Rice Producers Watch Cuba Trade Talks

AP
Rice Producers Watch Cuba Trade Talks
Tuesday May 29, 4:02 pm ET
By Jon Gambrell, Associated Press Writer
Ark. Rice Growers, Others Could Profit if Cuba Trade Rules Lifted

LITTLE ROCK (AP) -- As U.S. Rep. Marion Berry attends agriculture trade
talks this week in Cuba, Arkansas rice producers and others are hoping
restrictions on trade to the Communist nation will be lifted.

Dropping current rules that require all purchases be paid in advance
could let growers enter a market estimated to consume 700,000 tons of
rice a year, of which only 79,000 tons came from the United States last
year, said Greg Yielding, executive director of the Arkansas Rice
Growers Association. That new market could buoy an industry whose
European markets dwindled after discoveries of unapproved strains of
genetically modified rice.

"Cuba could dwarf that," Yielding said. "We're just getting just a
little bit of their capacity right now. The reason for that is the
economic sanctions that we have to endure."

In Arkansas last year, farmers harvested 1.4 million acres of rice,
worth more than $892 million, U.S. Department of Agriculture statistics
show. Meanwhile, the state exported only $1.4 million worth of goods to
the island nation last year, said Scooter Hardin, a spokesman for the
Arkansas Economic Development Commission.

Hardin said the U.S. trade rules on Cuba limit how goods can be sold,
particularly the Treasury Department's requirement that all be purchased
in cash in advance of their delivery.

The rule, put in place in 2000 and later clarified in 2005, burst a
one-year bubble of increased trade with Cuba, Hardin said. A commission
report shows the state exported $21.6 million in meat products and about
$10 million in grain exports in 2004. That dropped down to $2.7 million
in total exports in 2005, after the rule clarification.

"They began enforcing it," Hardin said. "2005 reflects that."

Now, U.S. producers have a unique opportunity to enter Cuba's rice
market, said Keith Glover, president and chief executive officer of
Producers Rice Mill at Stuttgart, a farmer-owned cooperative. Glover
said ocean freight rates jumped in the last few months, making shipping
to Cuba from the Asian rice market even more expensive.

"It really makes U.S. rice very competitive now," he said. "U.S. rice
has a premium with the value of the rice, but the freight rates are such
an advantage."

Expanding exports could help another Arkansas company as well. Cuba
represents 3 percent of Springdale-based Tyson Foods Inc.'s chicken leg
quarter exports, said spokesman Gary Mickelson, making it the company's
fifth largest destination for the dark-meat product.

Berry, D-Ark., arrived Monday in Havana as part of a delegation of five
congressional members attending the agricultural summit that lasts
through Wednesday. Berry, whose father's own rice deal collapsed after
the Castro-led revolution in 1959, has supported lifting U.S. trade
embargoes against the nation.

Berry, as well as U.S. Rep. Mike Ross, D-Ark., are co-sponsors on a bill
proposed in the House to eliminate the 45-year trade embargo on Cuba.
The bill remains in committee.

For Yielding, he said he understands the idea behind the embargo, but
believes it should only apply to high-end electronics and other products
that can be used to support the government. Otherwise, Cuba will
continue to import its rice from China, Vietnam and Thailand, which also
have poor human rights records, he said.

Opening the food market benefits the Cuba's poor -- as well as U.S. rice
growers, he said.

"I think that history has showed us economic sanctions when it comes to
food don't work. Why would you want to starve the people?" he said. "Why
would you want to do that and build up even more resentment to the
United States?"

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