The Obama administration's move to restore diplomatic relations with Cuba could lead to increased sales of North Dakota crops to the communist island nation, though some issues would need to be sorted out, officials say.
North Dakota farmers grow an abundance of dry peas, dry beans, lentils and potatoes, which are all big parts of the Cuban diet. Over the past 12 years, the state has exported an average of about $1 million worth of agricultural goods to Cuba annually through a humanitarian food exemption to the U.S. trade embargo, according to North Dakota Trade Office data. The agency's executive director, Dean Gorder, said there is the potential for even bigger sales to Cuba.
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"The population of Cuba is about 11 million people. If you look at Africa with hundreds of millions of people, in the overall scheme (Cuba) is not a large market, but it still could be an important market," he said. "They need the food we produce."
The biggest hurdle for North Dakota exporters to overcome when selling to Cuba is federally imposed banking restrictions. Some past sales have had to be conducted through foreign banks, Gorder said.
Companies wanting to sell to Cuba also have to compete with cheaper Chinese beans, said Bill Thoreson, sales manager at North Dakota-based North Central Commodities and president of the U.S. Dry Bean Council. However, Cuba still could be a "substantial" market, he said.
"If we have normalized trade relations with them and are able to do away with some of the banking regulations, I believe there's some real potential to do business with Cuba," he said. Thoreson said his company shipped some beans to Cuba after a hurricane several years ago, and that it would be very interested in doing more business there.
North Dakota officials have long looked at Cuba as a potentially big market. Agriculture Commissioner Doug Goehring organized a trade trip to the country four years ago, and former Agriculture Commissioner Roger Johnson visited Cuba eight times before becoming president of the National Farmers Union in 2009.
"The Obama administration's announcement will not only help the people of Cuba — who clearly need economic development — but will also open new markets for U.S. family farmers, who are always interested in new trade opportunities," Johnson said.
U.S. Sen. John Hoeven, R-N.D., said easing trade restrictions could benefit U.S. farmers and the Cuban people, but that he thinks Cuba's government "needs to first change its approach to human rights."
U.S. Sen. Heidi Heitkamp, D-N.D., who visited Cuba in February, said the country could be a market for not only crops, but also American farm equipment. Normalizing relations "will support North Dakota's economy and help address low American commodity prices by opening new markets," she said.
Gorder said officials don't yet know whether Cuba would be a big market for farm machinery.
"We haven't done a lot of research into farming styles, what are their field sizes, what are their technological abilities," he said. "All those factors come into play."
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