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By Special to the I-R
Last Updated: March 04, 2010
House Agriculture Committee Chairman Collin Peterson (D-Minn.), Rep. Jerry Moran (R-Kan.) and 37 additional original co-sponsors introduced a bill last week to ease trade and trade restrictions with Cuba.
The bill had been anticipated for a number of months, with NAWG and other pro-trade groups urging original co-sponsorship among their constituents' Members.
Travel Restriction Reform and Export Enhancement Act, H.R. 4645, would take a number of steps to enhance trade with the island country, including:
· requiring agricultural exports to Cuba to meet the same payment requirements as exports to other countries;
· requiring payment when the title of the shipment changes hands;
· eliminating a requirement that payments to U.S. agricultural sellers must pass through banks in third countries - a restriction unique to ag products; and
· lifting restrictions on U.S. citizens traveling to Cuba, which would facilitate a closer trading relationship and increase demand for high-quality food.
Since passage of the 2000 Trade Sanctions and Reform Act, U.S. farmers have seen $4 billion in sales into the Cuban market, but market potential in Cuba is far from maximized due to the trade restrictions.
Ron Suppes, Kansas Wheat Commissioner from Dighton, says the bill holds a lot of potential for wheat producers. “If passed, it should increase wheat exports to Cuba by 100%. It is going to be very positive for the American farmer," he says.
The bill allows for cash payments to be made to U.S. financial institutions when a Cuban buyer receives commodities, rather than when the order is placed. According to Moran, the bill also eliminates a trade barrier by allowing direct cash payments from a Cuban buyer to a U.S. financial institution. Current rules force payments through foreign banks before the funds can be transferred to U.S. banks - which only increases the price of American agricultural products. H.R. 4645 will also allow U.S. citizens to travel to Cuba. This will eliminate bureaucratic red tape and allow American farmers and ranchers to market and sell their goods more competitively to Cuba
With no domestic wheat production, Cuba represents substantial potential for U.S. wheat growers. Cuba's 11.4 million people consumed an average of 890,000 MT of wheat per year over the past ten years. NAWG and U.S. Wheat have long supported any effort to ease trade restrictions with Cuba, which cost the U.S. wheat industry an estimated $40 million per year.
Rebecca Bratter, director of trade policy for U.S. Wheat Associates, says Cuba struggles with liquidity and is diverting wheat purchases to those countries that can provide credit.
NAWG urges wheat producers whose Members have not signed onto the legislation to encourage them to do so.
The House Agriculture Committee is scheduled to hold a hearing on March 11 to look at trade with Cuba. Jerry McReynolds, who will then be NAWG president and who has traveled to the island nation for trade purposes, will testify on behalf of NAWG and the wheat industry.
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