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Cuba: The Next Frontier for Agribusiness Products

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Kevin Braig

Given the current global surplus in most commodities like wheat, corn and oil driving down prices and farm income, the emergence of new market that would demand U.S. agribusiness products would be timely and welcome indeed.

Such a new market appears poised to emerge in an unexpected place … Cuba.

Although the President Barak Obama’s administration has lifted some of the restrictions imposed by the United States’ decades old trade embargo of Cuba, that embargo still prohibits the financing that is necessary for U.S. agribusiness to export agricultural products to Cuba. But that may soon change.

Bipartisan legislation that would help agriculture exporters sell products in Cuba is getting attention again. North Dakota Senator Heidi Heitkamp and 13 co-sponsors are urging the Senate to pass Heitkamp’s bill, the Agricultural Export Expansion Act of 2015, which would lift the ban on private banks and companies offering financing for the export of agricultural goods to Cuba.

In addition, U.S. Secretary of Agriculture Tom Vilsack included a request to fund the establishment of a U.S. Department of Agriculture (USDA) field office in Cuba as part of the federal budget sent to Congress on February 9.

Vilsack said the goal was to alert Congress on the expanded trade opportunities in Cuba. Today, 80 percent of Cuba’s food is imported. In the past the U.S. supplied about half, but today that figure is significantly less because of the trade embargo and how credit is managed. Vilsack also points to the fact that the U.S. doesn’t have a presence in Cuba to work through difficulties that arise in any trading relationship.

As part of budget request materials released February 9, USDA said the agency needs an in-country presence to cultivate key relationships, gain firsthand knowledge of the country’s agricultural challenges and opportunities and develop programs for the mutual benefit of both countries. Vilsack said he believes it is important Congress considers this proposal, as they believe there is a broad base of support within the agricultural community for expanded trade opportunities.

In sum, while we have come a long way in a short time, the ability to do business with Cuba—although more widely permitted—remains hampered by byzantine regulations. Companies and individuals looking to do business in Cuba must be vigilant in staying up to date with the latest changes to those regulations. Continue to check back with us for updates on the status of U.S. relations with Cuba.

This article has been contributed by Kevin P. Braig, a partner in our firm’s Columbus office.  Kevin focuses his practice on agribusiness and environmental compliance and litigation. He has experience representing large scale agricultural operations in the area of livestock permitting and in communicating and negotiating with both state and local governments, neighbors and citizens groups, and other members of the national agribusiness community.

For more information, please contact Kevin Braig at kbraig@slk-law.com.

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