Emerson files bill to adjust Cuba trading
Saturday, March 26, 2005
If a recent government ruling to restrict agricultural trade with Cuba isn't reversed, Southeast Missouri rice farmers say it could mean the loss of the country's third-largest buyer of U.S. rice and another stinging financial hit to add to lost subsidies, low commodity prices and the ever-rising costs of doing business.
"I just can't understand why we would not want to trade with anyone," said Gary Branum, a rice farmer in New Madrid, Mo. "Why would you restrict trade? It's harder and harder to make a profit. I don't know how much longer we're going to be able to keep our young farmers interested in doing this."
U.S. Rep. Jo Ann Emerson last week introduced a bill to reverse a February ruling of the U.S. Treasury Department, which issued an interpretation of the phrase "cash in advance" as it applies to trade with Cuba.
In the past, Cuba has been able to pay cash on delivery for U.S. agricultural shipments. New Treasury rules mandate payment in advance for such exports to Cuba. The Emerson bill -- co-sponsored in the U.S. Senate by Sen. Saxby Chambliss, R-Ga. -- would revert the rules back to the way they were before the Treasury ruling.
The ruling says the island nation has to pay cash "prior to shipment of the goods from the port at which they are loaded." Since the 40-year-old embargo was eased in 2000 to allow medicine and food to be sold to Cuba, Cuba has paid via a third-country bank as soon as the ship carrying American goods sailed into Havana harbor.
Because of the U.S. economic embargo against the communist government, there can be no direct financial links between U.S. and Cuban banks. Cuba is not allowed to export into the United States and all imports must be paid in cash.
After the ruling, Cuba -- which has imported $90 million worth of American products since the beginning of the year alone -- said it may be forced to stop buying from America.
"The whole thing, in my opinion, is political," Emerson said Friday. "We keep trying to stick it in the eye of [Cuban leader Fidel] Castro. But by doing that, we hurt our farmers more than anybody else and we hurt the Cuban people. It's not going to make them rebel against Castro. I am totally stupefied by this."
The ruling applies to all agricultural products and medicine, but Southeast Missouri rice farmers say it would especially hurt them. Under the old ruling, cash sales of rice to Cuba resulted in more than $1 billion in farm goods, including almost $100 million of rice.
Many rice farmers are worried about what the ruling will mean, especially at a time when they are seeing shrinking farm subsidies, rising costs of fertilizer and fuel and escalating equipment costs.
"It's just another deficit to our bottom line," said Chris Williams, a rice farmer in Poplar Bluff, Mo. "I could see us losing that entire market. Meanwhile, the U.S. has record supplies on hand. The rest of the world is short and we've got more than we need. It doesn't make any sense."
New Madrid's Riceland Foods, the largest rice mill in Missouri, is a cooperative owned by 9,000 rice farmers in Missouri, Arkansas, Mississippi, Louisiana and Texas. Riceland markets the rice that farmers produce.
Bill Reed, a spokesman for Riceland, said that Riceland was the first U.S. company to sell rice to Cuba once sanctions were eased five years ago.
Half of the rice produced in the U.S. is exported. But 75 percent of Riceland's rice is exported, meaning it could hurt local farmers harder, Reed said. In fact, Reed said, Riceland shipped about half of the milled rice that Cuba has imported in the past three years.
"International trade to Cuba is very important to the rice industry of Missouri," he said. "And Cuba's going to get their rice from somewhere. It ought to be us."
Besides, Emerson said. Making it tougher to trade with Cuba is not going to topple Castro or bring an end to communism there.
"Opening up relationships is the best path to democracy for countries like Cuba," she said.
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