CUBAN TRADE RULING COULD HURT ALABAMA FARM EXPORTS
MONTGOMERY, Ala. -- A ruling issued last week by the Treasury Department has drawn criticism from Alabama agricultural leaders who say it could mean the loss of export dollars for Alabama farmers. The Alabama Farmers Federation Board of Directors unanimously adopted a resolution Monday calling on Alabama's congressional delegation and all of Congress to oppose the new cash-in-advance policy.
Alabama Farmers Federation Executive Director Mike Kilgore visited Cuba with Alabama Agriculture Commissioner Ron Sparks in December to discuss Alabama agricultural trade. Kilgore said the Treasury Department's ruling could cause Cuban officials to shop elsewhere for agricultural products.
"History has proven that embargos don't work," Kilgore said. "This ruling doesn't reflect the intent that Congress had when it passed the law in 2000 allowing Cuba to purchase food and medical supplies. To date, Cuba hasn't defaulted on a single payment. But, this does send a message to Cuban officials that the U.S. is placing additional barriers regarding trade with their country."
Kilgore said under the new ruling, Cubans could still purchase American-grown foods, but they would go through another buyer to get it.
In 2000, Congress passed a law allowing cash sales of agricultural items and medical supplies to Cuba -- changing the effects of a 40-year-old trade embargo with the communist country.
In recent years, shipments of Alabama agricultural items such as poultry, soybeans and timber have risen dramatically. From 2003 to 2004, for example, Alabama increased its poultry business there 54 percent to $57.1 million. While all sales transactions have been on a cash basis, at issue now is when the money actually changes hands.
Prior to last week's ruling, exporters could ship their products to Havana Bay, with the physical turnover of the merchandise coming after a third-country bank transferred funds to a U.S. bank. Last week's ruling, which is set to go into effect in 30 days, states that payment of cash must be before shipment.
Following the trip to Cuba in December, Sparks announced that trade negotiations between Alabama agribusiness leaders and Cuban trade officials have resulted in approximately $18 million in additional contracts for Alabama products.
Agreements were made to purchase nearly $9 million in poultry products and over $10 million in transmission poles--with negotiations ongoing for additional lumber sales--plus several containers of snack foods.