For 55 years, Arkansas rice farmers have peered anxiously southeast toward an island infamously only 90 miles from Florida.
Cuba.
In that time, farmers have been unable to sell their commodities there because of the long-time diplomatic estrangement and trade embargo that began under the Eisenhower and Kennedy administrations. But tangible progress under the Obama administration is opening the door for the United States and Cuba to normalize relations.
If Congress votes to lift the trade ban, few industrial sectors stand to gain as much as agriculture in general and Arkansas rice and poultry farmers in particular.
While that process remains murky, some within the state’s congressional delegation support proceeding.
“While I welcome the restoration of trade between the U.S. and Cuba on behalf of Arkansas agriculture and manufacturers, Congress must proceed with caution and deliberation in response to the President’s decision,” said Rep. Rick Crawford of the 1st District. “I pledge to lend my voice and the voice of Arkansas businesses to what promises to be a thorough and robust debate.”
Sen. John Boozman said open trade could change political views within the island nation.
“I’ve been working at opening this market up to Arkansas products since I came to Congress in 2001. What we’ve done for the last 50 years hasn’t worked. It’s time to change,” he said. “I believe we can change the world through personal relationships. When you trade goods and services you’re also trading ideas.”
Boozman said agriculture trade could result in tens of millions of dollars flowing into the state.
“Normalized relations with Cuba stand to have a tremendous impact on Arkansas’ agriculture,” he said. “We’re the top rice-producing state in the nation and one of the top producers of broiler chickens. Cuba imports much of its food and both of those commodities are staples of the Cuban diet.
“Arkansas is uniquely positioned geographically to export these goods to Cuba. Estimates indicate Arkansas could add nearly $80 million annually to its economy.”
Industry officials are optimistic.
“It was the No. 1 market for U.S. rice back then, and certainly it could be significant again,” said Bill Reed of Riceland Foods. “In the government rations that each Cuban gets, we understand that they get a portion of rice, and it is central to their diet. They appreciate quality, and, of course, many of them are familiar with U.S. rice and the quality compared to other locations.”
Logistically, Cuba is a perfect trading partner.
“That’s what makes the United States an attractive supplier to Cuba from the Cuban standpoint,” Reed said. “Currently, when you have a large, ocean-going vessel filled with rice coming from Vietnam, it is only going to be able to unload in the port of Havana, and that is going to take several months for the transportation.
“In the case of the United States, we can actually have smaller vessels that could dock at other ports around the island. So, you would not have as much land transportation for the product, and that is big for them.”
But hurdles remain before the first load of rice heads down the Mississippi River.
“The key issue is that the administration had to make a move on Cuba, which it did,” Reed said. “Now, Congress has to officially lift the embargo to really move this thing forward because you must have an ability to finance international purchases. The situation we find at this point is that the Cubans just don’t have lots of cash. They really need the tourism business to build the foreign exchanges so they can buy food.”
Even though rice and poultry are the two most likely commodity targets for Cuba, increased sales for those products would have a ripple effect throughout the state’s agriculture economy.
For example, if poultry growers sell more chickens, they need more chicken feed, of which soybean meal is an ingredient.
A need for more chicken feed means more need for soybean meal.
Carrying that a step further, chicken litter is a highly regarded fertilizer.
More chicken litter available means lower prices for fertilizer, which means input costs go down and profitability goes up for producers using the litter.
Those producers, in turn, have more resources to spend on equipment and services, among other things.
“It can really drive an entire local market just trying to satisfy the market for poultry,” said Dr. Lanny Ashlock of the Arkansas Soybean Promotion Board.
Sign up for Daily E-news
