State's trade with Cuba at standstill

Rurland Herald, Vermont

April 16, 2006

By Bruce Edwards Staff Writer

After an initial flurry of activity, Vermont's fledgling export trade with Cuba appears to be in a holding pattern.

From the perspective of Vermont's secretary of agriculture, Steve Kerr, U.S. exports to Cuba are being squeezed by the Bush administration's imposition of tighter economic sanctions against the communist island.

At the same time, Kerr and others says the Cubans remain committed to doing business with Vermont, especially the purchase of high quality cows from the state's farmers.

Since Vermont Lt. Gov. Brian Dubie's inaugural trade mission to Cuba two years ago, Cuba has purchased 76 cows from Vermont farmers and 4,000 metric tons of powdered milk. The latter was supplied in part by the St. Albans Cooperative Creamery and Agri-Mark through DairyAmerica, an association of eight dairy cooperatives around the country.

The government of Fidel Castro also agreed to buy 4,000 bushels of Macintosh apples and a deal was in the works last fall to buy additional cows. But the Cubans haven't followed through on the apple deal or the purchase of additional cows, Kerr said.

He said one likely reason is the Bush administration's attempts to make trade with Cuba more difficult.

"The whispering I'm getting is that it's just so bloody difficult to do business with anyone in the United States now," Kerr said. "So, I think probably our opportunity has dried up a little bit, or a lot, for some period of time."

He added that if it chooses, Cuba has the option of buying cattle from Canada "at the same price with no hassle."

Kerr said Cuba hasn't shut the trade door on Vermont. In fact, he said the Cubans were very pleased with the genetics of the Vermont Jerseys and Holsteins that were delivered last August and would like to buy additional cows for breeding.

"They are ready to come back for more but it's hard to see how they're going to come back for more given the trade barriers," Kerr said.

Two of the Vermont cows have given birth to bulls. Little Debbie, a Jersey donated by students at the Putney School, gave birth to a bull that the Cubans named Don Ramon, in honor of Fidel Castro's father, Kerr said. The Holstein bull was named Bull Durham, a reference to the baseball movie of the same name.

Florida businessman John Parke Wright IV, who brokered the sale of the Vermont cows, was more upbeat on future deals with Cuba saying he expects "more orders this year."

"The Cubans wish to buy dairy cattle from the United Sates and discussions are under way between the Holstein Association and the Cuban buyers who are discussing three things: one the supply of cattle to build up the dairy herd; two, technical cooperation in animal husbandry; and three veterinary cooperation especially in light of animal diseases."

He said future shipments would include cows from Vermont, Maine, New York and Pennsylvania.

While Wright remains optimistic about future deals with the island nation of 11.3 million people, he, like Kerr, voiced concerns about current U.S. policy toward Cuba.

"If the U.S., is not a reliable supplier of food, they can look to neighboring countries to the south," said Wright, whose family's business ties to Cuba go back several generations.

He argued that it's inhumane for the Bush administration to use food as a weapon in its effort to pry Castro from power.

Dr. Gerardo Quaassdorff of the Brattleboro-based Holstein Association USA also remains optimistic that the Cubans are in the market for additional Vermont heifers.

"There will probably be some exports in the near future," said Quaassdorff, a veterinarian and the Holstein Association's executive director of international marketing and development. "Last year at this time we were still waiting for the Cubans to make some decisions in regard to the how many they needed," he said.

Meanwhile, he said the initial shipment of U.S. registered Holsteins and Jerseys are faring well in Cuba's tropical climate.

"The good news is that the heifers that went there are doing fine … and that means they're going to be some repeat customers," he said.

Quaassdorff also said that the price of milk dropping in the U.S. should make more heifers available for sale to the Cubans.

While acknowledging that difficulties remain when it comes to trade with Cuba, Quaassdorff said that the process to purchase more cows is moving at roughly the same pace as last year. "It's just a matter of when."

According to the U.S.-Cuba Trade and Economic Council, exports of food and agricultural products from the U.S. to Cuba declined 11 percent between 2004 and 2005 from $392 million to $350.2 million. The trade figures do not include shipping costs, bank fees or other charges that Cuba typically includes in its trade totals. Those added costs, the New York-based trade group says, cannot be verified raising questions about the reliability of the Cuban government's data.

During the first two months of this year, U.S. exports to Cuba actually increased $11.1 million.

The 44-year old U.S. trade embargo of Cuba prevents most U.S. exports to Cuba. The only exception is food and agricultural products which have been permitted since Congress passed the Trade Sanctions Reform and Export Enhancement Act of 2000.

The largest U.S. exports to Cuba in 2005 were chicken, corn, wheat, rice, soybeans and powdered milk.

While Kerr blames the Bush administration for thwarting trade and Cuban officials have complained about tighter cash payment requirements by the U.S., the U.S Cuba Trade and Economic Council disputes that assertion and cites other reasons for the decline in exports, including closer and more financially beneficial trade relations with Venezuela and China as well as increased trade with Canada and South American.

John Kavulich II, senior policy adviser with the U.S Cuba Trade and Economic Council, added that Cuba has failed in its strategy to successfully lobby U.S. companies, state governments and Congress to relax trade restrictions.

"The strategy of the government of the Republic of Cuba has not been successful given that purchases remained relatively unchanged — regardless of what companies or the United States government did or did not do relating to the regulatory and legal environment," Kavulich said in an e-mail.

Contact Bruce Edwards at bruce.edwards@rutlandherald.com.