Cuban Export Opportunities Could Help Dairy Industry Recovery

March 12, 2010

KANSAS CITY, Mo. - Easing regulatory hurdles that are impeding exports to Cuba could contribute to recovery in the dairy industry, according to testimony today before the U.S. House of Representatives Committee of Agriculture by John Wilson, senior vice president of marketing and industry affairs for Dairy Farmers of America, Inc. (DFA).
Speaking in support of the Travel Restriction Reform and Export Enhancement Act (H.R. 4645), Wilson, who also serves on the board of directors for National Milk Producers Federation (NMPF), emphasized that facilitating greater U.S. dairy exports to Cuba could be a step in the right direction toward helping the dairy industry regain ground lost during the 2009 dairy crisis.

“U.S. participation in the global dairy market is essential to putting the U.S. dairy industry on firmer footing going forward,” Wilson said. “It is critical that we work to expand opportunities for our dairy exports to allow our dairy producers, as well as their dairy manufacturing partners, to grow and prosper.”

H.R. 4645 seeks to address the most significant issues hindering trade to Cuba under the 2000 Trade Sanctions Reform and Export Enhancement Act (TSREEA). The bill calls for a clarification on the “cash in advance” requirement that – since being redefined by the Office of Foreign Asset Control in 2005 – has added complexity and expense for potential buyers. The bill also calls for the elimination of TSREEA’s “direct banking” provision, which similarly inflates costs and complicates transactions.

“Cuba is a market where we should be a natural preferred seller due to our strong proximity advantages,” Wilson said. “Yet it is clear that we are now among the least-preferred of suppliers given these technical and regulatory impediments to U.S. agricultural sales to Cuba.”

The bill – which was introduced by House Agriculture Committee Chairman Collin Peterson (D-Minn.) and Rep. Jerry Moran (R-Kan.) and is co-sponsored by more than 30 members of Congress – also aims to eliminate restrictions on Americans’ rights to travel to Cuba. Allowing Americans to travel to Cuba would help stimulate demand for and sales of dairy products in that country.

A June 2009 International Trade Commission Updated Study on U.S. Agricultural Sales to Cuba found that fully eliminating financing and travel restrictions on U.S. exports to Cuba would have boosted 2008 dairy sales to Cuba from $13 million to between $39 and $87 million.