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Louisiana governor's trip nets $15m sales commitment
CubaNews / March 2005

By Larry Luxner

Gov. Kathleen Blanco this month became the first governor of Louisiana to visit Cuba since the 1959 revolution that brought Fidel Castro to power.

Blanco’s Mar. 8-10 trip and her widely publicized lunch with Castro — criticized by Republicans opposed to improved relations with Cuba — coincided with a commitment by state-run food purchasing agency Alimport to buy $15 million in Louisiana farm commodities between now and the end of 2006.

“We expect that we will have visits going to Cuba periodically throughout the next 18 months, taking producers so that they can have direct access to buying agents and match their needs with Louisiana products,” Department of Economic Development Secretary Michael Olivier told CubaNews.

Olivier, who accompanied Blanco to Cuba, said two specific contracts worth a combined $2 million were signed during the three-day visit. The first is a deal by Anpro Trading LLC of Metairie, La., to sell Alimport 160 metric tons of whey powder to be used by the Cuban government to make a milk drink for children. Likewise, Louisiana Rice Mill will ship 10,000 tons of long-grain rice to Cuba next year.

The two companies completed their deals by requiring Alimport to obtain letters of credit from third-country banks. The letters conform to OFAC’s requirement of cash in advance or “certain financing by third-country financial institutions.”

While the financing agreement seems to follow the requirements of the new regulations, terms of the Louisiana contracts must still be approved by OFAC. The basis of all such sales under the Trade Sanctions Reform and Export Enhancement Act of 2000, which allow U.S. companies to sell food to Cuba, as long as Havana pays cash in advance.

The first shipment to Cuba following passage of TSRA left the Port of New Orleans in December 2001. It consisted of corn sold to Alimport by commodities giant Archer Daniels Midland Co. of Decatur, Ill. Since then, Louisiana port facilities have accounted for 56% of all U.S. exports to Cuba, according to the U.S.-Cuba Trade and Economic Council.

“If you don’t go there, you lose out,” said Olivier, who laid the groundwork for Blanco’s trip by cultivating a strong business relationship with Alimport Chairman Pedro Alvarez.

“Last December, I led a delegation of Louisiana producers to Cuba for a summit marking the third anniversary of that first shipment to Cuba,” Olivier said. “We reconnected with Pedro Alvarez, who was interested in direct sales from Louisiana, since many of our previous sales had been through third parties. We told him our governor was very pro-active, and he indicated that Alimport would be interested in a commitment should the governor come to Cuba.”

Olivier, speaking in a phone interview from Baton Rouge, said the most important product Louisiana can offer Cuba is rice.

“The quality of Louisiana rice is superior, as well as our ability to ship that rice at low cost to Cuba, as opposed to them having to import rice from Vietnam at very high cost,” he said. “Other important products we can sell Cuba are plywood and telephone poles.”

Telephone poles may be a far cry from what Congress had in mind when it authorized food sales to Cuba as a humanitarian gesture following the devastation of Hurricane Michelle in 2000.

But they qualify because lumber is an agricultural commodity — and that’s a plus for Louisiana, considering that New Orleans is only 582 nautical miles from Havana.

“Up until 1959, Cuba was our largest trading partner,” said Olivier, noting the many historical ties between Cuba and Louisiana. “When the embargo is lifted, there will be opportunities for Louisiana producers that will grow if we establish a relationship now.”

Olivier said Alimport never pressured state officials to lobby Congress to lift the embargo, though the governor did feel obliged to meet with Castro — knowing that such a meeting would raise controversy back home.

“Our intention was to do business with Alimport. We were their guests, and the meet-ing happened while we were there. The leader of a country with whom you’ve just signed $15 million in deals asks to have lunch with the governor. What do you do?”

Olivier, who attended the lunch, said Castro “was very inquisitive about Louisiana. He demonstrated the breadth of his knowledge about everything from no-till agriculture to laser technology.”

Some published reports have indicated that the Bush administration is pressuring Republican lawmakers in Louisiana to censure Gov. Blanco for meeting Castro, though Olivier says those rumors are unsubstantiated, and that “our governor has never been contacted by the White House.”

As for the letter of credit requirement imposed by OFAC, Olivier thinks it’s a mistake.

“This was suggested under the guise of protecting U.S. interests, as a further protection to make sure U.S. producers get paid. But we found that U.S. producers have been getting paid over the last three years, so I don’t know why this would be imposed. It just makes things more difficult for our producers.”

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