American farmers find fertile market

By JENALIA MORENO
Copyright 2003 Houston Chronicle

CANCUN, Mexico -- A year ago, when U.S. farmers and businessmen gathered in this resort for the first time to discuss sales of agricultural products to Cuba, no
one knew what to expect.

Even Cuban officials didn't have a good idea how much rice, soybeans and corn they would buy from U.S. growers. They estimated perhaps $37 million worth of
U.S. farm goods would cross their docks to cover their losses after Hurricane Michelle in November 2001.

Since then the Cubans have signed contracts to buy $255 million worth of goods.

"They just kept buying," said Kirby Jones, president of the U.S.-Cuba Trade Association, which hosted the four-day U.S.-Cuba Business Conference here and in
Havana.

This year, the farm, business and trade officials meeting with Cuban officials estimate they will purchase $3 billion worth of U.S. agriculture products by 2005.

Archer Daniels Midland alone has sold more than $70 million worth of soybeans, corn, rice and other food products since former President Clinton lifted the ban on
this trade. And the agribusiness giant hopes to add food additives and preservatives to the list.

While there has been intense opposition by some Americans to expanded trade with Cuba -- because they see trade making it harder for them to push Fidel Castro
from power -- speakers at the conference all pushed for further easing of trade limits.

They focused on the need to end a ban on financing for Cuban purchases, which was put in to quell the protests by the anti-Cuban lobby.

"It will certainly put us on a level playing field with other countries," said Tony DeLio, vice president of Archer Daniels Midland.

While farmers are allowed to sell many of their products to Cuba, the U.S. government has an elaborate system of payment rules, according to Pedro Alvarez, the
chairman of Alimport, the Cuban government agency that imports food products.

The United States allows Americans to sell their goods to Cuba on a cash-only basis.

Cubans must make the payment for purchases of U.S. goods to a foreign bank, which forwards it to a U.S. institution. They paid an additional $8 million in foreign
exchange fees in the past 15 months because of this system, Alvarez said.

Despite the cost of doing business with Americans, Cubans are still interested in buying goods from their northern neighbors. They want an end to the embargo, so
Americans could do business with Cuba and travel there freely.

Cuban officials pointed out that they welcome American business officials and that they have paid for the goods they had purchased. Many critics say Cubans are
known for defaulting on their debts to trading partners.

"The purchases in the last 15 months show that Cuba is willing and ready to normalize relations between our two countries," said Raul de la Nuez, Cuba's minister of
foreign trade.

After four decades of the Cuban embargo, such growth in exports has obviously delighted many of America's farmers and agriculture-related business owners.

They can send their goods to a market of nearly 11 million people and 2 million tourists annually.

"It's true that the Cuban market is not China," joked Ernesto Senti, vice minister with the Cuban Ministry for Foreign Investment and Economic Collaboration.

However, it's a marketplace only 90 miles south of Florida.

And U.S. ports, including those along the Gulf Coast, are also benefiting from the recent trade liberalization. Beaumont, Freeport, Galveston and Houston have all
had goods shipped from their docks to Cuba.

The Port of Galveston sponsored this year's and last year's conference and has shipped wheat to Cuba.

The state's rice farmers are pleased that the embargo restrictions were eased because Cubans consume more rice than Texans grow every year, according to the
Texas Farm Bureau.

"So far it's been the larger companies" that have sold rice to Cuba, said Bob Reed, staff director of the Texas Farm Bureau's Bay City office. "What we're trying to
do is focus on smaller farmers."

Reed, a rice grower, has sold his product to a big milling company that exports to Cuba, among other countries. However, it is impossible for farmers to determine if
they have sold produce that has reached Cuban shores.

Reed said he has not felt the economic impact of the easing of the embargo but sees recent sales to Cuba as a first step to even more sales for Texans.

"They're a very large market," said Tim McGreevy, executive director of USA Dry Pea & Lentil Council in Moscow, Idaho.

American pea farmers have sold 20,000 tons to Cuba in the past year and expect those sales to increase because every year Cubans import 200,000 tons of peas,
which they add to their rice and soups.

That's only 50,000 tons shy of what American pea farmers grow every year, McGreevy said.

For some business officials, trading with Cuba brings a certain sense of nostalgia. In the 1950s, Peter Johnstone's father coined the Rumba brand name for the peas
he sold to Cuba.

"It was the Cuban business that really inspired that," said Johnstone, speaking of the Rumba name. Johnstone, president of Spokane, Wash.-based Spokane Seed
Co., sells peas to Cuba through an exporter.