CubaNews / November 2005
By Larry Luxner
U.S. firms dominated last month’s 23rd annual Havana International Fair (FIHAV), walking away with $270 million in contracts with state purchasing agency Alimport for food and agricultural commodities.
Some 380 U.S. executives representing 188 companies from 31 countries attending. In all, FIHAV attracted 1,564 foreign exhibitors representing 1,039 companies from 42 countries.
The event solidified the United States’ position as No. 1 food supplier to Cuba this year, despite trade restrictions imposed by the Bush administration.
Alimport Chairman Pedro Alvarez said in an interview that about $500 million of his $1.5 billion budget this year went to buy U.S. cereals, grains, poultry and other products. That compares with second-place Vietnam at more than $150 million, in large part due to its sale of 600,000 metric tons of rice to Cuba.
During the week-long event, Alimport also signed contracts with companies from other nations, including Brazil ($25 million worth of frozen chicken); Canada ($29 million in wheat, powdered milk and wood); China ($33 million worth of meat and beans); New Zealand ($35 million in powdered milk) and Vietnam ($67 million worth of rice).
Under the Trade Sanctions Reform and Export Enhancement Act of 2000, U.S. exporters may sell food and agricultural commodities to Cuba on a cash-only basis.
“The food we buy goes directly to our people and the measure created delays and insecurity, forcing us to divert $150 million to other suppliers,” Alvarez said, insisting existing restrictions meant Cuban food purchases were half of what they could be.
Since 2001, Cuba has contracted to buy over $1.4 billion in U.S. farm goods, including shipping and stiff bank fees to send payments through third nations. At least half of that has gone to large food conglomerates led by Archer Daniels Midland, Cargill and FCStone.
Here’s a look at half a dozen states that are happily feeding Cuba’s hungry market:
ALABAMA: More than $23 million in deals were signed between Alimport and Alabama suppliers of agricultural commodities, reports the state’s agriculture and industries commissioner, Ron Sparks.
“This fair turned out to be a big success for Alabama’s farmers. Our poultry and timber industries have done an especially remarkable job,” Sparks told the Southeast Farm Press.
Alabama firms present at FIHAV included Goldkist, PECO Foods, Sylvest Farms, Pil-grims Pride and Wayne Farms.
Utility poles — considered an agricultural commodity and therefore eligible for export to Cuba under TSRA — are being sourced from several southwest Alabama manufacturers. Northern Gulf Trading Group, first-time trade fair participants from Mobile, had contracts signed for sales of wooden utility poles.
Significant quantities of both poles and poultry are shipped from the Alabama State Port Authority in Mobile on a monthly basis.
According to Sparks, poultry exports from Alabama to Cuba have risen 328% this year, with an estimated 40% of all U.S. poultry sold to Cuba being sourced from the Dixie State.
IOWA: Another winner during FIHAV was Iowa-based FCStone, which sold 75,000 metric tons of corn worth $8 million to Alimport. That’s on top of the $92 million in commodities FCStone has already sold to Cuba since 2001.
Despite the Bush administration’s restrictions on food sales, FCStone’s sales director, Chris Aberle, says sales have not been hurt. “Fortunately for us, we continue to get our fair share of the Cuban business,” he said.
Adds Don Mason of the Iowa Corn Promo-tion Board: “There’s no love lost between our governments, but I believe Cuba is worth paying attention to. Iowa farmers can’t afford to ignore any market.”
MICHIGAN: Cuba is expected to buy $10 million worth of Michigan farm products in the next 18 months, including apples, dry beans, potatoes and livestock, according to state Agriculture Director Mitch Irwin.
A delegation led by Irwin signed Michigan’s first-ever trade promotion agreement with Alimport during FIHAV, as negotiations continued toward deals for specific products. “We’re making good progress,” Irwin said. “It’s our hope that we’ll be able to accelerate these discussions and obtain these contracts in the next several months.”
Other members of the Michigan delegation to Cuba were Jim Byrum of the Michigan Ag-riculture Commission; Wayne Wood, chief of the Michigan Farm Bureau; Don Armock of Riveridge Produce Marketing; Bob Green of the Michigan Bean Commission; Ezequiel Gimenez of North Bay Produce, and Julia Hersey of the Michigan Apple Committee.
NEBRASKA: Gov. Dave Heineman and members of an 18-person delegation from Ne-braska signed contracts calling for Alimport to buy 87,500 metric tons of Nebraska wheat, 12,000 tons of dry, edible beans and 25,000 tons of soybean meal.
This brings the total of Nebraska goods sold in Cuba since August to more than $27 million, according to Southwest Nebraska News. Terms of the private contracts were not disclosed.
“We came back to Cuba with a specific goal of helping our private producers sign contracts to fulfill the $30 million memo of understanding I signed after our first visit,” said Heineman. “To have signed contracts for so much of that amount is a testament to Nebraska ag producers and their quality products.”
Also signed during FIHAV was a new accord for Alimport to purchase up to $5 million in Nebraska beef products, and a separate deal with the United Soybean Board to buy an additional $30 million in U.S. soybeans, some of which will come from Nebraska producers.
NORTH DAKOTA: During FIHAV, Cuba signed an agreement with the state of North Dakota to buy $20 million worth of agricultural products including peas, lentils, soy beans and spring wheat. That’s in addition to the more than $30 million the state has already contracted to provide Alimport this year.
“I couldn’t be more pleased,” Sen. Byron Dorgan (D-ND) said via phone to Cuban and North Dakota officials gathered in Havana, adding that he’ll continue to push for normalized trade with Cuba.
“I think trade is very important, and that using it as a weapon in foreign policy is always inappropriate,” he said. “Many of us are working very hard to erase these impediments.” North Dakota’s agriculture commissioner, Roger Johnson, voiced similar sentiments.
“It takes more work for us to sell to Cuba because the federal government is not really supporting trade with Cuba, and so the state has to put in a lot more energy to accommodate that trade,” Johnson told CubaNews.
“When our government changed the definition of ‘cash in advance,’ it made things much more complicated, a lot more red tape, a lot more paperwork and fewer banks around the world are willing to accommodate the business,” he said. “That adds unnecessary expenses which benefit nobody — not U.S. farmers, not the Cuban people. It’s just lost money nobody gets except for international bankers.”
VERMONT: At least 100 Jerseys, Brown Swiss and Holstein cows from Vermont are among the 300 head of U.S. cattle ordered by Alimport during FIHAV.
Vermont Agriculture Secretary Steve Kerr told the Rutland Herald that the average price for the last shipment was $2,100 per head, but that milk prices are beginning to decline, and livestock prices may follow suit.
Kerr said the fact that two Vermont cows — a Jersey heifer and a Holstein, both gifts from Vermont’s Putney School — were displayed outside the FIHAV trade pavilion was a sign that the Cubans value the Vermont animals.
In addition, Cuba last year said it would buy powdered milk and 4,000 bushels of Vermont apples. The apple sale has been stalled because Cuban inspectors have run into trouble getting visas from the State Department.