIRECTOR, 

CUBA DEMOCRACY ADVOCATES, WASHINGTON, D.C. 

Thank you, Mr. Chairman, Ranking Member, and Members of the Committee. 

It’s truly a privilege to join you here today to discuss important and consequential 

issues surrounding U.S. agricultural trade with Cuba. I commend you for including 

a dissenting voice on this panel. 

My name is Mauricio Claver-Carone and I’m the Executive Director of Cuba Democracy Advocates, a nonprofit, nonpartisan organization dedicated to the promotion of human rights, democracy and the rule of law in Cuba. 

My testimony will be divided into two parts. First, I would like to present key 

facts regarding agricultural trade with Cuba and highlight the counter-productive 

trends we are seeing since President Obama announced a new policy of unconditional engagement with the Castro regime on December 17, 2014. Second, I would 

like to focus on the issue of financing agricultural sales to Cuba, which I understand 

is a priority for my fellow panelists, with the good faith and disposition to find common ground. 

The Reality of Trade With Cuba 

As you are surely aware, pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (‘TSREEA’), the sale of agricultural commodities, medicine 

and medical devices to the Castro regime in Cuba was authorized by Congress, 

with one important caveat—these sales must be for ‘‘cash-in-advance.’’ Prior to that, 

the export of food, medicine and medical devices to the Cuban people had already 

been authorized under the Cuban Democracy Act of 1992 (‘CDA’). 

This is an important distinction that needs to be made, for in order to have a productive discussion about agricultural trade with Cuba, one should understand how 

the island’s totalitarian regime conducts business. 

In most of the world, trade means dealing with privately-owned or operated corporations. That’s not the case in Cuba. In Cuba, foreign trade and investment is the 

exclusive domain of the state, namely the Castro regime. There are no ‘‘exceptions.’’

Here’s a noteworthy fact: In the last 5 decades, every single ‘‘foreign trade’’ transaction with Cuba has been with a state entity, or individual acting on behalf of the 

state. The state’s exclusivity regarding trade and investment remains enshrined in 

Article 18 of Castro’s 1976 Constitution. 

Since the passage of TSREEA in 2000, over $5 billion in U.S. agricultural products have been sold to Cuba. It is an unpleasant fact, however, that all of those 

30

sales by more than 250 privately-owned U.S. companies were made to only one 

Cuban buyer—the Castro regime. 

As the U.S. Department of Agriculture’s (‘USDA’) own report on Cuba notes, ‘‘The 

key difference in exporting to Cuba, compared to other countries in the region, is that 

all U.S. agricultural exports must be channeled through one Cuban Government 

agency, ALIMPORT.’’ 

ALIMPORT is an acronym for Empresa Cubana Importadora de Alimentos, S.A.

It is a subsidiary of Cuba’s Ministry of Foreign Trade and serves as the sole procurement agency for U.S. agricultural products. Throughout the years, the Castro 

regime has ensured the Ministry of Foreign Trade is run by senior officials from 

Cuba’s intelligence services (known as Directorio General de Inteligencia, or ‘DGI’). 

The current Minister of Foreign Trade is a DGI official, Rodrigo Malmierca Dı ́az, 

who is the son of Isidoro Malmierca Peoli, a historic Castro family confidant and 

founder of Cuba’s counter-intelligence and state-security services. 

Hence another unpleasant fact: All business decisions in Cuba are based on the 

political and control-based calculations of the Castro regime—not on market forces. 

If the Cuban people enjoyed property rights to establish their businesses and were 

allowed to freely partake in foreign trade and investment—my testimony today 

would be very different. 

ALIMPORT primarily supplies government institutions, and the Cuban military’s 

hard currency retail stores (known as Tiendas de Recuperacio ́n de Divisas, ‘TRDs’), 

hotels and other facilities that cater to tourists and other foreigners. 

So let’s immediately debunk a myth: Financing agricultural transactions with 

Cuba is not about assisting small and midsize farmers on the island, but about financing a monopoly of the Castro regime. 

Again, as the USDA itself recognizes: ‘‘U.S. food products will be sold and delivered to A[LIMPORT], which will take control of the imports at the Cuban point of 

entry, manage distribution throughout Cuba and coordinate payments. Consequently, 

U.S. agricultural firms planning on doing business with Cuba need to learn to negotiate and transact business with the Cuban [G]overnment through A[LIMPORT].’’

As a result, we already know what any further lifting sanctions towards Cuba 

would look like. TSREEA sales from the U.S. and business ventures with other nations exhibit the model: A mercantilist system whereby commerce is simply a tool 

to benefit and strengthen its totalitarian regime. 

President Obama’s Policy Changes Have Proven Counter-Productive 

President Obama’s policy of unilaterally easing sanctions has proven to be 

counter-productive for agricultural sales to Cuba. But before focusing on those figures, it’s important to note how President Obama’s new policy has broadly proven 

to yield counter-productive results. 

For example, since December 17th, 2014:

• Political arrests have intensified. Throughout 2015, there were more than 

8,616 documented political arrests in Cuba. Thus far, there have already been 

over 7,935 political arrests during the first 8 months of 2016. This represents 

the highest rate of political arrests in decades and nearly quadruples the tally 

of political arrests throughout all of 2010 (2,074), early in Obama’s presidency.

• A new Cuban migration crisis has unfolded. The United States is faced 

with the largest migration of Cuban nationals since the rafters of 1994. The 

number of Cubans fleeing to the United States in 2015 was nearly twice that 

of 2014. Some 51,000 Cubans last year entered the United States and this 

year’s figures will easily surpass that. The numbers of Cuban nationals fleeing 

the island have now quintupled since President Obama took office, when it 

was less than 7,000 annually.

• Castro’s military monopolies are displacing ‘‘self-employed’’ workers.

There are fewer licensed ‘‘self-employed’’ workers in Cuba today than in 2014. 

In contrast, Castro’s military monopolies are expanding at record pace. The 

Cuban military-owned tourism company, Gaviota S.A., announced 12% growth 

in 2015 and expects to double its hotel business this year. Even the limited 

spaces in which ‘‘self-employed’’ workers previously operated are being squeezed 

as the Cuban military expands its control of the island’s travel, retail and financial sectors of the economy.

• Internet ‘‘connectivity ranking’’ has dropped. The International Telecommunication Union’s (ITU) Measuring the Information Society Report for 

2015, the world’s most reliable source of data and analysis on global access to 

information and communication. ITU has dropped Cuba’s ranking to 129 from 

119. The island fares much worse than some of the world’s most infamous supVerDate 0ct 09 2002 14:21 Oct 19, 2016 Jkt 041481 PO 00000 Frm 00034 Fmt 6633 Sfmt 6621 P:\DOCS\114-57\21608.TXT BRIAN
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pressors of the Internet suppressors, including Zimbabwe (127), Syria (117), 

Iran (91), China (82) and Venezuela (72).

• Religious freedom violations have increased tenfold. According to the 

London-based NGO, Christian Solidarity Worldwide (‘CSW’), last year 2,000 

churches were declared illegal and 100 were designated for demolition by the 

Castro regime. Altogether, CSW documented 2,300 separate violations of religious freedom in 2015 compared to 220 in 2014. In the first half of 2016, there 

have already been 1,606 separate violations of religious freedom.

• Democracy’s regional foes have been emboldened. President Obama’s unconditional recognition and engagement of the sole remaining dictatorship in 

the Western Hemisphere has sent a message to Castro’s allies in the region that 

there are no consequences for rogue and undemocratic behavior. Hence the recent militarization (with Cuba’s support) of Venezuela’s regime and the parliamentary coup in Nicaragua. 

Agricultural Sales Have Not Escaped This Downward Trend 

Over the years, in this same Committee room, I have heard testimony professing 

that an easing of sanctions; re-defining of ‘‘cash-in advance’’; improving U.S.-Cuba 

relations; and an increase in travel to the island, would benefit U.S. farmers. And, 

as we all know, since December 17th, 2014, the Obama Administration has engaged 

the Castro regime and extended a litany of unilateral concessions. 

As part of these concessions, the Obama Administration has redefined ‘‘cash-inadvance’’; eased payment terms for agricultural sales; American travel to Cuba has 

increased by over 50%; Cuba’s GDP grew last year by over 4%; diplomatic relations 

were established; and endless U.S. business and trade delegations have visited Havana. Yet, U.S. agricultural exports to Cuba plummeted by nearly 40% in 2015. During the first quarter of 2016, the slide continued, as ALIMPORT purchased only $63 

million in U.S. agricultural products. That is an additional 21% percent drop from 

the same period in 2015. These are the lowest numbers since the United States authorized agricultural exports to the Castro regime in 2000. 

Of course, those who understand how the Castro regime operates are not surprised—for it has long used agricultural sales as a tool of political influence. 

As a 2007 report of the U.S. International Trade Commission (‘ITC’) confirmed: ‘‘A[LIMPORT] reportedly initiated a policy in 2003 that limited or ceased purchases 

from U.S. companies that did not actively lobby the U.S. Government for changes 

to laws and regulations regarding trade with Cuba. Purchases are also allegedly 

geared to particular U.S. States or Congressional districts in an effort to heighten 

local interests in pressing the Administration to normalize trade with Cuba.’’ Today is no different. The Castro regime wants the U.S. Congress to lift tourism, 

financing and investment sanctions that would overwhelmingly benefit its military 

monopolies, so it is putting on the squeeze. 

Financing Agricultural Sales to Cuba 

We will surely hear testimony today about Cuba being one of the U.S.’s largest 

export markets pre-1959 and how we need to ‘‘recapture’’ it. Politics aside, I would 

caution that Cuba’s economy is nowhere near the same today as it was throughout 

its pre-1959 history, when it was free-market oriented, with a dynamic private-sector, property rights, and among the largest middle class and highest per capita income in Latin America at the time. Today, Cuba is a totalitarian dictatorship, with 

a centralized control economy and the lowest per capita income in Latin America. 

We will also surely hear testimony about Cuba purchasing rice from Brazil and 

Vietnam, instead of from the United States, as a result of the prohibition on U.S. 

financing for agricultural sales. But I would caution that Brazil and Vietnam’s rice 

sales to the Castro regime are heavily state-subsidized and made pursuant to political arrangements. They are not based on competitive terms and rates. I would further argue that the recent downfall of the socialist government in Brazil—and its 

shady financing deals with the Castro regime that are currently under investigation 

by the Brazilian authorities—may lead to a bigger increase in U.S. rice sales to 

Cuba than anything the U.S. Congress could do. 

Finally, we will surely hear many theories and estimates about how much more 

money one commodity sector or another—or one state or another—can make from 

exports to the Cuba, if U.S. sanctions were further eased or lifted. However, as 

we’ve learned from the dramatic decline in agricultural sales figures over the last 

year—despite the Obama Administration easing of sanctions and establishing diplomatic relations with the Castro regime—that is hardly guaranteed. 

Let me be absolutely clear. Those of us who support sanctions and oppose the financing of transactions with the Castro regime do not do so with the intent of harmVerDate 0ct 09 2002 14:21 Oct 19, 2016 Jkt 041481 PO 00000 Frm 00035 Fmt 6633 Sfmt 6621 P:\DOCS\114-57\21608.TXT BRIAN
32

ing American farmers. Conversely, I know that American farmers do not seek to sell 

their products with the intent of supporting or subsidizing the Castro regime. 

American farmers are the best in the world and we all share their desire to establish and expand markets. As a matter of fact, I’m sure Cuban Americans in Florida 

consume more rice than any amount ever sold to Cuba pre- or post-1959. However, 

the agricultural groups represented here today remain steadfast in their desire for 

the financing of agricultural sales to Cuba and there is even legislation before this 

Committee to that end. 

But any such proposition must be weighed by serious factual considerations regarding the troubling structure of Cuba’s business entities (military-run monopolies), its beneficiaries (the Castro family and regime cronies), the rights of its victims (both Cubans and Americans), and whether such practices are in the U.S.’s security interests. 

Thus, the question comes down to: How to authorize private financing for U.S. 

agricultural sales to Cuba without subsidizing its derelict regime and in a manner 

consistent with U.S. security interests and the rights of victims? 

We are obviously not going to resolve this challenge today. But hopefully, this discussion can be helpful in understanding each other’s concerns and in highlighting 

important safeguards that could address broader policy implications. 

These Safeguards Fall Into Three Categories 

1. Protect American Taxpayers 

Cuba ranks among the world’s worst credit-risks and debtor nations. Moody’s Investors Service gives Cuba’s sovereign debt a Caa2 rating, which translates into 

‘‘very high credit risk.’’

Despite highly publicized (and politicized) debt forgiveness concessions from Russia and the Paris Club, Cuba still owes upward of $75 billion to a long international 

list of creditors. As recently as 2010, Reuters reported how Cuba ‘‘failed to make 

some debt payments on schedule beginning in 2008, and then froze up to $1 billion 

in the accounts of foreign suppliers by the start of 2009.’’ That should make anyone 

unwise enough to leave money sitting in a Cuban bank account reconsider. 

And just a few months ago, on July 8th, 2016, General Rau ́l Castro stated, in his 

own words: ‘‘I should recognize that there have been some delays in current payments to creditors.’’ 

I am confident we all agree that American taxpayers must not be exposed to any 

direct bailout of the Castro regime. It is for this reason that TSREEA includes a 

prohibition (Sec. 7207(a)) on United States assistance, which reads:

‘‘No United States Government assistance, including United States foreign assistance, United States export assistance, and any United States credit or guarantees shall be available for exports to Cuba.’’

But American taxpayers should also not be exposed to any indirect bailout of the 

Castro regime. Thus, TSREEA should further be supplemented by a prohibition in 

the Internal Revenue Code that would prevent any losses stemming from commercial transactions with Cuba’s regime—pursuant to Obama’s policy changes—from 

being deducted when calculating business taxes. 

2. Protect American Victims of Stolen Property 

According to the Inter-American Law Review, the Castro regime’s confiscation of 

U.S. assets was the ‘‘largest uncompensated taking of American property by a foreign 

government in history.’’ Unfortunately, President Obama’s policy of expanding business transactions with the Castro regime is already encouraging American companies to traffic and exploit properties stolen from other fellow Americans. Any expansion of such transactions by the U.S. Congress would further expose American victims. 

There are nearly 6,000 unpaid, certified claims, worth nearly $7 billion arising 

from the Castro regime’s confiscation of American-owned business and properties. 

They include many of the ports and other infrastructure used for agricultural exports to Cuba. 

American farmers understand the importance of property rights. Property is the 

very core of farming. As such, it is easy for farmers to appreciate the injustice of 

having your property stolen, and then co-opted, exploited and marketed to someone 

else to the benefit of the thief. This injustice must be corrected and resolved for the 

victims. Part of that solution will involve restitution from those collaborators who 

have knowingly benefited from the theft. The injustices occurring today in Cuba regarding confiscated property must be resolved; U.S. law promises that it will, and 

it is not just the Castro regime that is on the hook. 

33

It is for this reason that Section 103 of the 1996 Cuban Liberty and Democratic 

Solidarity Act (‘Libertad Act’) contains a prohibition on the indirect financing of 

Cuba, which states:

‘‘No loan, credit, or other financing may be extended knowingly by a United 

States national, a permanent resident alien, or a United States agency to any 

person for the purpose of financing transactions involving any confiscated property the claim to which is owned by a United States national.’’

The American victims of stolen property in Cuba must not only remain protected 

from any financing involving their property, but they should be provided recourse. 

Unfortunately, President Obama is denying any recourse—through his waiver of 

Title III of the Libertad Act—to Americans who are now seeing their property rights 

trampled upon by other fellow Americans. That used to be unimaginable. If the 

Obama Administration is unwilling to protect the rights of grieved Americans, then 

a private right of action should allow for the victims to do so directly through the 

rule of law. 

As such, the U.S. Congress should pass legislation to end the President’s waiver 

authority over Title III of the Libertad Act and grant Americans the legal standing 

to pursue justice. 

3. Prevent Support for Cuban Military Entities 

Today, the Cuban military owns and operates one of the largest conglomerates in 

Latin America, known as the Grupo de Administracio ́n Empresarial, S.A., or 

GAESA. Its portfolio includes companies that dominate ports, trade zones, tourist 

attractions, restaurants, hotels, real estate, retail stores, currency exchanges, gas 

stations, airlines, and other transportation services. Its head, Gen. Luis Alberto 

Rodrı ́guez Lo ́pez-Callejas, is Rau ́l’s son-in-law. 

Far from empowering Cuba’s small sector of ‘‘self-employed’’ residents, the Castro 

regime is taking full advantage of President Obama’s new policy to accelerate the 

military’s holdings of every entity poised to benefit from current U.S.-Cuba relations. 

As an Associated Press report this weekend confirmed: ‘‘the [Cuban] military’s 

long-standing business wing, GAESA, assumed a higher profile after Gen. Rau ́l Castro became President in 2008, positioning the armed forces as perhaps the prime 

beneficiary of a post-de ́tente boom in tourism. Gaviota, the military’s tourism arm, 

is in the midst of a hotel building spree that outpaces projects under control of 

nominally civilian agencies like the Ministry of Tourism. The military-run Mariel 

port west of Havana has seen double-digit growth fueled largely by demand in the 

tourism sector. The armed forces this year took over the bank that does business 

with foreign companies, assuming control of most of Cuba’s day-to-day international 

financial transactions, according to a bank official.’’

Let there be no doubt, the Cuban military is already encroaching into the U.S. 

agricultural trade sphere, which is currently under the direction of the nominallycivilian Ministry of Foreign Trade. However, if Congress were to authorize any financing for agricultural sales to Cuba, I guarantee that GAESA would absorb 

ALIMPORT as swiftly—with no legal process and lack of transparency—as it recently did Habaguanex, S.A. and Banco Financiero Internacional. (Both were the 

focus of the AP story referenced in the prior paragraph). 

With great foresight, just a few months after President Obama announced his new 

Cuba policy, the Chairman of the House Intelligence Committee, U.S. Rep. Devin 

Nunes (Cal.), and the Chairman of the House Armed Services Committee, U.S. Rep. 

Mac Thornberry (Tex.), anticipated this trend and introduced the Cuban Military 

Transparency Act (H.R. 2937), which seeks to ensure that any increase in resources 

to Cuba—pursuant the Obama Administration’s recent policy changes—truly reach 

the Cuban people and are not funneled through the Castro regime’s armed forces. 

After all, these are the same Cuban armed forces that recently held a stolen U.S. 

Hellfire missile for nearly 2 years; that have been caught twice internationallysmuggling heavy weaponry, including the worst sanctions violations ever to North 

Korea; that oversee the most egregious abuses of human rights in the Western 

Hemisphere; that are subverting democracy in Venezuela and exporting surveillance 

systems and technology to other countries in the region; that welcome Russian military intelligence ships to dock in their ports; that share intelligence with the world’s 

most dangerous anti-American regimes; and of which three senior Cuban military 

officers remain indicted in the United States for the murder of four Americans. 

As such, I would urge that this important piece of legislation, introduced by your 

national security counterparts, remain the priority of any Cuba policy consideration 

by the U.S. Congress. 

34

Mr. Chairman, this concludes my testimony. Again, I thank you for the opportunity to testify today. I look forward to continuing this important discussion and 

working in furtherance of our common interests.

The CHAIRMAN. Well, I thank our witnesses. Well, I thought I 

lost the script. The chair would remind Members that they will be 

recognized for questioning in order or seniority for Members who 

were here at the start of the hearing. After that, Members will be 

recognized in order of arrival. And I appreciate Members’ understanding. 

I recognize myself now for 5 minutes. 

Well, I thank the witnesses for being here this morning. This is 

the clearest example of two sides to the story we could possibly 

have, and I appreciate the respect with which all of our witnesses 

treated the subject. This is a big deal, and I understand that. 

Mr. Isbell, I appreciate your acknowledgement that the privilege 

of getting off your tractor and coming here and petitioning your 

Congress, jacking us up about something you think is important. 

My mind went immediately to that Cuban farmer. He is not about 

to get off whatever it is he is on, and go try to petition his government for anything that is going on, so clearly, we have some stuff 

to get done in this regard. 

Dr. Ribera, yesterday, and staff, you made an interesting comment that, in your view, people first want food, and then they want 

work, and then they want to decide their own destiny. Would you 

help the rest of us understand what you meant by each of those 

three points, and why you put them in that particular order, and 

what is going on there in your mind? 

Dr. RIBERA. Sure. Thank you for the opportunity again. And I 

have been to Cuba a couple of times; the first time in April of last 

year, and then February this year. And I saw a lot of changes. And 

what I do, because I speak Spanish, is just, instead of talking to 

Cuban Government, I talk to people. And I saw a big change and 

a little bit of hope from people on my second trip, as opposed to 

the first one. And I believe that, as people, the person that I talked 

to was a young father, 25 years old, has a wife and a little kid, and 

he said, ‘‘I work really hard just to get food to my family, to provide 

for my family, but the future it doesn’t look very well.’’ Basically, 

it looked like he didn’t have any hope. And it really hit me when 

I talked to him because he is young, and that is going to be passing 

to the next generation as well. 

On my second trip, because of the things that had happened with 

President Obama and different changes, I talked to people just in 

the Maleco ́n area and they said, ‘‘Things are getting better, we 

have food, we have the hope that the embargo is going to be lifted 

or some things are going to change,’’ but they still believe that they 

are going to stay as a communist country. They don’t talk about 

that. But what I think is going to happen, and this is just me 

thinking, is that once they reach this other point that they have 

food, that they have the necessities, they want to be able to decide 

what their kids are going to be in the future. 

The CHAIRMAN. Mr. Isbell, you may not have this number off the 

top of your head, but, I am trying to get a sense of what percent 

of the increased rice sales to Cuba would be vis-a`-vis total U.S. rice 

35

production. Where would the 138,000 tons fit in that in the nearterm goal? What percentage of rice production would that be? 

Mr. ISBELL. On a percentage, I wouldn’t have that number off the 

top of my head, we can get back to you on that. But, I can say it 

is significant in comparison with some of our other markets. If you 

see, for instance, we have worked hard on sales recently to places 

like Iraq, and things like that. You get maybe 90,000 metric ton 

tender, and it moves the market, it moves the market significantly. 

We welcome when we see those types of demand come into the 

marketplace. So I am convinced that 135,000 metric tons, I don’t 

know the exact percentage but it is a significant effect. 

The CHAIRMAN. Thank you. 

If you wouldn’t mind, I am sure Ben or somebody could get that 

for us. 

Mr. ISBELL. Yes, we will get that to you. 

The CHAIRMAN. I guess the other question would be is: exports 

into Cuba peaked in 2008 under even the most restricted financing 

terms the Bush Administration had, and now it has dropped to 

$149 million, which is pretty small. Do you see any evidence that 

the Cuban regime is targeting states and/or Congressional districts 

to buy specific products in order to have an impact on that Member’s judgment? Do you all see any of that going on? 

Mr. ISBELL. Personally, no. 

The CHAIRMAN. All right. I appreciate that. 

Mr. CLAVER-CARONE. I do. 

The CHAIRMAN. All right. Mauricio. 

Mr. CLAVER-CARONE. I do. I mean it is abundantly clear, and not 

just me, the International Trade Commission, in a 2007 report, acknowledged that the Castro regime particularly targets states and 

districts with certain agriculture populations in order to indirectly 

influence the United States Congress. That was the International 

Trade Commission not me. 

The CHAIRMAN. And what year was that? 

Mr. CLAVER-CARONE. It was a 2007 report that they did, and it 

was repeated in the recent report that International Trade Commission did. 

The CHAIRMAN. All right. I appreciate that. 

With that, I yield back. Mr. Peterson, 5 minutes. 

Mr. PETERSON. Well, thank you, Mr. Chairman. 

As I said, I was in Cuba, and as I understand it, the numbers 

that I have for the rice people, that they are paying $242 a ton for 

rice from Vietnam. It is not as good a quality as ours, is that the 

correct number, or in the ballpark? 

Mr. ISBELL. Probably, $240, that seems low. Yes, that seems significantly low. It would be more than that, but I wouldn’t have an 

exact number for you. 

Mr. PETERSON. And our reference price on long grain rice is $308 

a ton, so we are probably comparable in price, although we have 

better quality. 

Mr. ISBELL. Right. 

Mr. PETERSON. So I am right about that? Yes. 

Mr. ISBELL. Within reason, yes. 

Mr. PETERSON. I agree and disagree with the gentleman here on 

the end. I don’t believe under this situation that they are going to 

36

buy anything from us. In talking to this guy from ALIMPORT, or 

however you say it, he has obviously taken direction from the Castros. We met with Miguel Dı ́az-Canel, the Vice President, who 

some people say will take over from the Castros. He is in his fifties. 

He is just as hardline as the Castros are. So, you have one person 

to deal with, and they don’t want to buy from us. And so I go to 

the grocery store and they have chicken from North Carolina, 

which is a big part of our exports. At $5 a pound, if the average 

people can’t buy them, it is only the Embassy people that are buying them and tourists. I am supportive of Mr. Crawford and what 

we are trying to do here, but I just want to caution people, I think 

that these folks are not going to change, and it is because, in their 

words, of the blockade. It is not the embargo, it is the blockade. 

And this has been going on forever down there. 

So where I disagree with the gentleman on the end is that we 

have had this policy for 50+ years and it hasn’t worked, and so I 

don’t know what the other option is, if opening this thing up is 

going to work either, but clearly, what we are doing isn’t working. 

And what I am worried about is this. If we are going to make some 

kind of a deal with Cuba to get them to come into the situation, 

and we are going to actually screw some of the people in the U.S. 

in the process, that is what I am worried about, more than anything else. I am for lifting the embargo if it is straight up and they 

don’t get anything out of it, we just lift it and let the economics 

and the situation take care of itself. In my opinion, that is probably 

the only way the average people are going to ever get to a point 

where they have enough money to buy anything. 

We can pass this bill, I don’t see it is going to make a whole lot 

of difference. Do you have any kind of special insight or relationship with this guy that runs ALIMPORT that thinks that you are 

going to get him to open up this market? 

Mr. ISBELL. No, I don’t, but what I would say is what we saw 

happening in the early 2000s is the perfect test case for what can 

happen again. When we were able to compete under fair terms, 

there were——

Mr. PETERSON. So who was buying it? So I thought that everything that came in had to go through this guy, because it seemed 

to me that even the grocery stores had to buy everything from this 

guy, even the domestic stuff. Am I right? This one guy controls the 

whole thing. I went into the grocery store and I said, ‘‘I want to 

see the sugar, because I have a big sugar district.’’ So they go take 

me over. There is an aisle, it is empty on both sides. And I said, 

‘‘Well, this is the sugar? I thought Cuba produced sugar.’’ Well, 

they only get it once every 2 months, or whatever, and people know 

when it comes in, and then it all disappears and they don’t have 

any for 2 months. As far as I understand it, this guy controls everything, even domestic sales, seems like. Am I right? 

Mr. CLAVER-CARONE. Yes, sir. And I too agree and disagree with 

you in the sense of that I do believe Cuba wants to buy our products U.S. products, but they want us to pay for it. 

Mr. PETERSON. No, they do, yes. 

Mr. CLAVER-CARONE. They don’t want to pay for it, and it is like 

they have done everywhere else in the world. We see in Brazil, 

Vietnam, and they are selling these products, those aren’t competiVerDate 0ct 09 2002 14:21 Oct 19, 2016 Jkt 041481 PO 00000 Frm 00040 Fmt 6633 Sfmt 6601 P:\DOCS\114-57\21608.TXT BRIAN
37

tive terms. As a matter of fact, right now in Brazil the loan terms 

that were given by BNDES, which is the development bank, to the 

Cuban regime are under Federal investigation because it is political. They are political. 

Mr. PETERSON. Yes. One of the things I am worried about is Brazil financed this port, as I understand it, $300–$400 million, 

and they told me that Brazil is talking about giving them a whole 

bunch of money to re-establish their sugar industry, which has 

come apart, and we don’t need any more sugar in the world. We 

have enough of it, we don’t need people going back into something, 

and it would not be economic. They would lose money on it. 

Mr. CLAVER-CARONE. And, Congressman, that now has changed 

with the change of government in Brazil. That loan that was given 

for the Port of Mariel is under Federal investigation by the Brazilian authorities for corruption. 

Mr. PETERSON. Are they going to stop doing that? 

Mr. CLAVER-CARONE. And I argue, funny enough, that the 

change of government in Brazil is going to do more to help U.S. 

rice farmers sell on their current terms than anything we can do, 

financing or otherwise. 

Mr. PETERSON. Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman yields back. Mr. King, 5 minutes. 

Mr. KING. Thank you, Mr. Chairman. I do appreciate this hearing. And I am curious about a number of things here, and I am resisting for the moment the urge to start off on a monologue, but 

I would instead turn my first question to Mr. Gibson. And you 

talked about the share of the market that you could gain if we 

could open up trade with Cuba, or at least open up some credit 

with Cuba. And you say Cuba’s import is zero wheat or rice from 

the U.S. in the last 4 years or so, something like that. And so I 

want to ask you about your concept of the market, and that is then 

who is selling that rice to Cuba, and where is your product going? 

Are people going to, and the real question is this: Are Cubans going 

to eat more if we trade with them, or do we have an alternative 

market that our products go to, regardless of whether it is easy to 

export to Cuba because of the cash restrictions up-front? 

Mr. GIBSON. Well, to answer the first part of your question, people are going to eat. The real question is how much do they have 

to pay for the product. So in the current environment——

Mr. KING. But I am not interested in that, I am interested in are 

they going to eat more or less, does that affect their diet, or is the 

overall world market going to be to the appetite of what people can 

afford, and then it is just the difference in the logistics of what the 

basis is between shipping rice to Cuba and selling it to an alternative market somewhere, say, for example, Vietnam? 

Mr. GIBSON. Competition will always lower prices. 

Mr. KING. Yes. 

Mr. GIBSON. So when people have more money, they eat more. 

Mr. KING. Okay. Well, slightly more. I don’t think you have any 

numbers on that. And so I would just take it to this point that, in 

the business I am in, we want to see more construction projects out 

there because we have a bigger market to bid into. And this is a 

tiny, little margin. It is 11 million people on a little island, out of 

seven billion people on the planet. So we could divide 11 million 

38

by seven billion and come up with a percentage of appetites that 

would be potentially affected by this. I am just putting that into 

a perspective because we have a very narrow vision on this, and 

I am, like a number of people in this room, I have made my trip 

to Cuba and I ended up spending nearly a week with an individual, 

I had better not identify him because he would be busted by the 

Castro Administration. I paid him cash to travel with me around 

from early in the morning until late at night, and I learned a lot. 

I learned a lot that you don’t learn when you are following Castro’s 

minders around Cuba. And some of these things, milestones about 

the history that we ought to be thinking about in this 50+ year 

saga of trying to free the Cuban people, back when we believed in 

promoting freedom around the world, and we will again. First place 

is, the Soviet Union propped Cuba up, and Cuba was a sugar-promoting island at the time. The world market on sugar then was 6¢

a pound, and the Soviet Union traded them 51¢ of oil for 6¢ of 

sugar. That is how they propped that regime up through all of that 

time, until the Soviet Union collapsed economically, and then Venezuela picked up the slack. 

Oh, by the way, those Russian tractors are probably still sitting 

down there rusting, and they have been parked for parts, and now 

we have the only civilized country in the world that I know of that 

went from a mechanized agriculture to animal husbandry, went 

backwards instead of forwards. Now there is a billion feet of rope 

in Cuba to tie down their animals that they use to farm with. But 

Venezuela filled that hole. And when Venezuela goes under, then 

the President of the United States decided I am going to open up 

negotiations or relations with Cuba, and now we are in the business of negotiating here on how we might open up trade with Cuba 

to try to help their economy out and help the Cuban people. And 

I heard Ms. Lowe say that we wanted to keep the money out of the 

hands of the Castro regime. And I hear Mr. Claver-Carone say, 

‘‘Well, every trade agreement for the last 50 years has been exactly 

with the Castro regime.’’ And so it looks to me that the President 

of the United States is interested in bridging this Administration 

over, and giving help to the transition from the Castro Administration to the successor, which we have talked about. And this whole 

policy has been about the biological solution in Cuba that has to 

come one day, and it more imminent every single day, and that is 

Castro has lived a lot longer than we anticipated that he would. 

And I don’t know that this Administration has a plan to transition 

and promote freedom in Cuba. I suspect they don’t because it looks 

like to me that they have a plan to prop up the Marxist regime. 

And I don’t want to curse the 11 million Cuban people to the next 

50 years of living under a Marxist regime. 

And then the money laundering that goes on in Cuba. It was 21 

pesos to the U.S. dollar when I was there. It is 23.14 pesos now. 

Cubans can earn American dollars. They can hold them, but they 

can’t spend them. They have to go to a Cuban bank where they get 

$1 for every 23.14 pesos. And so they get 1 peso for every dollar. 

And Castro picks up 22 pesos out of that. He gets the vigorish.

That props up the Cuban Administration. 

Castro runs the hotels. American dollars go into the pockets of 

the Castro regime. 

39

This big picture part of this thing has not been addressed in this 

hearing in an adequate way. And I recognize the testimony of Mr. 

Claver-Carone, and I think that we have much more we need to 

discuss before we move forward with something that would facilitate a Marxist regime in Cuba. 

Thank you. I yield back. 

The CHAIRMAN. The gentleman’s time has expired. Mr. Costa, 5 

minutes. 

Mr. COSTA. Thank you, Mr. Chairman. 

Well, we all have some ideas about the nature of the Castro regime. It has been a Marxist dictatorship since, really its inception, 

and it is obviously in all ways that we view human rights and freedoms that we cherish in this country, the Cuban Government’s behavior toward its people has been the antithesis of what we believe 

in our country. Let’s be clear about that. What we are witnessing 

is a transition. The Castro regime, I don’t believe, is going to be 

in place indefinitely, and no one, I don’t think, at this point can 

predict what will occur after the brother is no longer able to maintain the fac ̧ade of his predecessor. 

And I guess, Mr. Claver-Carone, to your points, while some of 

your issues that you raised are valid, I don’t think it anticipates 

that continuing to do what we have always done over the last 50 

years is somehow going to create change that we would like to see 

occur. 

Dr. Ribera, what I didn’t hear from you, and I would like to get 

your sense of, is if those of us who are looking at the long-term 

game, and, Ms. Lowe, you may want to comment as well, these 

steps to begin to open discussions and formal relations is a first 

step. Obviously, based upon conditions and reactions, and we are 

really talking about the next Administration. I mean this Administration has done what they have done, for better or worse, whether 

you agree or disagree, and it is going to be up to the next Administration to determine what kind of relationship they want to set up, 

under what sort of conditions as we go forward between ourselves 

and Cuba. 

Dr. Ribera, what do you see is the long-term game here, as well 

as Ms. Lowe? I too was one of those who have visited Cuba. From 

a California agricultural perspective, there are a lot of opportunities there, providing you have the right set of circumstances. And 

please give me your sense, Dr. Ribera. 

Dr. RIBERA. Well, as I mentioned in my statement, more trade 

creates jobs. And for the U.S., it is basically an opportunity——

Mr. COSTA. No, we get that part, but I am talking about what 

is your sense of the transition or the changes when the current 

President Castro no longer is in power, how do you think that is 

going to change? 

Dr. RIBERA. Well, and again, this is talking to couple of people 

in the Maleco ́n area, and they believe that they are still going to 

be a communist country. We also had some faculty from Havana——

Mr. COSTA. Right, and we have a communist country in China 

that we do a great deal of trade with. They call it socialistic capitalism. 

Dr. RIBERA. Right. 

40

Mr. COSTA. Deng Xiaoping, when they were converting to socialist capitalism said, ‘‘It doesn’t matter whether a cat is white or 

black, as long as it catches mice.’’ And they needed to change, and 

they did. And now everybody trades with China. And there are 

challenges there too. 

Ms. Lowe, do you have any insight perspective? 

Ms. LOWE. I want to make sure I understand the specific question. You mean on the regime change——

Mr. COSTA. Yes. 

Ms. LOWE. Oh, apologies. On the regime change? 

Mr. COSTA. Well, on what we ought to be thinking in terms of 

trade in the longer-term. 

Ms. LOWE. Well, in the longer-term, I agree with the comment 

you made just a few moments ago, this is a really important first 

step in what is probably going to be a fairly long process. But, is 

a very important first step. 

Mr. COSTA. I think 5, 10 years is what we are talking about. 

Ms. LOWE. Yes. I wouldn’t even begin to guess how many years. 

But at the end of the day, for the good of the American farmer, the 

American ag economy, in the long-term, we want to create as many 

opportunities as we can in every market, including one that is so 

strategically close to the U.S., and frankly, needs to import a vast 

majority of their food products. 

Mr. COSTA. No, they have lots of problems. 

Ms. LOWE. So that equation is good. As I mentioned, there is 

going to be a lot more work that has to be done. I mean, candidly, 

as far as a credit risk, I am very skeptical about Cuba as a credit 

risk today. Right? There is not any transparency, there is not good 

quality financial information that is credit, verifiable, et cetera. So 

a lot of things need to happen. The creation of a non-governmentowned import entity is very important. 

Mr. COSTA. Mr. Claver-Carone, your criticism, and I saw some of 

the European investments, Canadian investments, and others, in 

Cuba when I was there, are those governments propping up those 

investments, those foreign countries that have invested? 

Mr. CLAVER-CARONE. Absolutely. Everyone has their dual strategic interests and dual political interests, European Union sanctions, Belarus and Zimbabwe, and other countries that we have different types of interest in regards, and that matter. But the important question you pose which is pivotal here is what is happening 

in Cuba right now, which is essentially a nepotistic transition. Essentially 80 percent of the economy right now is being put in the 

hands of the Cuban military, led by Rau ́l Castro’s son-in-law, Luis 

Alberto Rodrı ́guez Lo ́pez-Callejas. Rau ́l Castro’s son is now heading 

up the Interior Ministry and all the intelligence and repressive apparatus. His grandson is heading up the Personal Security Service 

with his own personal kind of Secret Police, per se. So we are now 

seeing all of this happen under our nose, and if we give away the 

United States, everything that is in trust for the future or Cuba, 

for future Cuba’s democrats and others, we are essentially handing 

it to this mafia and this next generation. 

Mr. COSTA. You are making it sound like Cuba’s version of the 

mafia or the Seminoles. 

41

Mr. CLAVER-CARONE. It is. It is the Vivabelli family, the Castro 

family. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. COSTA. Thank you. 

The CHAIRMAN. Mr. Thompson, 5 minutes. 

Mr. THOMPSON. Thank you, Mr. Chairman. 

Ms. Lowe, the U.S. farm economy is facing very low commodity 

prices, and in these situations we need to take advantage of every 

opportunity. Can you expand on the possibilities of increased trade 

with Cuba, and what exactly it can bring to the rural economy? 

Ms. LOWE. Well, in the very short-term, the impact of this bill 

passing would be somewhat limited. But the important thing, 

again, is to take that first step to create a level playing field. It is 

very, very clear as everybody appears to agree that the sales that 

are occurring are oftentimes with the support, in this case, of foreign government support. For example, the example of Korea providing export credits for the import of Korean products. In the 

short-run, I agree that there won’t be a very significant change because many other things need to happen, particularly in terms of 

the creditworthiness of the importing entities in Cuba. But absent 

this next step, followed by other steps, we have to continue to keep 

the ball moving so that over the period of time we will create a 

level playing field for the U.S., and we will be able to compete. 

I also believe that once the possibility of financing and the market becomes a bit more open, that will be further impetus, and 

other countries will push in this direction as well for the Cuban 

Government, Cuban banks to be able to produce the type of financial information that they are going to need to be able to produce, 

to more fully integrate into the world economy, including the financing of their products. 

So other governments that are supporting them now, they have 

made their risk cost-benefit decisions, but they are going to require 

repayment of those obligations, Cuba is going to have to continue 

to demonstrate they can meet their obligations, those current obligations and the refinanced historical obligations. And over time, 

they will be able to take the steps that they will need, over years, 

I believe, to really be able to be a full partner in a level playing 

field of global trade. 

Mr. THOMPSON. I want to follow up specifically, obviously, our 

number one industry in Pennsylvania is agriculture, and our largest commodity is dairy. And right now, our dairy prices are around 

$14 per hundredweight; well under what it is costing to produce 

the milk. And it seems, as I have looked at this, I mean trade is 

a key issue with this. Specifically, in Pennsylvania, and nationwide, but I will just speak to Pennsylvania, our dairy exports are 

down 65 percent. Interesting enough, it is due largely, as I can 

trace it, to Russia. Not that we trade dairy with Russia, but Russia 

has put an embargo on European Union milk, and, therefore, 

where we would export our dairy products, the European Union is 

kind of, out of necessity, is flooding those areas, shutting our milk 

and our farmers’ commodity out. 

And Dr. Ribera had testified that recently a large amount of 

Cuba’s cropland was taken out of permanent crop production and 

placed in native or improved pasture, I suspect in an attempt to 

42

increase milk production, which has declined about ten percent 

since 2003. What role or opportunities do you see the United States 

dairy farmers playing in Cuba’s market? Anyone who would like to 

take that question, would be great. Go ahead, Dr. Ribera. 

Dr. RIBERA. Well, again, we used to send a lot of dairy products 

to Cuba back in 2008, 2009. Now we don’t send anything. The main 

products that we send to them right now is leg quarters, chicken. 

We send a little bit of soybean and soybean meal, and corn. That 

is about it. There is this opportunity there because they basically 

consume 1.75 to 2.1 times more of the grains, meat, and dairy 

products that they actually produce. So it is a big opportunity. 

You mentioned low prices, low commodity prices. When you look 

at the percentage of the farm income that comes from exports to 

overseas has increased from 28 percent in 1996 to over 35 percent 

in this year, or 2015. So we depend a lot on trade to survive, for 

us a percentage of the farm income. 

Mr. THOMPSON. Yes. It was remarkable to me that one country 

that we don’t directly trade that commodity with, can have such an 

influence over where we are today with the runaway prices on 

dairy. 

So thanks to the panel. Mr. Chairman, I yield back. 

The CHAIRMAN. The gentleman yields back. 

Mr. McGovern, 5 minutes. 

Mr. MCGOVERN. Well, thank you. And I want to thank the panel. 

I want to thank the Chairman for having this hearing. I want to 

thank my colleague, Congressman Crawford, for his bill. I support 

it, and I hope that this hearing will result in quick action by this 

Committee to markup H.R. 3687 and have it enacted before the 

end of the 114th Congress. 

I strongly support normal trade relations with all countries, unless there are internationally recognized and approved sanctions 

against them. And in the case of Cuba, the United States is the 

only nation in the world to maintain trade sanctions, indeed, a 

trade embargo, against that country. I believe we should lift the 

travel sanctions we imposed on our own citizens, and I believe we 

should end our unilateral trade embargo. And so I see ending restrictions on U.S. agricultural trade as a step in the right direction. 

And it is certainly an area of policy where there is broad bipartisan 

consensus that ending these restrictions on U.S. agricultural goods 

and allowing our farmers to trade with Cuba on normal terms will 

be good for our farmers, and good for the Cuban people. 

I have been to Cuba many times. My first visit was in 1979. And 

I was there when the President went down to announce the change 

in our policy. Things have changed. Not as fast as we would like 

them to change, but there are indications that things are changing 

in a way that, in 1979, the Castro regime would have been strongly 

against. And they are changing not because of anything we are 

doing, they are changing because the whole world is down there. 

The whole world is able to trade and to travel there, but we are 

not. And I am a believer that American farmers, the American people, American businesses can do more to open up political space in 

Cuba than all the saber-rattling and tough talking speeches that 

come out of the United States Congress. 

43

As my colleagues on this Committee know, I am very interested 

in issues related to strengthening food security here in the United 

States and globally. And U.S. exports of rice and dairy to Cuba 

don’t just support the State or the tourism sector, they also go to 

the warehouses and supermarkets that supply Cuban citizens. Our 

soybean oil and meal feed the livestock in Cuba and feed the people. 

So I would like to ask Mr. Isbell and Mr. Gibson, if you could 

expand a little bit more on how you view U.S. agricultural sales to 

Cuba, helping not just U.S. producers, but Cuban citizens and consumers. 

Mr. ISBELL. The important thing about trade is that it can benefit both sides of the equation. And as many have mentioned here 

today, it is incredibly important that we continue to try to find 

ways to better the lot of the average Cuban citizen. And the way 

we can start is by extending freedoms back to our own people here 

in the United States and set an example for the Cuban Administration to do the same to theirs. 

Our goal is not just to trade rice and to make money, it is to benefit the average Cuban citizen. With USA Rice, we have technical 

exchanges that are in the works, and certain things like that. And 

over time, we can build bridges between individuals that greatly 

benefit not just the rice farmers in the industry through the United 

States, but the average Cuban citizen over there. And that is our 

goal. 

Mr. MCGOVERN. Mr. Gibson. 

Mr. GIBSON. Thank you. I agree with Mr. Isbell. One thing to 

add is, human nature is to get along better with people you trade 

with. I have been in the trade industry for 20 years, and I go to 

people that I trade with every day when problems arise or when 

we need to discuss things. And having any relationship with Cuba 

from an agricultural standpoint might just open up some dialogue 

to help the Cuban citizen. 

Mr. MCGOVERN. Right. 

Mr. GIBSON. When we look at the U.S. rice farmer, I have plenty 

of farmers in Mr. Isbell’s area that would love to sell me more rice, 

but I don’t have a place to go with it at the moment. So any trade 

we can open up, when it comes to U.S. rice, wheat, corn, beans, 

just opens up more markets for our U.S. farmers so that we can 

supply the rest of the world. We are going to have 2.3 billion bushels of corn left over after this harvest that has nowhere to go. 

Mr. MCGOVERN. Right. Well, I appreciate it. All this emphasis is 

focused on how this benefits the Cuban Government, but when you 

go to Cuba and you talk to regular people, they see the benefit to 

themselves. 

And look, the one thing we all should be able to agree on is what 

we have been doing for close to 6 decades has been a miserable failure by every measure. It has not served our interests, it has not 

helped the Cuban people, and when something is not working, especially after almost 6 decades, maybe it is time to reassess. And 

I, again, hope that we can move quickly on Mr. Crawford’s bill. 

With that, I yield back my time. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. Austin Scott, 5 minutes. 

44

Mr. AUSTIN SCOTT of Georgia. Thank you, Mr. Chairman. I have 

spent a lot of time over the last year or so speaking with the people 

from Cuba, and the one story that sticks in my mind is a gentleman that I spoke with a few months ago who said that when he 

was a child, they would tell the kids to put their head on their desk 

and to pray to God for candy. And they would lift their head up 

and there would be no candy on the desk. And they would tell them 

to put their head down on the desk and pray to Castro for candy. 

And they would lift their head up and there would be candy on the 

desk. 

And so then the indoctrination of the Castro regime has gone on 

down there for a long, long time, but those same types of indoctrinations have gone on around the world. There are a lot of oppressive people out there. A lot of oppressive leaders or people who 

happen to be in leadership positions, I should say, around the 

world. 

My question, and maybe this would be for you on the end, what 

is the state of the church in Cuba? Are people allowed to worship? 

Mr. CLAVER-CARONE. Well, Congressman, that is a great question because we have now heard multiple times this whole question 

about, if we have the policy that we have had over 50 years, and 

it goes to that. I am all for change, but not change for the worse. 

Mr. AUSTIN SCOTT of Georgia. But, answer my question, what is 

the status of the church? Are people in Cuba allowed to worship, 

or is that regime so oppressive that they will not allow it? 

Mr. CLAVER-CARONE. They are only allowed to worship in Statesanctioned churches. And since December 17, 2014, religious persecution in Cuba has gone up tenfold, according to Christian Solidarity Worldwide. So it is getting worse since the new policy. 

Mr. AUSTIN SCOTT of Georgia. Okay. So we don’t have travel 

bans to countries that are even more oppressive than that. 

Mr. CLAVER-CARONE. But we don’t have other countries or a 

tourism industry that is owned by the Cuban military and intelligence services. 

Mr. AUSTIN SCOTT of Georgia. There are other countries though 

where the countries that are so oppressive and those governments 

do own those industries. 

I mean it is not the Castros, but it is others who are similarly 

oppressive as the Castros. 

Mr. CLAVER-CARONE. If your number one source of income is 

tourism, like the number one source of income for Iran is oil, we 

are going to sanction tourism to Cuba and oil to Iran. It is logical. 

Mr. AUSTIN SCOTT of Georgia. But, there is no travel ban to Iran. 

Mr. CLAVER-CARONE. Because tourism is not a source of income 

for the Iranian regime. 

Mr. AUSTIN SCOTT of Georgia. But, there is no travel ban in Iran, 

and, quite honestly, they are a much greater threat to American 

citizens than Cuba. 

Mr. CLAVER-CARONE. Because the Iranian regime does not market tourism as their number one source of income. 

Mr. AUSTIN SCOTT of Georgia. But there isn’t a travel ban to 

Iran, and they are a much greater threat to the U.S. than, I mean 

Cuba is 90 miles from Miami. My wife is from Miami. 

Mr. CLAVER-CARONE. Yes. 

45

Mr. AUSTIN SCOTT of Georgia. If we are not there, shouldn’t we 

expect other countries to be there that may not be our friends? 

Mr. CLAVER-CARONE. Congressman, there is a seminary in the 

Florida Straits of hundreds of thousands, if not nearly a million, 

Cubans that were trying to flee to one country, the United States. 

We are their beacon of freedom. If we start acting like Canadians, 

Europe, and French, and everybody else, going on vacation in these 

Cuban military resorts and embracing this regime, we are going to 

lose being that beacon of hope to the United States. 

Mr. AUSTIN SCOTT of Georgia. I am not talking about embracing 

a regime. 

Mr. CLAVER-CARONE. Well, that is what it is. 

Mr. AUSTIN SCOTT of Georgia. You are not answering the questions though. 

Mr. CLAVER-CARONE. That is the reality. 

I am, sir. 

Mr. AUSTIN SCOTT of Georgia. No, you are not, not with facts. I 

mean this is an emotional argument. I feel for the people of Cuba. 

And I don’t understand how having a travel ban, keeping good people from going to that country, is helping the people of Cuba. 

Mr. CLAVER-CARONE. We don’t have a travel ban, sir. 

Mr. AUSTIN SCOTT of Georgia. And so——

Mr. CLAVER-CARONE. People are going to Cuba. What they are 

not allowed to do——

Mr. AUSTIN SCOTT of Georgia. But no, let me——

Mr. CLAVER-CARONE.—is tourism transactions——

Mr. AUSTIN SCOTT of Georgia. Let me finish please. 

Mr. CLAVER-CARONE.—to the military-owned hotels and resorts. 

Mr. AUSTIN SCOTT of Georgia. Reclaiming my time. I want to ask 

you another question. I apologize. There has to be a way to tie 

human rights and the improvement of the human rights conditions 

and countries to expanding trade opportunities for those countries. 

And with that, Mr. Chairman, I would just like to say that whatever we do, going forward, we need to keep in mind the people of 

Cuba. I am not interested in helping the Castros, but not trading 

with Cuba is not helping the people of that country. 

With that, I yield back. 

The CHAIRMAN. The gentleman yields back. 

Mrs. Bustos, 5 minutes. 

Mrs. BUSTOS. Thank you, Chairman Conaway. And thanks for 

hosting this hearing today, along with the Ranking Member, Mr. 

Peterson. It is an important conversation that we are having, and 

it is very important to farmers from my state, which is Illinois, and 

farmers all over our country. And thank you to the witnesses for 

taking your time to spend with us today. 

In the last year, I have been to Cuba twice. One of those times 

was with my colleague, Congressman Davis, also of Illinois. The entire purpose of that was to talk about agricultural possibilities for 

the State of Illinois. Second time was with the President. And it 

was an honor to be able to go there and advocate on behalf of our 

family farmers. 

I too am a proponent of Congressman Crawford’s resolution, and 

I am a strong supporter of it. And with that said, actually, my first 

question is to find out a little background that would help me. Dr. 

46

Ribera, from Texas A&M, you talk about the possibilities of ag 

trade from the United States being somewhere around $1.2 billion 

or $2 billion. And you have assigned ten percent of that to the 

State of Illinois, that those are the ag trading possibilities. I just 

want to know a little background on how you have come up with 

that number so I can explain it when I am talking with our farmers back in Illinois about that. 

Dr. RIBERA. Sure. Basically, what we did is that, looking at the 

states that produce the main commodities, and also looking at the 

percentage of what is exported, and that is basically the percentage 

that was assigned to Illinois because, I believe it would be corn, a 

big commodity there in Cuba, they require a lot of corn. They are 

buying right now from Brazil, but we can sell them a lot of corn 

as well. 

Mrs. BUSTOS. Yes, we do a pretty good job in Illinois on corn and 

beans. 

Dr. RIBERA. Yes, ma’am. 

Mrs. BUSTOS. Okay, my second question is, I would like each of 

you to address this if you could, when Secretary Vilsack also was 

on the trip with the President, and there was a Memorandum of 

Understanding that was signed. Obviously, you have each addressed some challenges, we have heard about some challenges 

here from our fellow Members of Congress, but wondering in light 

of that Memorandum of Understanding, what has happened since 

then, what do you see as the possibilities for that? Maybe we can 

start with Mr. Isbell and go down the line, and if each of you can 

give us your thoughts on that please. 

Mr. ISBELL. More specifically, the change since—could you repeat 

the last part of your question? 

Mrs. BUSTOS. I am wondering what you see as the possibilities, 

with the Memorandum of Understanding that has been signed with 

the U.S. Department of Agriculture and Cuba, if we have seen any 

results of that, what you see is ahead for the possibilities because 

of that Memorandum of Understanding. 

Mr. ISBELL. If I remember correctly, the Memorandum of Understanding created some exchanges on environmental aspects as well, 

and I think that is one place that agriculture can engage with 

Cuba and create some new relationships through that. 

Other than that, it just lays the groundwork to continue the 

work that we have been trying to do to open that next door and 

take the next step. Yes. 

Mr. GIBSON. As far as the Memorandum itself, I am not familiar 

that it truly created a whole lot. We appreciate the Memorandum, 

but really until we solve the financing issue, we just can’t go anywhere. 

Ms. LOWE. I honestly have nothing to add to what Mr. Gibson 

and Mr. Isbell have said. I agree with that. It is an indication of 

interest and intention, but we need to take some concrete steps to 

move the needle. 

Dr. RIBERA. I would say the same thing as well. One other thing 

that it could help also is just to start looking at inspection agencies 

like APHIS, for example, and try to have the same regulations on 

both sides to try to harmonize what we export and what we import 

47

from them as well. But the financing is the main issue. That is 

what ALIMPORT tells us. 

Mr. CLAVER-CARONE. As I mentioned in my testimony, since December 17, 2014, ag sales have plummeted last year, and they are 

further plummeting this year, than the time when we had the 

strongest sanctions in 2008. What that tells you is, essentially, the 

more of these hearings and conversations, and the more they think 

they can get from the U.S. Congress for us to pay for our own ag 

sales, the less they are going to buy. They are trying to squeeze the 

U.S. Congress, frankly. 

Mrs. BUSTOS. Thank you. And, Mr. Chairman, my time is up and 

I will yield back. Thank you. 

The CHAIRMAN. The gentlelady yields back. Mr. Crawford, 5 minutes. 

Mr. CRAWFORD. Thank you, Mr. Chairman. I appreciate you and 

the Ranking Member for holding this important hearing. 

I want to put a little perspective on here. I don’t think we are 

acting like Canada, I don’t think we are acting like France, we 

need to be acting like the United States. Let me give you an historic perspective here: 1985, that was the year I joined the Army. 

U.S. trade to the Soviet Union was around $2.1 billion. The height 

of the Cold War. The Soviet Union was actively engaged with the 

Afghans. I served in that theater later in my tenure in the United 

States Army. So somehow we managed to find a trade relationship 

with the Soviet Union; a very hostile regime, a very oppressive regime. I am not going to give you any further background on that. 

Vietnam, 2001 Bilateral Trade Agreement, established permanent normal trade relations with Vietnam. Ten-Year Hot War with 

Vietnam; a very oppressive regime. Don’t have to give you all the 

background there. We have seen an increase of 1,200 percent in 

trade in Vietnam. 

So I am not asking us to act like Canada, I am asking us to act 

like the United States of America. 

It is reasonable to think that we should provide opportunity for 

farmers. When I talk to farmers in my district they say, ‘‘You know 

what, we can get by without all the policy things that you are 

messing up in Washington if we can do a handful of things. First, 

get the EPA off our backs.’’ I think we can all agree on that. ‘‘Second, open up market opportunities for U.S. producers. And third, 

we are seeing the evidence of yesterday with the WTO being taken 

to task over China corn, grain manipulations.’’

My point is, my goodness, we have to look at this thing over and 

over again through the lens of the Cold War that has been over for 

20 years. I understand your concerns. This bill was written specifically to address the concerns and the sensibilities of the Cuban 

expat community in south Florida, very specifically, because we 

have a very sensitive understanding of how, as we have seen here, 

a very emotional issue, but my goodness, can we look at this in a 

different context? 

Mr. Isbell, if you would, give me a little bit of perspective here. 

I know you mentioned 135,000 tons, we have done the math here 

and I gave the Chairman a bad figure earlier, but it has been refined, that represents anywhere between three to five percent of 

total U.S. production. Is that right? 

48

Mr. ISBELL. That sounds correct. 

Mr. CRAWFORD. And you see some long-term potential there. My 

point is, I am concerned that if we are not actively engaged in 

Cuba at this point, that there is a void of American leadership. 

This is what we say all the time. This is what is going on with 

trade agreements and world affairs. We have seen a void of U.S. 

leadership, and when we don’t lead, bad things happen. And I just 

think it is time that we revisited this in a more productive light. 

I know that these are not good people that are calling the shots in 

Cuba. I know that. Neither were the Vietnamese when we fought 

them for 10 years. Neither were the Soviets when we had the Cold 

War for 40+ years. For that matter, neither is China who is grossly 

manipulating their currency, and who oppresses religious minorities, and who squelches free speech, and yet we have billions, if not 

trillions of dollars in economic investment in China. So are we to 

retool those relationships? Are we going to scale back our investment in China? Are we going to quit doing business with our 

friends in Saudi Arabia, who beheaded more prisoners last year 

than ISIS? I mean come on. It is not that difficult for us to look 

at this in a different light, understanding that 55 years hence, 

nothing positive has been yielded by the current posture. 

So I understand there is risk. We don’t want to put taxpayers at 

risk. The bill is written so that taxpayers are not at risk. A privatesector entity can engage in these transactions at their own risk. 

And that is the chance you take in the marketplace. We do that 

today, every day. Heck, as a former radio farm network owner, I 

had slow payers, some that would take 6 months. I am talking 

about some big, big clients, take 6 months to pay me. That is the 

chance I take in the business world. Do I want to do business with 

them again? I don’t know. I would have to rethink that. That is my 

decision to make. We are not putting the taxpayer on the hook with 

this. 

And I didn’t intent to go down this trail. I really wanted to get 

some information from Mr. Gibson about recognizing that there is 

a lot of international investment, for example, in the Port of 

Mariel, and how that plays into this whole ag goods. 

I am running out of time, but my point is we have a lot of data 

here that we can be talking about, and it comes down to this, we 

are continuing to look at this issue over and over again through the 

lens of 55 years worth of failed policy that has yielded no positive 

benefit for anybody here or in Cuba. 

And with that, I yield back. 

The CHAIRMAN. The gentleman’s time has expired. Ms. Graham, 

5 minutes. 

Ms. GRAHAM. Thank you, Mr. Chairman. I was born in Miami in 

1963, you all can do the math, so I have lived with this issue my 

whole life of our relationship with Cuba, 90 miles from where I 

grew up. And I listened to a lot of the conversation here today, and 

have agreed with a lot of it and disagreed with some of it. We 

started this hearing with the Chairman speaking about leverage, 

and I have made a whole lot of notes on my page here as we have 

gone through this discussion. And it does come down to that. I do 

think we need to incrementally start opening up our relationship 

with Cuba. And I say incrementally because we do want to hold 

49

this oppressive regime accountable for its human rights violations. 

And I don’t want, down the road, when the Castro brothers are no 

longer in power, I was concerned when I heard Mr. Peterson’s comments about the Vice President coming into power and being equally as totalitarian. We can all agree that we don’t want a void to 

be in Cuba that could potentially be filled by worse actors across 

the world. So I have been supportive of Mr. Crawford’s bill because 

we do need to be taking incremental steps, but I think at the end 

of the day, and I didn’t mean to go on about this either, but as a 

Floridian, this is personal for me, what we want is to help the 

Cuban people at the end of the day, many of whom have families 

in south Florida, and all over Florida. 

So what can we do? And I guess my question is for Mr. ClaverCarone, am I saying that correctly? 

Mr. CLAVER-CARONE. Yes, ma’am. 

Ms. GRAHAM. Was it close enough? 

Mr. CLAVER-CARONE. Yes, ma’am. 

Ms. GRAHAM. I do think we made a mistake in being overbroad 

in easing restrictions to Cuba, because we have lost our ability to 

have some leverage, but what do we do? As we lift restrictions, 

what steps can we take, and this could be one of them, to have 

enough leverage that the Castros will feel inclined to have some of 

the benefit of trade trickle down to the citizens of Cuba, the people 

we want to help, right? 

Mr. CLAVER-CARONE. Yes. 

Ms. GRAHAM. I mean I don’t know if you have any suggestions, 

any ideas——

Mr. CLAVER-CARONE. Congresswoman, I agree with you wholeheartedly in regards that our goal should be to help the Cuban people, and in that, I would say if this bill essentially said we want 

to authorize private financing for agricultural sales to privately 

owned and operated companies and entities in Cuba, I would be its 

biggest cheerleader right here, but that is not what we are discussing. We are talking about providing private financing to one 

company owned by the Castro regime that is going to hold food 

hostage over a people. So we are increasing what essentially is 

their control over the Cuban people. That is my concern, and thus, 

the safeguards that we want to be able to lay through. 

Ms. GRAHAM. So back to my question, because I can tell you, I 

Googled you. You know a lot about this issue. 

Mr. CLAVER-CARONE. Hopefully, only good stuff. 

Ms. GRAHAM. Is that the verb, right, to Google? No? To Google? 

The CHAIRMAN. I don’t know, is it painful when you get Googled? 

Ms. GRAHAM. We say in my office, because we are Southern, we 

say we Google it up. We Googled it up. I Googled it up. Okay, back 

to the question. What steps would you feel were appropriate to 

start, if any, to start to build a relationship with Cuba so that if, 

in fact, when the Castro brothers are gone, we are not left with 

this void that we have no relationship? See, I can see both sides 

of it. We don’t want to leave a void where we have no relationship 

with Cuba, but it has to be incremental. One thing that I would 

suggest we would do would be to allow American companies to 

work with Cuban offshore oil drilling rigs because if, God forbid, 

they don’t have the best—I know we are getting way off topic, but 

50

if they don’t have the best science and engineering for those oil 

rigs, and there is a spill, it is going to all flow south. That is how 

the water flows. But, one of the reasons I was interested in Mr. 

Crawford’s bill is because I do think we need to be taking incremental steps. And I don’t know what the answer is. As a Floridian, 

as someone who was born and raised in south Florida and understands the passion of these issues, I don’t know. So maybe you and 

I could have a conversation at a later time and talk more in-depth, 

because I am way off topic. 

And I yield back. I am out of time. 

The CHAIRMAN. The gentlelady’s time has expired. 

Ms. GRAHAM. Thank you. 

The CHAIRMAN. Mr. Benishek, 5 minutes. 

Mr. BENISHEK. Thank you, Mr. Chairman. Boy, this has been 

really interesting for me, and I, frankly, don’t understand many of 

the issues. Are we the only country that doesn’t trade with Cuba, 

Mr. Claver-Carone? 

Mr. CLAVER-CARONE. We do trade with Cuba. We sell them agricultural products, and we have exemptions——

Mr. BENISHEK. But like the embargo, what I don’t understand is 

why, if we open the trade up, since the rest of the world trades 

with Cuba, why hasn’t that opened up the regime? That doesn’t 

work, so why adding us on there, how does that open up the regime 

more than the rest of the world already having a trading relationship, but already having difficulties in getting paid, if we do that, 

how is that going to make it different than the rest of the world 

failing, and their economy still being a failure? 

Mr. CLAVER-CARONE. Well, I always argue the fact that all of the 

countries that do business with Cuba and have not promoted any 

type of positive change, in that regards, when people say the U.S. 

has a failed policy, ‘‘I say, well, why do we want to follow the failed 

policy of even more countries?’’ At the end of the day, whether we 

agree with U.S. policy towards Cuba or not, it is a principled policy 

which conditions about certain fundamental rights and security 

concerns. I mean and Congressman Scott had mentioned that the 

whole Iran versus Cuba, Iranian President Rouhani is going to 

Cuba, this week, to meet with the Castros. They are not going to 

discuss anything that promotes U.S. interests. This is 90 miles 

from our shores. So there are other concerns. 

Mr. BENISHEK. Oh, I agree that there is a very, very bad security 

risk for America to have them there. But another thing that you 

mentioned in your testimony was that trading with—there was testimony—you have heard testimony here how that trading with 

Cuba would benefit U.S. farmers, but it seemed to me that you 

didn’t feel that was true. So can you explain that position? 

Mr. CLAVER-CARONE. My argument, what I was saying is when 

we have had the previous hearings, and as the Ranking Member 

was discussing when they previously discussed this issue, the 

whole argument, now it is about financing. It used to be about the 

definition about cash-in-advance. And in 2000, it was just about 

authorizing, in 2000, the argument was if we authorize agricultural 

sales to Cuba, that was going to fundamentally change Cuba because we are going to have all these interactions, et cetera, et 

cetera. It hasn’t done so. To the contrary, it has made the funnel 

51

even narrower. And what I want to do is broaden the funnel so 

that Cuban people will be able to partake in——

Mr. BENISHEK. And can you tell me more about why you think 

that the exports have gone—or the trade has gone down, and how 

you think that—you mentioned squeezing Americans, can you talk 

a little bit more about that because I am——

Mr. CLAVER-CARONE. Because, essentially, what the Cuban regime wants is the same as it has gotten from Brazil, Vietnam, and 

others, it essentially wants us to pay for it, it wants our taxpayers 

to guarantee it, and then, essentially, it wants to just control it. 

And it wants, also non-related to the issue today, it wants U.S. 

tourism. Tourism is its number one source of income. So you will 

note that when—and a lot of you that are in ag—that go down with 

farm delegations, what the Cuban regime always argues is that we 

need more American tourists to come down, so they spend more 

money so then we can buy more products from you. That is unrelated, per se, but that is essentially how they are trying to, go 

around and squeeze Congress on issues that are non-ag related. 

Mr. BENISHEK. Right. Let me just ask another question similar 

to what Ms. Graham mentioned, and that is there any kind of an 

incremental demand that we can make on the Cuban regime to free 

things up to, a tit-for-tat, if you do this, we can do this? What is 

the way forward, could you give me a concrete idea of what to do, 

other than I don’t see an idea. 

Mr. CLAVER-CARONE. I just laid one before you with the Congresswoman’s question. If you were to simply craft a bill to say we 

will allow private financing with Cuba with private companies operated by private entrepreneurs in Cuba, like we do with every 

other country in the Western Hemisphere, frankly. That is how it 

works in every other country of the Western Hemisphere. We don’t 

do it through a State entity in that regards. So if we do that, that 

seems to me like a positive step to press the regime to say, ‘‘Hey, 

you are not going to be able to control everything that comes from 

the United States.’’ And, I would arguably say that that would be 

an interesting move. 

Mr. BENISHEK. In the short time I have left, can you tell me 

more about the American assets that have been confiscated by the 

Cubans, and now are going to be using those assets to——

Mr. CLAVER-CARONE. Congressman, I know the owners, the 

American owners, they were American in 1959, of the Port of Havana, of the Port of Santiago, where a lot of these agricultural exports that go to Cuba go through and are transported through. 

Those were stolen without compensation. So we have to recognize 

that every ag sale that is made to Cuba, even under these terms, 

is essentially trafficking on another American’s stolen property. 

That issue should be addressed because that is, frankly, unfair to 

the American victims that were, I want to say it kindly, that were 

screwed over. 

Mr. BENISHEK. I am out of time. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. BENISHEK. Thank you. 

The CHAIRMAN. David Scott, for 5 minutes. 

Mr. DAVID SCOTT of Georgia. Thank you, Mr. Chairman. I like 

to look at this as an economic issue because, fundamentally, that 

52

is what this is, economic interests and what is in the best economic 

interests of our American agriculture system. With Cuba, having a 

population of 12 million people that imports 80 percent of its food, 

only 100 miles from Florida, giving Cuba convenient access to the 

United States and our incredible array of agricultural food and 

products, having the world’s largest, most significant agriculture 

economy, it is very imperative that we look into any and all possibilities of opening up increased trade with Cuba. It just makes 

good business sense to do this. I understand the regime, I understand the communist regime. And look at China. We have to look 

at this with a very jaundiced eye and say what is in the best interests of the American business? Our farmers, who are struggling. 

Now, Dr. Ribera, I believe, I read your testimony, and in your 

testimony that you said that U.S. food and agriculture exports have 

the potential to exceed more than $1.2 billion annually within 5 

years. Why would we deny that to our American businesses? 

So let me ask you, if we could change just one thing in regards 

to the restrictions placed by the United States on trade with Cuba, 

tell us what would that be, with the aim of getting the largest increase in exports to Cuba, thus, money into the pockets of the 

American farmer? 

Dr. RIBERA. The answer to that is just let our farmers compete 

for that market, with the same terms that other countries have, 

and we will do very well. That is what we believe, that we can capture about 1⁄2 of that market, which is about $1 billion, in the 

short-term. We are really competitive in producing the products 

that they need; greens, meat, and milk, we are competitive. 

Mr. DAVID SCOTT of Georgia. Yes. 

Dr. RIBERA. And if you give the opportunity to our producers to 

compete, they are going to do a good job. 

Mr. DAVID SCOTT of Georgia. I agree with you 100 percent. I 

mean for people that may not know, of course, I represent Georgia. 

In 2014, Cuba imported $147.8 million in poultry, meat, and eggs 

from the United States. But then in 2015, that number dropped to 

$77.6 million. That 45 percent drop is not good for my State of 

Georgia. We are the nation’s and the world’s leader in producing 

poultry. And Georgia produces on average per day roughly 29 million pounds of chicken, 6.3 million table eggs, and 5.5 million 

hatching eggs. We want that to have an opportunity to get into 

Cuba. We are less than 600 miles from Cuba. We have a fantastic 

Savannah port. All of the infrastructure is right there, and even 

right now, Cuba currently serves as the sixth largest poultry export 

market for Georgia’s poultry. We are exporting right now $20 million worth of chicken to Cuba each year. So I want to look at this 

as a sound economic investment for the United States, and particularly from the interests of our farmers who deserve to be able to 

get their products to the Cuban market. 

Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. Mr. LaMalfa, 

5 minutes. 

Mr. LAMALFA. Thank you, Mr. Chairman, and thank you for calling this hearing on this important and interesting topic. I also appreciate the thoughtful work that Mr. Crawford is putting in on 

this effort, and makes great points and arguments on this. 

53

As well Mr. Isbell can relate, I am one of those rice farmers too 

that made some of those trips to Washington, D.C., wondering 

when they were going to get straightened out. I hearken back to 

when there was an American ag movement, the Tractorcade came 

to D.C. a couple of times late 1970s, early 1980s, and I remember 

one of the quips by one of the farmers, ‘‘We are going to stay back 

here and fix this thing if it takes all week.’’ So I hope you have 

all week. But again, thank you for being here, and the chance to 

meet with you a little bit earlier as well. 

I had to leave home this week when we were starting rice harvest as well. It turns out about as green as Ms. Nicole’s dress 

there, so we will have to wait a few more days to cut some rice, 

but you miss that at home. 

I am just wondering, since 2009, we haven’t seen any rice imported into Cuba. And why do you think we were exporting more 

in 2009, which is during this same Administration, than now? 

Mr. ISBELL. There are a number of market forces at work that 

guide how rice trade happens at any given time, but with the credit 

restrictions, that creates another impediment that we also have to 

overcome. I will make a very simple analogy. Every now and then, 

you have to get a new tractor on the farm. And if I go to one town 

over and the dealer says, ‘‘I will sell it to you, but you have to pay 

me cash today and I am going to bring it to you next month.’’ And 

I say, ‘‘Okay, I am going to look around a little bit more.’’ And I 

go to the other town, the other direction from the farm, and I say, 

‘‘How will you sell me a tractor?’’ And he says, ‘‘I will give you 90 

days.’’ Who do you think you want to buy the tractor from? You 

being a farmer, you understand that as well. I am going to go with 

the person that can extend credit. Right now, we do not have the 

ability to extend credit because of the statutory limitations that are 

in place. 

And so with that——

Mr. LAMALFA. Well, I am going to see whoever has the 179 still 

in place at the end of the year, but that is something else. But I 

have heard some numbers on how many tons we might be putting 

in there, 135,000 tons might go in. I was looking at a Farm Press

article a little bit ago, one of the southern marketers was thinking 

maybe up to 550,000 tons. And, I guess those might be pretty optimistic numbers with the situation with Cuba economically, and 

some of the things that doesn’t make me jump right at this is some 

of the concerns about one man, one regime, everything running 

through them in Cuba. And I am not there to help prop up Castro 

either, so this is really a tough thing that I am torn on. But, how 

realistic are some of these numbers we are hearing on what kind 

of tonnage could be going in of rice, or other commodities? 

Mr. ISBELL. Right. Anecdotally, frankly, they are conservative, 

but those numbers come from an academic study that I believe has 

a lot of validity, so I have no reason to question them. But to your 

point about going through one entity, and this has been made several times in the hearing today, it is less than ideal, I admit that, 

however, I know your district sells quite a bit of rice to Japan, our 

friends over there, and all of those——

Mr. LAMALFA. And TPP is looking like it might be a skinny 

70,000 tons, which would be about six, seven guys could grow. 

54

Mr. ISBELL. Right. All of the rice that goes into Japan goes 

through a government entity. All the rice that goes into Iraq, Jordan, Saudi Arabia, goes through a single government entity. It is 

not unique in the world. That is something that takes place. They 

are in less than ideal situations, but they are ones that we work 

with, and there are ways that we can do that as we try to continue 

to influence change without taking out the opportunities for the 

American farmer. 

Mr. LAMALFA. Okay, thank you. Let me jump to Ms. Lowe real 

quick here too. I am concerned about the extending of the lines of 

credit, and the ability at the end of the day for them to actually 

pay for these products. Most of the stuff has gone cash on the barrelhead in the past, is that right? So how far are we going to be 

out there extended on credit that may come back against the taxpayer versus something—please. 

Ms. LOWE. Well, at this point, the discussion is extending——

Dr. RIBERA. Microphone. 

Ms. LOWE. Sorry. At this point, the discussion is extending credit 

from the private-sector. So each individual extender of credit, the 

person was going to have to make their business decision as to 

what terms they extend, for what period of time, et cetera. So I 

can’t comment specifically. I mean certainly, we know that there is 

a lack of transparency in terms of the financial standing of the sovereign, and the banks and the banking system, and I am sure that 

would extend to any private companies as well, if they are ultimately able to buy our products. So that would be my biggest concern is a private-sector lender to Cuba for trade finance. 

Other countries and other exporters are doing it. They are making their business decisions. I am not sure based on what information they are doing so, but as I mentioned earlier, the ability, the 

simple ability to extend financing will, over a longer period of time, 

lead those buyers to be able to produce that type of information so 

people can make good business decisions. 

Mr. LAMALFA. Thank you. 

Ms. LOWE. And if Cuba does have——

Mr. LAMALFA. I had better yield back. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. LAMALFA. I had better yield back on time, ma’am. Thank 

you. 

The CHAIRMAN. We are way over. Mrs. Walorski, 5 minutes. 

Mrs. WALORSKI. Thank you, Mr. Chairman. Mr. Gibson, I have 

a question. Again, I appreciate the whole panel’s input here. It is 

a lot of information, and it has answered a lot of my questions, but 

some of the estimates we heard for the potential of increased trade 

with Cuba are dependent upon lifting the travel restrictions or the 

embargo. Is there potential for increased ag trade even if those restrictions are not lifted, or is this an integral issue here connected? 

Mr. GIBSON. Specifically on the travel issue, or——

Mrs. WALORSKI. Yes, on travel. Can we actually have increased 

trading without lifting, I am not advocating we do this, I am just 

asking how it works. 

Mr. GIBSON. I am not going to say that trade would not increase 

without lifted travel restrictions, but, going to see your customer, 

understanding how they need the product, when they need it, that 

55

is really important in the trade business. Our company travels to 

most of our customers to make sure that we are meeting their 

needs, and, quite honestly, to make sure that we feel comfortable 

in the financing piece on how we are going to get paid. So that 

travel piece is definitely an important part of the bill. 

Mrs. WALORSKI. Okay. And, Dr. Ribera, I have a question. Your 

estimate, and we just talked about this a second ago, says that 60 

to 80 percent of the Cuban diet is attributable to food imports. And 

that kind of echoes off of my colleague’s question. Do you believe 

imports will continue to account for most of the Cuban food supply 

in the foreseeable future, and what capacity does Cuba have for increasing their own domestic production? 

Dr. RIBERA. Cuba, being an island, we can compare it to other 

islands around, like the Dominican Republic or even Puerto Rico. 

Puerto Rico also imports about 85 percent of the food that they consume. So we would think that that will be the same thing in Cuba. 

Now, Cuba is the largest island in the Caribbean, but they are very 

limited in terms of agricultural land. They need a lot of input as 

well, a lot of investment in technology, fertilizer and other things, 

so I don’t think they are going to be able to ramp-up their production, soon. And if they do, I still think that they are going to depend on a lot of inputs to feed their people. 

Mrs. WALORSKI. And just another question, and it really echoes 

off of what Representative Thompson was talking about, and I believe he was talking about sugar. I sit in the State of Indiana, with 

Purdue University, with the Chicago Mercantile Exchange, CME, 

a lot of folks reading barometers on agriculture constantly. And, 

looking to the report with the weak crop prices, just disaster coming with low corn prices. And so my question is kind of the same, 

and I know that none of you here are from Indiana to speak on behalf of Indianan farmers, but could you just kind of speak to that, 

to how the access to the Cuban market could actually help Hoosier 

farmers in my district? Would this help with commodity prices? 

Can the U.S. recapture some of that lost market share in corn, 

given where Cuba is with corn? Can you just speak to that whole 

issue of the corn market? 

Dr. RIBERA. Sure. It is basically finding another market. If we 

don’t find another market for our excess production, it is going to 

stay in stock, and the stock, basically, is going to, basically, increase and reduce our prices. If we can find countries that we can 

place our corn, basically, it is going to increase the demand, which 

raises prices. Now, again, Cuba is a small country. They import about $2 billion, but it is still significant. If you ask the producers would they 

like to have access to a market of $2 billion in food imports, I am 

sure they are going to say yes. So it is important. And like I mentioned before, over 35 percent of farm income comes from agricultural exports, so we depend a lot on those foreign markets, and to 

keep those foreign market and compete to make a living for our 

producers. 

Mrs. WALORSKI. I appreciate it. And, Mr. Claver-Carone, just 

really quickly, you mentioned the idea, and somebody just asked 

this as well, about a good faith compromise. We are talking specifically about agricultural trade, where do you think the common 

56

ground is with Representative Crawford’s bill in finding some kind 

of common ground with what you are talking about? 

Mr. CLAVER-CARONE. Yes. Well, if we were to take the approach 

that I was mentioning before, and it was just about finding a way 

to do business and private finance it to private entities in Cuba it 

would be a different story, but what we are trying to figure out 

here is how to finagle a way to allow private financing to one entity 

owned by the Castro brothers. So obviously, what is a concern to 

us is, first and foremost, the issue of the property, of the trafficking 

and property from other Americans, that is something that needs 

to be addressed, and second, what happens tomorrow as we are 

seeing, particularly since the President’s policy, when the Cuban 

military takes over ALIMPORT directly and says, ‘‘Hey, I want 

that financing and I want to control it directly.’’ Do we trust them 

with our money? I, frankly, don’t, but——

Ms. WALORSKI. I appreciate it. And I yield back, Mr. Chairman. 

The CHAIRMAN. Mr. Abraham, 5 minutes. 

Mr. ABRAHAM. Thank you, Mr. Chairman. I appreciate that. And 

I appreciate this hearing. 

You have heard from everybody today that the status quo of the 

last 50 years has certainly not worked, and certainly hasn’t been 

beneficial to our American farmers. And when we don’t do anything, as Representative Crawford said, as a leadership country, we 

see what happens in countries like Cuba. And we are getting some 

interspersed with facts here. The fact is the last 50 years has not 

been good for Cuba, it has not been good for the American farmers, 

by any token, and as Mr. Scott referenced, we need to look at this, 

certainly, as an economic issue, and, certainly, we don’t want to 

forget the human rights issues of the Cuban people. But what we 

have been doing has not been working whatsoever. 

And you have Rouhani meeting with the Castros today, you have 

Kim Jong-un that wants to come over and meet with them, you 

have all these bad players that all of a sudden want to be part of 

the puzzle because we are not there, and that concerns me that if 

we are not there, they are there. Russia was there. I was in Cuba 

earlier this year, and I talked to no less than, I quit actually counting after 50 people. I was with cab drivers, we went out to the 

farms. I would talk to people on the side of the road that could understand my English, because of my southern drawl, and I asked 

them all the same question: do you want American products and 

do you want American tourists? And I already had a notepad because I thought I would get some debate, 100 percent said they 

want the products and they want our goods. 

So again, we need to look at this as a trade issue for our rice, 

and certainly other products, that will take care of our farmers 

first, and certainly, we want to help the Cuban people, but they 

have to help themselves, and we know that, and we have to help 

empower them with the American dollar. 

Ms. Lowe, on other countries that do trade with Cuba, do they 

honor their credit agreements, do they pay? 

Ms. LOWE. Well, I guess I don’t have any——

The CHAIRMAN. Microphone. 

Ms. LOWE. I keep forgetting that. Sorry. I don’t have any detailed 

personal knowledge of that. I do know there are many countries 

57

that are extending export credits in terms of insurance and guarantees to help their exporters make sales to Cuba and mitigate that 

payment risk. I know there was a renegotiation of a lot of the debt 

on Paris Club at the end of last year. There is some concern about 

the government’s ability to, over time, continue to make all of their 

payments on a timely basis. And I have heard anecdotally about 

some slow paying, but I am not aware of any defaults that have 

occurred recently. 

Mr. ABRAHAM. Mr. Claver-Carone, I read your testimony before 

I came here. Now, is it my understanding that ALIMPORT, that 

is not the only State-sponsored agency where you can get goods in. 

Is that a correct or an incorrect statement? I mean there are other 

ways to get goods into Cuba, is that right or wrong? 

Mr. CLAVER-CARONE. No, sir. All U.S. exports to Cuba have to go 

through ALIMPORT. It is the sole entity. And in regards to your 

first questions they were very interesting with regards to the credit 

risks, they have defaulted on every debt. The reason why they are 

now going through these debt restructurings with Paris Club and 

all its people is because they are forgiving debt that they have defaulted on before. 

I was looking for the exact quote, but I will just summarize, just 

in July 18 of this year, so a few months ago, Rau ́l Castro said, oh, 

by the way, yes, we are late paying debts again, and——

Mr. ABRAHAM. Well, if we don’t step up and get our products in 

there, and if you have people like Rouhani from Iran and Putin and 

Kim Jong-un that want to come in and support, are they going to 

pay the bills for Cuba? I mean who is going to prop this government up financially, and I use that term poorly, I know, but if we 

don’t get our products in there, and if we don’t get our tourists in 

there, putting American dollars in there, who is going to do it? 

Mr. CLAVER-CARONE. It is a great question. The only time that 

the Cuban regime has ever made any types of reforms has been 

when they have lost their subsidies. So the Soviet Union, after 

their collapse, and then now they made some after Venezuela and 

their oil collapse. But now, what we are seeing is that, since the 

Obama Administration’s new policy, they are actually stopping and 

they are slowing down, and things are getting worse again, because 

they think that we are now going to go subsidize them. 

Mr. ABRAHAM. Well, I guess that is my concern, is that I don’t 

want——

Mr. CLAVER-CARONE. That is right. It should be. 

Mr. ABRAHAM.—Venezuela or Russia or China paying Cuba’s bill 

because then they become a puppet government of that country. 

And believe it or not, it can get worse. 

Mr. CLAVER-CARONE. Yes. 

Mr. ABRAHAM. We want to make it better. I just can’t, we can’t, 

I am out of time. Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. Mr. 

Moolenaar, 5 minutes. 

Mr. MOOLENAAR. Thank you, Mr. Chairman. I appreciate this 

discussion very much, and, Mr. Crawford, for putting this legislation forward so we can have this discussion. 

I just want to assure Mr. Isbell and Mr. Gibson, I am very interested in seeing our agricultural product exports very strong and 

58

looking for new markets for our products. So I guess what we are 

talking about here is somewhat of a foreign policy question, and 

you are in the midst of this. So just to be sure, Ms. Lowe, I appreciate your comments. I believe you had at one point said creation 

of a new entity that would need to occur before you felt comfortable 

with financing. Is that accurate? 

Ms. LOWE. Well, I think——

Mr. MOOLENAAR. Microphone. 

The CHAIRMAN. Microphone. 

Ms. LOWE. You think I would learn by now. I think that would 

depend on, my understanding was that if we were not allowed to 

extend financing to ALIMPORT then there would have to be the 

creation of an entity that would be acceptable to us. So that may 

be a necessary step. 

Mr. MOOLENAAR. Okay. 

Ms. LOWE. Whether or not we would extend financing would be 

based on our due diligence, as we do on all of our borrowers to 

make sure they were creditworthy in our eyes. 

Mr. MOOLENAAR. Yes. Okay, I just found it interesting that we 

have talked about foreign government sort of subsidizing exports to 

Cuba, and also this idea of forgiving debt, that was kind of new information to me as well. And some people had mentioned the credit 

risk involved. I would think that would be part of your due diligence. So you think you ought to have the opportunity to evaluate 

that, but you weren’t in any way making a commitment to that 

right now. 

Ms. LOWE. No. I mean I don’t have enough information to do so. 

Mr. MOOLENAAR. Yes. 

Ms. LOWE. And I will say in the case of, for example, the Korean 

Trade Insurance Corporation, I would assume it is similar to our 

Export-Import Bank, they have announced $60–$70 million of credit insurance guarantees, so they recognize Korean companies are 

probably not going to feel comfortable exporting and taking that 

payment risk themselves to Cuba. So they are providing insurance, 

they want to promote that trade, and they are making some sort 

of cost-benefit assessment, right? I don’t know how much information they have as to the ability of the Cubans to pay them back 

on a timely basis or with some reasonably small amount of delay, 

but they have apparently determined that they want to have the 

job creation the access for their products, and they are willing to 

take on that credit risk to promote that trade because probably 

those Korean private companies wouldn’t want to sell just on open 

arm credit terms. 

Mr. MOOLENAAR. Okay. Well, thank you. And then, Mr. ClaverCarone, I was intrigued by your idea of private entities, that you 

would be okay with legislation that would open that up. Are there 

entities like that? Is there an infrastructure, or is that just something that would have to be developed? 

Mr. CLAVER-CARONE. I always mention, and there was an inherent contradiction in something that has been said before, when we 

say, oh, because we want to kind of expose the Cuban people to our 

ideas and have entrepreneurs, and I always tell people, have you 

ever been to Miami? It takes a Cuban about a week and a day to 

open up a store in Miami and to be a very successful entrepreneur. 

59

I mean this is inherent in them. And also when people travel to 

Cuba, and your delegations, and as you just mentioned, and others, 

they always say we love Americans. Now, this about this inherently. For 50 years, we have had sanctions and we have been enemies of the Castro regime, and the Cuban people love us despite 

all that onslaught of propaganda and lack of information. 

Mr. MOOLENAAR. So let me——

Mr. CLAVER-CARONE. So we are doing something right. 

Mr. MOOLENAAR.—let me build on that. So you feel confident 

that it would be possible to develop those kind of relationships, but 

would your concern be that the Castro regime would not allow that 

to take place? 

Mr. CLAVER-CARONE. Well, the Castro regime currently does not 

allow that in the sense that we believe in private enterprise, but 

there is something called the cuentapropistas, which are self-employment people, but they don’t own certificate of corporations, they 

are not able to sell their companies, they don’t have any stake. We 

want to encourage that and we want to build upon that. If those 

individuals were able to do that, just like when they get in a week 

and a day to Miami and open that up then that would be a positive 

trend. If the Congress sent that message to the regime that you 

need to allow your people to be independent entrepreneurs, have 

property rights, and be able to engage freely in trade with the 

United States, count me in. 

Mr. MOOLENAAR. And your feeling is the leverage that we have 

right now, we ought to use that to have some constructive change. 

Mr. CLAVER-CARONE. I believe that if our principle policy, if we 

are going to export our principles as we said, we should also make 

sure that we do it under conditions and under terms that are consistent with those principles. 

Mr. MOOLENAAR. Okay. Just to clarify, are you of Cuban——

Mr. CLAVER-CARONE. Yes, sir. 

Mr. MOOLENAAR. Okay. Do you have family or relatives in Cuba? 

Mr. CLAVER-CARONE. Yes, sir. Family and friends. 

Mr. MOOLENAAR. So when we talk about caring for the Cuban 

people, this is very close to you. 

Mr. CLAVER-CARONE. I venture to say that no one cares more, on 

this panel, than myself, as much as I believe, obviously, that everyone cares, but it is definitely personal. And to make a quick point 

in that sense, I am not against taking money from Castro. To the 

contrary, sell him as much as you can. Take his cash. Our concern 

is handing money to that regime through that funnel and through 

that filter, that then we don’t know how they are going to function 

with it, but that is our main concern. 

Mr. MOOLENAAR. Thank you. Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. Anyone else? 

Mr. Crawford? 

Mr. CRAWFORD. Thank you, Mr. Chairman. I appreciate you allowing me a little bit of latitude here. 

As you noted in your opening statement, there are certainly passionately held views on both sides of this issue, and I am certainly 

one of those. And I care about this issue, I care about the Cuban 

people, and as we have a familial bond with the Cuban people, as 

you have just expressed. I also care about our farmers. I represent 

60

1⁄2 of the U.S. rice crop. It is important to me. But let me just say 

that we have had this conversation about the need for safeguards, 

and I completely understand that. That is why the bill was written 

with those safeguards in place. In fact, it is the only bill I know 

of that lists financing restrictions on agriculture, but has the builtin safeguards. In this bill, the U.S. Government is prohibited from 

promoting products or financing exports with the Cuban Government, or any extension of the Cuban Government. This can only be 

done with private entities that are certified by the Secretaries of 

Agriculture and State. So it is right there in the text. 

Let me be clear about the concerns that we hear. We have already attempted to build the safeguards. Let me just ask you this. 

With all sincerity, and I know that because we are both so passionate about this, Mr. Claver-Carone, if you would be willing to 

continue the dialogue to work with us and work with me on refining this to the satisfaction of the folks in south Florida that are so 

passionate about it, as we are, and if we can do that, we have a 

path forward to try to reach an agreement that everybody can live 

with. 

Mr. CLAVER-CARONE. As I mentioned from the get-go, I have tremendous respect for everyone on this panel, for you, for everyone 

here. And we love agriculture, so we want to help U.S. agriculture. 

And likewise, I know that you don’t want to support a regime that 

is hurting our people. 

Mr. CRAWFORD. Right. 

Mr. CLAVER-CARONE. So, therefore, I am all open for continuing 

this dialogue and discussion, and finding ways to do so. 

Mr. CRAWFORD. I appreciate that. As time goes on, we are both 

probably going to be prone to displays of emotion on this, and hopefully we can overcome that and move forward productively. 

And again, I want to thank the witnesses, and particularly my 

friend, Mr. Isbell, who is in the middle of harvest and he took time 

away to come and be heard and represent the rice industry. Mr. 

Gibson, thank you. Ms. Lowe, Dr. Ribera, thank you so much. I appreciate it. 

And, Mr. Chairman, I thank you and the Ranking Member for 

your latitude. 

The CHAIRMAN. Thank you. The gentleman yields back. 

I also want to thank our panelists. As I said early on, there are 

passionately held positions on both sides of this issue. Mr. Isbell, 

you are at risk, if that harvest goes better while you are here, they 

may ship you off all the time to get you out of their hair so they 

can do it correctly. I know that is what they do with Doug LaMalfa. 

They couldn’t wait to get him back here. There are good people on 

both sides. And, quite frankly, I didn’t hear anyone say anything 

different as to where we want to get to. It is how you get there that 

is the struggle. Neither side’s arguments are completely persuasive. 

You are right, 60 years of a policy hasn’t worked, got that, but I 

am unpersuaded that our involvement in China and Russia has 

turned them into beacons of hope. All the zillions of dollars of investment there, the travel, all that stuff, didn’t work in those regimes either. This is the only country where it is the same two 

guys. I mean we all thought Father Time would get Castro by this 

point in time. 

61

I was down there in December of 2007, and we thought he was 

done. We were worried that if he died and the revolution broke out, 

we couldn’t get out of the country. Well, that is 8 years ago, and 

the old goober is still working it. So unlike Vietnam, unlike the Soviet Union, we are dealing with the same folks. And so I am not 

persuaded. You look at what happened after the President did the 

reset in December of 2014, as soon as he announced he was going 

to Cuba, that historic event, they started rounding up dissidents as 

a preemption, then arresting people for no good reason. Since that 

has happened, Internet connections have dropped. Cuba is now 

worse than Syria, Zimbabwe, Iran, China, Venezuela in terms of 

letting their people have access. When I was down there in 2007, 

there were ten of us on the trade delegation, and President Bush 

said don’t go. And we were down there. I was with nine guys, like 

McGovern, they all wanted instant opening relationships with 

Cuba. And so in every meeting there would be either McGovern or 

Greg Meeks or Jeff Flake or Jerry Moran, would say we are all for 

getting this thing done, except this guy, and they point to me. 

Right? So I got thrown under the bus every single time. At the exit 

interview, we had a big press conference, they had all the cameras 

up there, it was a big, huge array, and I got to go dead last because 

everybody else was worn out, and my comments were a regime that 

is afraid to let the Cuban people know the baseball box scores for 

the Major League Baseball, they are afraid to let their people see 

those Cubans who have fled the country doing well in baseball, are 

we making any progress? 

And so there are no good answers in this deal. There is no good 

solution. I am pleased that we are making some progress. Mauricio 

represents a passionate group of folks who want to get something 

done. Rick, you are representing a passionate group, and I am a 

cosponsor on your bill. There is a path forward. It is going to take 

wisdom and discernment, and nobody has the exact right answer, 

but I don’t see anybody saying we need to get to a different point. 

We all want to get to that point where the everyday lives of the 

Cuban people are a little bit better. This is not going to turn into 

a nice democracy the way we understand it, that is just not going 

to happen, but it ought to be better than it is. And we are in a position with leverage now that no other country has, that we can exert 

that leverage, at the same time not hurting our farmers’ and 

ranchers’ exports. The number, 135,000 tons, is about one percent 

of our rice production, and so the 500 would get closer to your four 

or five percent number. So it is not a panacea. I am unconvinced 

that corn is not being sold down there now, that somehow us selling our corn there is going to move the market price, because that 

is not an unfulfilled market. You have to have new demand, and 

that would be supplanting somebody else’s. And so all of the arguments have their goods and their bads, mine included, but this was 

probably the most respectful hearing we have had on a really contentious issue, deeply, passionately held opinions, and I am really 

proud of the Agriculture Committee for the way they conducted 

themselves today and explored this. And obviously, we are not 

done. 

So with that, I have, yes, sir. 

62

Mr. DAVID SCOTT of Georgia. Mr. Chairman, I just want to congratulate you on, again, pulling together a very timely, and it is a 

very, very important issue. And I would say that our strategy moving forward with Cuba could be summarized as sort of being like 

we need two trains running. There is no question that we need to 

deal with the horrendous human rights situations that you are concerned about, Mr. Chairman, in Cuba. There are no if, and, or buts 

about that. And then we have the other train running, which is an 

obvious one that helps us to get ready. Father Time has a way of 

dealing with a lot of problems that we may not be able to deal 

with. And I am reminded of when the Prophet Samuel came to 

David in the Bible, and he poured the oil on his head. David was 

a young fellow. And so he asked, ‘‘Samuel what do you do here, 

what are you doing.’’ And the only answer Samuel could give was, 

‘‘Be ye ready.’’ He didn’t know what that meant was be ready for 

the king. So all I am saying is that this other train that we have, 

making sure we are ready to get in there and to be able to open 

that market for many of our farmers are struggling, many of them 

depend upon that. And so this other train we will call, let’s just be 

ready, as Father Time might help us to work out the other side of 

the problem that you are so concerned with. 

Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman yields back. 

With that, under the Rules of the Committee, the record of today’s hearing will be open for 10 calendar days to receive additional materials and supplementary written responses from the 

witnesses to any question posed by a Member. 

This hearing of the Committee on Agriculture is adjourned. 

[Whereupon, at 12:08 p.m., the Committee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

63

1McMinimy, Mark A. ‘‘U.S. Agricultural Trade with Cuba: Current Limitations and Future 

Prospects.’’ www.crs.gov. Congressional Research Service, 1 Oct. 2015. Web. 12 Sept. 2016. 2 Adcock, Flynn, Luis Ribera, and Parr Rosson. ‘‘The Potential for Texas Agricultural Exports 

to Cuba.’’ www.cnas.tamu.edu. Texas A&M Center for North American Studies, Nov. 2015. Web. 

12 Sept. 2016. 

SUBMITTED STATEMENT BY HON. TED POE, A REPRESENTATIVE IN CONGRESS FROM

TEXAS

The United States’ policy towards Cuba is more than 50 years old, and it has 

failed. It has not hurt the Castro regime that is still in power, but it has hurt others, including Cuban citizens and American farmers. It’s time for a change, and an 

important step forward would be to reestablish agricultural trading ties between our 

two nations. 

Prior to the embargo, the United States was one of Cuba’s most important trading 

partners. With the embargo, that market has disappeared. In the years leading up 

to the embargo, Cuba was the ninth largest importer of American agricultural products. For U.S. long-grain rice, Cuba was the largest market for the exports.1 Now, 

instead of buying long-grain rice from Texas, Cuba buys its rice from farmers across 

the world, in places like Vietnam and South America (Argentina, Brazil, Uruguay), 

despite the Port of Houston being a mere 400 miles from the Cuban coast. 

The economic advantages of reestablishing agricultural ties between our two nations cannot be understated. For Texas alone, exports to Cuba would reach almost 

$19 million annually with an additional $24 million impact for supporting sectors, 

resulting in a total annual economic impact of approximately $43 million for the 

state, according to the Texas A&M Center for North American Studies. The economic boon would be felt across the nation. Trading ties to Cuba opens up a new 

market in a country that imports approximately 80 percent of its food supply. Gaining access to that market would be a huge opportunity for American agricultural 

producers, and we would have a competitive advantage that almost no other country 

has: geographic proximity. 

Sixteen years ago, the United States tried to reform our trading relationship with 

Cuba by enacting the Trade Sanctions Reform and Export Enhancement Act 

(TSRA). This law allowed the export of agricultural and medical commodities to 

Cuba for the first time since the embargo took effect in 1962. It did, however, come 

with a heavy set of regulations and stipulations. Exports to Cuba were only allowed 

on a cash-only and cash-first basis, requiring that cash payments must be made before U.S. agricultural products left U.S. ports rather than the more customary payment upon delivery. Though the law allows third party countries to help finance 

these exports, U.S. agricultural exporters are still prohibited from extending credit 

to Cuban buyers. Despite the difficulties that arose from complying with TSRA, U.S. 

exports to Cuba ballooned in the immediate years after its implementation, reaching 

a record $711 million in 2008. However, exports fell down to $300 million by 2014 

as the U.S. Government redefined the definition of a cash payment, a policy change 

that put Cuba at a higher risk and agricultural exporters discovered that the hopeful opportunity brought unwanted financial burden. Consequently, there have been 

no U.S. rice exports to Cuba since 2008. While there was a decline in U.S. exports 

to Cuba during this period, the overall market for Cuban agricultural imports skyrocketed to $2 billion.2

Under current law, there is no opportunity for U.S. agricultural businesses to 

trade directly with the Cuban people. Consequently, there is no real Cuban market. 

The current ‘‘market’’ is for trade with Cuba to go through ALIMPORT, Cuba’s 

state-owned and state-controlled entity that makes all decisions regarding U.S. imports into the Cuban market. 

Though well-intended, the 2000 reforms did not do enough. It’s time to do more, 

and that’s why I cosponsored H.R. 3687, the Cuba Agricultural Exports Act, with 

Congressman Rick Crawford (AR–1). This legislation amends TSRA to repeal the restrictions on export financing and give American agriculture producers access to the 

Department of Agriculture’s marketing programs. It also allows American entrepreneurs to invest in Cuban agricultural businesses so long as the State Department and the Department of Agriculture determine that the business is independent 

and has no affiliation with the Cuban Government. And, importantly, it explicitly 

prohibits investments in property that was confiscated by the Cuban Government 

on or after January 1, 1959. 

This bipartisan legislation is a testament to the will of our country’s agricultural 

producers. With fifty years of failed policy, it’s time for a change. It simply doesn’t 

make sense for us to restrict trade with Cuba. 

64

SUBMITTED STATEMENT BY DARIUS ANDERSON, PRESIDENT AND CHIEF EXECUTIVE

OFFICER, U.S. CAVA EXPORTS

Introduction 

Chairman Conaway, Ranking Member Peterson, Members of the Committee, 

thank you for the opportunity to submit this testimony for your consideration. 

I am Darius Anderson, Founder and CEO of U.S. Cava Exports. We are a California-based small business looking to export California wine, specialty crops and 

other products to the Cuban market. 

Despite the fact that we have willing sellers in the U.S., and willing buyers in 

Cuba, the current regulatory and statutory barriers in U.S. law make the business 

of exporting U.S. agricultural products exceedingly difficult. 

Today, in a warehouse in California, my company has four containers of California wine awaiting shipment to Cuba. Federal law prohibits our buyers from utilizing U.S. banks to finance their purchase of our product. So we wait. This delay 

costs us money. It means we cannot hire new employees. And it means we cannot 

develop this new and promising foreign market. 

For this reason, U.S. Cava Exports supports the Cuba Agricultural Exports Act, 

H.R. 3687, and any legislation that repeals 22 U.S.C. 7207(b) or the other unnecessary provisions that restrict trade and travel to one of our closest potential markets. 

Experience in the Cuban Market 

I chose to enter into this business with my eyes wide open. I am well versed in 

the long and sometimes unpleasant history between the United States and Cuba. 

And when I decided to start the company, I fully understood the significant legal 

and market access challenges that existed. 

But even knowing of the challenges, the facts are clear as day: there is a strong 

and growing demand for U.S. products in Cuba. 

I know this because I have been personally invested in working with the Cuban 

people, and to a lesser extent the Cuban Government, for more than 25 years. 

When I made my first visit to Cuba in 1992, I fell in love with the place. I loved 

the beaches, the culture, the music, and the food. I returned to the country several 

times through the 1990’s and as my appreciation continued to grow, I also came to 

understand the distinction between the political chasm between our governments 

and the real need to build cultural and personal ties between our citizens. 

So in 2002, I started to lead facilitate trips of like-minded Californians to visit 

Cuba to learn more about one of our closest neighbors. The trips focused on cultural, 

humanitarian and entrepreneurial exchanges. By 2010, our trips were so popular 

that we formalized our work and founded the nonprofit 501(c)(3) Californians Building Bridges. As of today, CBB has facilitated more than 70 trips to the island, and 

I have personally visited more than 50 times. 

I provide you with this background to underscore my point: I know first hand that 

the Cuban market is ripe for imports of U.S. agricultural products. 

The Wine Market 

There are three key factors that make Cuba a promising market for California 

wines.

(1) Who visits Cuba and will visit Cuba in the near-term;

(2) Proximity to the U.S.; and

(3) Growing wine consumption.

California wines are known around the world. But like any product, there are certain markets where California wines excel. 

The U.S. is, of course, the largest market for California wines. 

The next largest market is the EU, valued at $622 million in 2015 according to 

the California Wine Institute. The third largest market for California wine is Canada, valued at roughly $461 million. 

Compare these numbers to tourism data in Cuba. The Oficina Nacional de 

Estadı ́stica e Informacio ́n, the national statistics office, estimates that 41.6 percent 

of all tourists visiting the country in 2015 were from Canada; 5.6 percent of tourists 

visiting Cuba were from Italy; 5.1 percent were from Germany; 4.6 percent were 

from France; 4.1 percent were from England; 1.6 percent were from Spain. 

That means that 62 percent of all foreign travelers in Cuba are from regions 

where California wine exports excel. 

While that statistic alone would be enough to justify investment in this market, 

when you factor in the potential for U.S. citizens to more freely travel to Cuba, it 

is clear that the thriving tourism market is ripe for California wine. 

65

Furthermore, proximity to Cuba puts California wine at a competitive advantage 

over exports from other wine producing nations. Early market analysis shows that 

because of how close Cuba is to the U.S., California producers can get wine into the 

Cuban market at a fraction of the cost of our competitors in the EU, Australia, New 

Zealand, Argentina, and Chile. 

Finally, it is worth noting that it’s not just the tourism market that has great potential. Wine consumption in Cuba has consistently experienced double-digit growth 

since at least 2007. And with more than 11 million people on the island, the market 

potential for domestic sales is significant as well. 

Conclusion 

In order for U.S. Cava Exports and the rest of the U.S. agriculture industry to 

have full and competitive access to this market, Congress must act. 

The current laws put U.S. agriculture at a disadvantage not only compared to our 

competitors abroad, but also compared to other U.S. industries. Because even if the 

embargo is lifted, the financing restrictions operate as an independent barrier to 

trade with our neighbor. 

U.S. Cava Exports urges you to remove these un-necessary restrictions and in 

doing so, promote economic growth in the U.S. agriculture industry. 

Thank you for the opportunity to offer this testimony today, and for your thoughtful consideration of this issue. 

SUBMITTED STATEMENT BY RANDALL C. GORDON, PRESIDENT, NATIONAL GRAIN AND

FEED ASSOCIATION

The National Grain and Feed Association (NGFA) appreciates the opportunity to 

respectfully submit this statement for the record in conjunction with the House Agriculture Committee’s hearing on U.S. agricultural trade with Cuba conducted on 

September 14, 2016. 

The NGFA supports efforts to expand global market demand for U.S. agricultural 

products. As a charter member of the U.S. Agriculture Coalition for Cuba, the 

NGFA believes substantial benefits would be achieved by enacting legislation to authorize U.S. exporters to extend financing credit for purchases of agricultural exports. 

The NGFA, established in 1896, consists of more than 1,000 grain, feed, processing, exporting and other grain-related companies that operate more than 7,000 

facilities and handle more than 70 percent of all U.S. grains and oilseeds. Its membership includes grain elevators, feed and feed ingredient manufacturers, biofuels 

companies, grain and oilseed processors and millers, exporters, livestock and poultry 

integrators, and associated firms that provide goods and services to the nation’s 

grain, feed and processing industry. The NGFA also consists of 29 affiliated State 

and Regional Grain and Feed Associations, and has strategic alliances with the 

North American Export Grain Association and Pet Food Institute. 

Cuba is more than 4,000 miles from Europe and more than 2,000 miles from 

Brazil. But despite these logistical disadvantages, as well as the inherent productivity and competitiveness of U.S. agricultural producers and agribusinesses, the 

European Union and Brazil—not the United States—were the leading agricultural 

exporters to Cuba in 2014. Meanwhile, the United States, located just 90 miles from 

Cuba, constituted a mere 16 percent share of Cuba’s agricultural imports. 

A 2015 report by the U.S. Department of Agriculture’s Foreign Agriculture Service 

found that the U.S. share of the Cuban agricultural import market has declined, in 

part because of increased competition from countries that are able to provide export 

credits to Cuban import authorities. In Fiscal Year 2014, Cuba imported $1.873 billion worth of agricultural products, with the U.S. portion amounting to a paltry 

$300 million. Almost all U.S. agricultural exports to Cuba either were grain, feed 

or value-add products, such as poultry and meat that boost domestic grain and feed 

demand and create U.S. jobs. Thus, the Cuban agricultural market is a natural fit 

for U.S. agricultural product exports. 

The NGFA is realistic about the potential demand from Cuba’s agricultural import market. Total U.S. agricultural exports were valued at $152.5 billion in 2014, 

whereas Cuba’s total agricultural imports from all sources amounted to $1.873 billion. Regardless, Cuba is an available market in which the United States has a natural competitive production and transportation advantage. Additional agricultural 

trade with Cuba would provide real economic benefits to our country and represent 

another demand source for U.S. agricultural producers currently experiencing a decline in farm income. 

66

The U.S. agricultural supply chain competes very well throughout the world when 

export markets with a level playing field exist. There are numerous public and private organizations, such as the NGFA, that devote considerable time, effort and resources advocating policies and working with foreign governments to remove barriers to U.S. agricultural exports. But Cuba is a market where the United States 

unilaterally can remove a significant trade barrier—the restriction on financing purchases of U.S. agricultural products. The current ban on offering credit terms and 

requiring U.S. agricultural products to be purchased using cash or through thirdparty guarantees from foreign banks has put the United States at a competitive disadvantage compared to key foreign competitors. The lifting of these credit restrictions is needed to level the playing field. 

The NGFA thanks Chairman Conaway, Ranking Member Peterson, and the Committee for conducting this important hearing, and would be pleased to serve as a 

resource in providing the expertise of its member companies in working to better 

enable U.S. farmers, ranchers and agribusinesses to secure an increased share of 

Cuba’s agricultural import market. 

Sincerely,

RANDALL C. GORDON, 

President, 

National Grain and Feed Association. 

SUBMITTED LETTER BY BEN SCHOLZ, PRESIDENT, TEXAS WHEAT PRODUCERS

ASSOCIATION

September 12, 2016

House Committee on Agriculture, 

Washington, D.C.

RE: Written Testimony of the Texas Wheat Producers Association for the 

House Agriculture Committee Hearing On American Agricultural 

Trade with Cuba, September 14, 2016

The Texas Wheat Producers Association (TWPA) appreciates this opportunity to 

provide comments to the House Committee on Agriculture pertaining to the public 

hearing: American Agricultural Trade with Cuba.

We are extremely grateful for the hearing today to discuss this important issue 

and will continue to support legislative efforts that will promote the flow of trade 

with Cuba, including H.R. 3687, the Cuba Agricultural Exports Act. We commend 

the Members of this Committee for recognizing the great potential of the Cuban 

market and the need to expand export opportunities for U.S. farmers. 

Cuba is the largest wheat market in the Caribbean, a region in which U.S. market share is typically 80–90 percent. According to data reported by Texas A&M University, Cuba imported $299 million of wheat in 2013 from the European Union and 

Canada. If financing restrictions and other obstacles were removed, the U.S. wheat 

industry fully expects to gain significant market share in Cuba, providing additional 

export value to Texas wheat producers. 

At one time, Texas was a leading exporter to Cuba, but due to excessive regulations and current ‘‘cash-in-advance’’ requirements, no wheat has been traded between the two countries since 2011. Texas wheat producers have increased our efforts to promote the flow of wheat to Cuba, but we now rely on Congressional action 

to ease the obstacles associated with the trade of agricultural goods between the two 

countries. 

This important discussion is taking place while farmers are struggling with a 56 

percent decline in farm income, as estimated by USDA. Our producers are faced 

with record global wheat supplies and large crops at home which highlight the need 

for additional export opportunities. As an organization, we urge the Committee to 

strongly consider policy options, such as the elimination of financing restrictions, 

which will open the critical market in Cuba. 

In closing, U.S. and Texas wheat farmers could benefit greatly from easing trade 

restrictions with Cuba. We see a market that is close in proximity and in great need 

of our product. These factors create the opportunity to develop a $450 million new 

market for U.S. agricultural producers. Once again, we appreciate you bringing a 


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67

spotlight to this issue and look forward to working with Members of the Committee 

to bring legislative action which will promote agricultural trade with Cuba. 

Sincerely,

BEN SCHOLZ, President, 

Texas Wheat Producers Association. 

SUBMITTED STATEMENT BY GORDON STONER, PRESIDENT, NATIONAL ASSOCIATION OF

WHEAT GROWERS

Thank you, Chairman Conaway and Ranking Member Peterson, for holding an 

‘‘American Trade with Cuba’’ hearing to address financial concerns that affect U.S. 

producers in trade with Cuba. The National Association of Wheat Growers (NAWG) 

appreciates the opportunity to submit this written testimony for the record. 

Cuba is the largest country by area and population in the Caribbean. With a population of over 11 million people Cuba consumes on average 800,000 metric tons 

(MT) worth $200 million of wheat per year over the past 10 years. Since Cuba produces no wheat domestically and is the largest Caribbean country, this also makes 

them the largest wheat importer in the Caribbean. Unfortunately, due to U.S. restrictions, Cuba imports the bulk of their wheat from the European Union (EU), 

73%, and Canada, 25%, with none coming from the U.S. in recent years. 

As a country with a logistical and price advantage, we find it greatly troubling 

that our own self-imposed restrictions add a financial burden to the purchasers 

which in turn creates a barrier for U.S. wheat access to the marketplace. When Congress passed the Trade Sanctions Reform and Export Enhancement Act (TSRA) of 

2000 it allowed trade in agricultural products with Cuba. TSRA requires Cuban 

buyers to pay cash-in-advance. For agriculture products the sole buyer is Cuba’s 

food import agency known as A[LIMPORT]. In 2005 the regulation was amended 

by the Treasury Department’s Office of Foreign Assets Control (OFAC) to also require purchasers to obtain and present letters of credit from a third-party, foreign 

bank, that would be responsible for the cash payment, prior to shipments, in lieu 

of payment from A[LIMPORT]. This method of payment prior to shipment is not 

practiced in international grain trade due to necessary processing time and document verification that typically takes 1 to 3 days of transit before payment approval. 

Once this change, which was unique to agriculture, took place the U.S. share of 

wheat exports to Cuba dropped from 48% in 2005 to 38% percent in 2006 to 28% 

in 2008. As of 2011 the U.S. has not exported wheat to Cuba, losing out to competitors like the EU and Canada. 

However, in 2015 regulations were implemented that specified ‘‘cash payment in 

advance’’ to mean ‘‘cash before transfer of title and control’’ to alleviate the necessity 

of cash payment prior to shipment. The White House statements indicated this 

change was intended to improve U.S. agriculture and food sales to Cuba, but due 

to Cuba’s high credit risk status, its cash-poor position and the U.S.’s inability to 

offer credit terms, this has not driven more agriculture trade and these financial 

obstacles still remain. 

All of this continues to help competitor countries, who do not have similar barriers, access the Cuban wheat market at the expense of U.S. wheat farmers. For 

example, EU exporters have the flexibility to offer financing, structure payments 

most profitable for them and their banks can interact with Cuban banks directly, 

eliminating these unnecessary burdens that affect the U.S. wheat producers. Meanwhile, U.S. wheat producers are missing out on the largest country in the Caribbean, a region where U.S. wheat has 80% of the market share. Cuba imports 30 

million bushels of wheat every year worth $200 million, and with the U.S. having 

the closest ports to Cuba from which to import wheat this could be a significant 

market if financial barriers were improved. 

With improved financial means to conduct business with Cuba, specifically in 

grain trade, U.S. wheat would gain additional market access that could benefit the 

farm economy, which is simultaneously experiencing record low wheat prices and 

record high surplus straining wheat farmers across the nation. NAWG supports the 

Cuba Agricultural Exports Act (H.R. 3687) introduced by Rep. Rick Crawford (R–

AR) and Chairman Conaway, and others, and wheat farmers from across the country urge the Committee to take up this or other legislation that will lift these financing restrictions.


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GORDON STONER, President, 

National Association of Wheat Growers. 

SUBMITTED STATEMENT BY AMERICAN FARM BUREAU FEDERATION

There is potential for substantial growth in U.S. agricultural sales to Cuba, but 

agricultural financing restrictions are hurting that growth. The U.S. food and agriculture industry is the only industry that must use third-country, non-U.S. banks 

for financing sales or have a cash transaction from a Cuban customer. These requirements increase transaction costs and limit the opportunity for sales into the 

Cuban market. Instead, Cuba buys most of their food imports from Brazil, Argentina, Vietnam, the European Union and Canada. Cuba imports up to 80 percent of 

its food, with a focus on rice, poultry, dairy, soy products, wheat and corn. The top 

U.S. agricultural exports to Cuba are poultry, soybean meal and corn. With normal 

financing, the U.S. could capture a significant share of the Cuban market for rice, 

wheat and many other food and agricultural products. 

U.S. agricultural and food products can be exported to Cuba for humanitarian reasons under the Trade Sanctions Reform Act of 2000 (TSRA). While TSRA opened 

the channel for shipping agricultural commodities and food products to Cuba, restrictions on financing those sales have made it difficult to compete with our foreign 

competitors in the Cuban market. The U.S. has fallen from its position of a top supplier of agricultural products to Cuba to being the fifth largest supplier after the 

EU, Brazil, Argentina and Vietnam. 

U.S. agriculture is at a global disadvantage as we watch foreign competitors continue to take away our market share because of their ability to offer generous credit 

terms. As recently as 2008, we were selling nearly $700 million in agriculture products to Cuba annually. In 2015, our sales were $150 million in what is nearly a $2 

billion market—U.S. market share is now less than ten percent of Cuba’s agricultural imports despite the superior quality of our products. Located just 90 miles 

from the U.S. coast, with all of the transportation and logistics advantages for efficient marketing, Cuba should be growing, not shrinking, as a market for American 

agriculture. 

Real opportunities exist for increased sales of U.S. agricultural products to Cuba 

as growing demand is driven by 11 million Cubans and by increasing tourism. Cuba 

is the second most visited island in the Caribbean, welcoming more than 3.0 million 

visitors in 2014. In 2015, Cuba experienced double digit tourism growth welcoming 

17.4 percent more visitors than it did in 2014. 

Since the normalization process between the U.S. and Cuba began in December 

2014, successive rounds of amendments to Cuba-related regulations have been made 

through the Treasury and Commerce Departments. However, agriculture is at a 

unique disadvantage due to the codified restrictions of TSRA that prevent similar 

regulatory authorizations from being extended: as of January 2016, there is a general policy of approval for exports and re-exports of some agricultural items, but not 

those defined as agricultural commodities. 

Because U.S. agriculture is the outlier among American business, focus is needed 

on the economic value Cuba provides as a trading partner. In the U.S., net farm 

income fell by 55 percent from 2013 to 2015, the biggest 2 year decline since the 

1920s farm crisis. There is no better time than now to provide American farmers 

and agribusinesses the tools they need to expand agricultural exports to Cuba and 

help our industry survive this difficult economic environment. 

We support legislative efforts to advance American agricultural trade with Cuba. 

It is necessary for Congress to act to allow private financing for agricultural exports 

to Cuba. 

SUBMITTED STATEMENT BY CORN REFINERS ASSOCIATION

The Corn Refiners Association commends Chairman Conaway for convening this 

hearing on ‘‘American Agricultural Trade with Cuba,’’ and appreciate the opportunity to submit our views. Since 1913, the Corn Refiners Association has represented the U.S. corn refining industry. Our members manufacture products such 

as sweeteners, starches and feed that are used in food, animal feed, textiles, home 

improvement and commercial products that are consumed all over the world. 

In late 2014, the U.S. began the normalization process with Cuba through a series 

of amendments to Cuba-related regulations within the U.S. Departments of the 

Treasury and Commerce. Those changes have allowed for different U.S. industries 

to seek out new business opportunities in Cuba and for the authorized export and 

69

financing of those exports in particular sectors, such as telecommunications, civil 

aviation, and entertainment. 

However, agriculture remains at a unique disadvantage due to the codified restrictions of the Trade Sanctions Reform Act of 2000 (TSRA). While the Act has allowed for U.S. agricultural and food products to be exported to Cuba for humanitarian reasons, it also prevents regulatory authorizations from being extended and 

prohibits U.S. exporters from extending credit to Cuba’s agricultural importers. As 

a result, the U.S. fell from being Cuba’s number one supplier of agricultural products in 2003 to fourth in 2012. 

Given its proximity to the United States—just 90 miles off U.S. coastline—and 

with 11 million consuming citizens, Cuba is a natural market for the United States. 

In addition, Cuba’s agricultural imports are expected to grow as increased tourism 

fuels demand for food products, especially value-added products, and as remittances 

flow more freely due to recently revised U.S. policies. 

It is clear that significant opportunities exist for American agribusiness in Cuba, 

from exporters of agricultural commodities and food products to associated industries that would benefit from greater market access. Unfortunately, foreign competitors such as Canada, Brazil, the European Union and Argentina are increasingly 

taking market share from U.S. industry because those countries do not face the 

same financing and antiquated trade policy restrictions. Removing commercial barriers would allow U.S. agriculture to competitively serve the Cuban market. 

It should also be recognized that normalizing commercial relations with Cuba 

would enhance Cuban citizens’ access to affordable food while allowing U.S. farmers, 

ranchers and food companies to efficiently address Cuban citizens’ food security 

needs. Expanding trade with Cuba would represent a positive development for the 

nutritional health and economic opportunities of the Cuban people, as well as an 

expanded market for American agriculture. 

For the reasons listed, the Corn Refiners Association urges you to support favorable legislation that leads to normalizing commercial relations with Cuba. In so 

doing, we respectfully urge you to reject any legislative language that would reverse 

or hinder our ability to fully compete with other countries currently exporting agricultural products to Cuba. 

We appreciate your consideration of our views and stand ready to be of assistance 

to the Committee. 

SUBMITTED LETTER BY MISSOURI RICE RESEARCH AND MERCHANDISING COUNCIL

September 14, 2016

Hon. K. MICHAEL CONAWAY,

Chairman, 

House Committee on Agriculture, 

Washington, D.C.;

Hon. COLLIN C. PETERSON, 

Ranking Minority Member, 

House Committee on Agriculture, 

Washington, D.C.

Dear Chairman Conaway and Ranking Member Peterson:

The Missouri Rice Research and Merchandising Council (MRRMC) is pleased to 

present written comments in relation to today’s hearing on American Agricultural 

Trade with Cuba before the House Committee on Agriculture. Thank you for holding 

the hearing and for providing us the opportunity to make comments on the Cuban 

market. 

Twelve years ago on about this very day, U.S. Special Trade Ambassador Al Johnson got an earful today from the leaders of the Missouri Rice Research and Merchandising Council over a lunch of Missouri barbecue in the heart of Missouri rice 

country. 

‘‘We appreciate Ambassador Johnson coming all of the way out to rural Missouri 

to talk trade with us,’’ said the late Sonny Martin, Chairman of the MRR&MC. 

‘‘We know he’s been working to pry open some of the world markets that close 

the door in the faces of U.S. rice farmers, and we appreciate his hard work.’’

At the meeting, rice producers from around Missouri aired a number of trade concerns with Ambassador Johnson. The issues discussed included the pending WTO 

agriculture negotiations; the recently concluded CAFTA agreement; brewing rice 

trade disputes with Mexico and the European Union; and the need to assist U.S. 

70

rice farmers to regain markets embargoed by the United States, especially Cuba and 

Iraq. 

Mr. Martin pointed out ‘‘Rice farmers have been hurt more than the producers of any other crop by our own government’s trade embargoes. Markets like Cuba, Iran, and Iraq—once our largest export markets—have all 

been closed to us by the unilateral actions of our own government. It is too 

bad that Ambassador Johnson must work his tail off flying all over the world to convince other governments to crack open their rice markets, while customers like 

Cuba could and would open the doors wide to buy hundreds of thousands 

of tons of U.S. rice if our own government would simply let us sell our rice 

without restriction.’’

So as former Congressman Mo Udall once said ‘‘Everything has been said but 

not everyone has said it.’’

The Missouri Rice Research & Merchandising Council is established under state 

law to represent Missouri’s rice producers. The Board of the Council is duly elected 

by the membership, which includes all of Missouri’s rice growers. The Missouri Rice 

Research & Merchandising Council is a member of the U.S. Rice Producers Association. The U.S. Rice Producers Association representing rice farmers in Mississippi, 

Missouri, Texas, California, Louisiana and Arkansas is the only organization solely 

representing the views of the U.S. rice farmer. 

SUBMITTED LETTER BY U.S. AGRICULTURE COALITION FOR CUBA

September 14, 2016

Hon. K. MICHAEL CONAWAY, Hon. COLLIN C. PETERSON,

Chairman, Ranking Minority Member,

House Committee on Agriculture, House Committee on Agriculture, 

Washington, D.C.; Washington, D.C. 

Dear Chairman Conaway and Ranking Member Peterson:

The undersigned organizations of the U.S. Agriculture Coalition for Cuba 

(USACC) are pleased to present written comments in relation to today’s hearing on 

American Agricultural Trade with Cuba before the House Committee on Agriculture. Thank you for holding the hearing and for providing American food and agriculture interests the opportunity to explain the importance of the Cuban market 

to our farmers, ranchers, and businesses. 

USACC represents a broad range of more than 100 agricultural commodity and 

farm member organizations along with members of the food and agricultural private-sector that support fully lifting the financing, trade, and travel bans for Cuba. 

As you are well aware, U.S. agricultural and food products can be exported to 

Cuba for humanitarian reasons under the Trade Sanctions Reform Act of 2000 

(TSRA). While TSRA opened the channel for shipping agricultural commodities and 

food products for humanitarian purposes to Cuba, remaining U.S. restrictions on financing those sales have made it difficult to compete with our foreign competitors 

in the Cuban market. U.S. restrictions require Cuban buyers of U.S. agricultural 

products to pay cash-in-advance or finance the transaction through third-country 

banking institutions. 

U.S. agriculture is at a global disadvantage as we watch foreign competitors continue to take away our market share because of their ability to offer more favorable 

credit terms. As recently as 2008, our industry was selling nearly $700 million in 

agriculture products to Cuba annually. In 2015, our sales were under $200 million 

in what is nearly a $2 billion market. U.S. market share is now less than ten percent of Cuba’s agricultural imports, despite superior quality, competitive prices of 

our products, and logistical advantages. Located just 90 miles from the U.S. coast, 

Cuba is a natural market for American food and agriculture businesses, as it has 

been in the past. 

Since the normalization process between the United States and Cuba began in 

December 2014, successive rounds of amendments to Cuba-related regulations have 

been made through the Departments of Treasury and Commerce. Those changes 

have allowed for different industries to explore business opportunities in Cuba and 

for authorized export and financing of those exports in particular sectors, such as 

telecommunications, civil aviation, and entertainment. However, agriculture is at a 

unique disadvantage owing to the statutory restrictions of TSRA that require Congressional action. As of January 2016, the general policy of approval for exports and 

re-exports does not extend to all agricultural commodities. 

71

Given that U.S. net farm income fell by 55 percent from 2013 to 2015, the biggest 

2 year decline since the 1920s farm crisis, this is a time to focus on ways to expand 

agricultural trade. Providing American farmers and agribusinesses with the tools 

they need to engage in mutually beneficial commerce with Cuba can contribute to 

U.S. agriculture’s economic growth. 

Focus is needed on the economic value Cuba provides as a trading partner, allowing for this Congress to weigh-in by moving the critical legislation needed to allow 

private financing for agricultural exports to Cuba. As Congress considers legislation 

during the remainder of the year, we urge you to reject any language that would 

reverse or hinder our ability to fully compete with other countries currently exporting agricultural and food products to Cuba. 

USACC appreciates your consideration of favorable legislation that advances the 

efforts of American agricultural trade with Cuba and USACC encourages your continued support of our vital industry. 

Sincerely,

Agriculture Organizations

American Farm Bureau Federation National Sorghum Producers Iowa Farm Bureau 

American Soybean Association National Turkey Federation Kansas Wheat 

American Seed Trade Association North American Export Grain Association Food Export Association of the Midwest 

USA 

American Feed Industry Association North American Meat Institute Food Export—USA Northeast 

Association of Equipment Manufacturers Rural & Agricultural Council of America Louisiana Rice Council 

Cherry Marketing Institute U.S. Canola Association Michigan Apple Association 

Corn Refiners Association U.S. Cattlemen’s Association Michigan Bean Shippers 

Council of State Governments U.S. Dairy Export Council Michigan Bean Commission 

CNFA: Cultivating New Frontiers in Agriculture U.S. Dry Bean Council Michigan Milk Producers Association 

Dairy Farmers of America U.S. Soybean Export Council Michigan Corn Growers Association 

Global Aquaculture Alliance U.S. Rice Producers Association Michigan Soybean Association 

Independent Professional Seed Association USA Dry Pea & Lentil Council Michigan Potato Industry Commission 

International Dairy Foods Association USA Rice Federation Missouri Corn Growers Association 

Matter Agribusiness Council of Indiana Missouri Soybean Association 

National Association of Wheat Growers Arkansas Rice Growers Association Missouri Department of Economic Development 

National Association of Egg Farmers Arkansas Farm Bureau Missouri Department of Agriculture 

National Barley Growers Association Arkansas Rice Growers Association Missouri Rice Council 

National Black Growers Council California Rice Producers Missouri Forest Products Association 

National Chicken Council Illinois Corn Growers Association Missouri Farm Bureau 

National Corn Growers Association Illinois Cuba Working Group Mississippi Rice Council 

National Council of Farmer Cooperatives Illinois Soybean Growers Ohio Farm Bureau 

National Farmers Union Illinois Farm Bureau National Potato Council 

National Foreign Trade Council Indiana Farm Bureau Texas Farm Bureau 

National Grain and Feed Association Indiana Corn Growers Association University of Missouri-Fisher Delta Research Center 

National Milk Producers Federation Indiana Soybean Alliance Virginia Department of Agriculture and 

Consumer Services 

National Oilseed Processors Association Indiana Corn Marketing Council Alcorn State University

Agriculture Corporations

ADM Hampton Alternative Energy & Feedlot Sandy Ridge Cotton Company 

Advanced Drainage Systems Hover Farms Smithfield Foods 

AGCO Intertek Agriculture Services South Louisiana Rail Facility 

Bunge Kaehler Agriculture Enterprises Sun-Maid Growers of California 

Butterball Kerley Nutritional Consulting St. James Winery 

Cargill, Incorporated Louis Dreyfus Company Synergy Resource Solutions, Inc. 

Chicago Foods International Missouri BioZyme, Inc Thomas E. Jennings and Associates, Inc. 

Campbell Farms Missouri Burnett Farms Turkey Knob Growers 

Clark AG Company Martin Rice Company TRC Trading Group 

CoBank Michigan Allied Poultry Industries, Inc U.S. Wellness Meats 

Franklin Electric Net Worth Feeds & Feeding U.S. Cava Exports 

GreenStone Farm Credit Services Orrick Farm Services 

CC:

Members of the House Committee on Agriculture

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