Cuba is more than mojitos and motors

 

Jennifer M. Latzke, High Plains Journal

 

Editor's Note

High Plains Journal Associate Editor Jennifer M. Latzke was a member of a select group of American Agricultural Editors Association members who traveled to Cuba, Sept. 19 to 23, on the first-ever AAEA Communicators Learning Mission to Cuba. The members traveled under journalist visas, with the permission of the Cuban and American governments, with a goal to explore Cuban agriculture production, the food industry in the country and meet with Cuban government officials and agricultural experts.

 

The first thing that might come to some people’s minds when they think about Cuba is the classic automobiles the nation is famous for keeping running despite an embargo. For others, it might be a cocktail, the mojito, made with muddled mint and the sugar and rum that helped to put Cuba on the European trade map.

 

But today, Cuba is looking past motors and mojitos to its future and the potential for further thawing of Cuban-American relations.

 

“Cuba is more than mojitos,” said Jorge Mario Sanchez Egozcue, professor in the Centro de Investigaciones de la Economia Internacional at the Universidad de la Habana. And if you think you understand almost for sure the Cuban economy, you’re wrong, the Cuban economics professor added with a smile as he spoke to the small group of American Agricultural Editors Association members in Havana, Cuba.

 

The select group of AAEA members traveled to Cuba Sept. 19 to 23 on the first-ever AAEA Communicators Learning Mission to Cuba. The journalists represented a wide array of livestock and crop interests as well as regions around the country. They traveled under journalist visas with the permission of the Cuban and American governments and a goal to explore Cuban agriculture production, the food industry in the country and meet with Cuban government officials and agricultural experts. Members looked into how United States agricultural interests might play a role in expanding Cuba’s domestic food production, as well as the potential for expanding agricultural commodity and food trade between the two countries.

 

From Day One, as the journalists flew into Terminal 2 of Jose Marti International Airport the group saw firsthand the booming trade in foreign remittances. Since 2009, Cuban-Americans could send unlimited amounts of money and bring consumer goods to their family members in Cuba. Then, in 2015, the limits for Americans without a family connection were raised to about $8,000 per year. The amount of remittances in both cash and goods is difficult to pin down because a lot of it comes into Cuba as checked bags by family members visiting the country, but the Havana Consulting Group estimated the total in 2015 was over $3.3 billion. The U.S. State Department figures it to be about $2 billion to $3.4 billion a year.

 

At the baggage claim, the group saw shrink-wrapped flat-screen televisions, bicycles and even construction materials and other merchandise among the suitcases waiting to be picked up by travelers. Foreign remittances are estimated to be the largest source of cash in the Cuban economy. With more and more Cubans becoming licensed “entrepreneurs,” or “cuentapropistas,” by the government, these remittances are helping families start their own businesses.

 

The group visited one such entrepreneurial enterprise, “Artecorte Estilista,” or “Art, Cut and Style,” which is a barbershop in “Hairdressers Alley” in Old Havana run by Gilberto Valladares. His entrepreneurial spirit led him not only to open a barbershop, but also to use a portion of his proceeds to help his community, especially disadvantaged young people.

 

It’s a way of doing business somewhere between capitalism and Cuban socialism, where people are allowed to make profits with a hand up from the government. Valladares takes it a step farther, by plowing money back into other businesses in his community, as well as the barber school he set up for young people with disabilities who might not be able to find a career any other way. For example, the class he was currently teaching included deaf youth.

 

“I help people and they help me, so we all see a benefit,” Valladares explained. “The sun rises for everybody.” With small entrepreneurial businesses like restaurants and shops and service providers, the community is able to invest more capital into building improvements and renovations.

 

As the group toured the rest of Old Havana and learned more about the history and founding of Cuba, it was plain to see tourism is replacing sugar as the nation’s economic driver. Following the fall of the Soviet Union, Cuba found itself overnight in a situation where it lost 92 percent of its energy supplies and all of its fertilizer and chemical imports as well as 70 percent of imported spare parts and materials, Sanchez Egozcue explained. This shock affected an entire generation of Cubans who had grown up in a socialist bubble where they automatically had a market for their production, he explained, and pushed them to learn to compete in an aggressive global environment.

 

The country needed to undergo economic reforms and the first wave of these was to open up the nation to foreign investment, expand ownership in agricultural cooperatives and expand private business in the cities. “We went from a sugar economy to a service economy,” he said.

 

The emphasis on tourism as an economic driver was seen in the amount of construction and renovation of historic buildings in Old Havana, and the service industry that’s sprung up to cater to tourists. From new restaurants opened by entrepreneurs to renovations of architectural wonders and from souvenir sellers to tour companies, the tourism industry is growing. And it is controversial to some Cubans, who worry Cuba will be seen as yet another island getaway for spring breakers.

 

Bringing more and more tourists into the country comes at a cost. Of the food consumed in Cuba, 70 percent is imported. And, while the U.S. has an advantage in freight costs and turnaround time, the current embargo/blockade presents a range of problems to anyone wanting to import food from America.

 

The matter of reopening trade between the two nations isn’t something that can happen overnight. U.S. Secretary of Agriculture Tom Vilsack did sign a memorandum of understanding with Cuban Minister of Agriculture Gustavo Rodriguez Rollero in November 2015. However, that is just the first step of many toward reforming trade relations.

 

The group learned government officials from both countries are currently debating a “technical cooperative agreement” that will set the rules of engagement, the parameters for education and trading of technical expertise. Without this agreement in place, there is a limit to the activities the U.S. Foreign Ag Service can do in the country.

 

So, for example, if the U.S. wanted to host a seminar educating Cuban farmers about techniques for desalinization of land, that would be a “knowledge transfer” and not allowed without this technical agreement in place.

 

Time and time again the group heard from ag industry officials and leaders in Cuba about how the “blockade” affects their country’s daily activities. (Cubans use the term “blockade” while Americans use the term “embargo.”) Currently, Cubans can purchase agricultural and medical goods from the U.S. under certain conditions, and first and foremost is they pay cash up front before any good leaves the dock. The group learned from Cuban trade experts the country has a problem keeping hard currency on hand and that credit extension is vital to the country’s ability to import food. That’s something that by law the U.S. cannot extend under the terms of the embargo/blockade.

 

When talking with the Ministerio de la Agricultura —the Ministry of Agriculture— Director of International Affairs Moraima Cespedes Morales explained that while the MOU between the USDA and the Cuban Ministry of Ag is signed, opening up trade or dropping the embargo/blockade isn’t just a matter of cutting a ribbon.

 

The two countries must first establish the situation as it stands on the ground in regard to Cuban infrastructure and production capabilities; sanitary/phytosanitary considerations; organic certification regulations; extension of credit for goods; demand for commodities; transfer of technology and information; and more. And there are quite a few political hurdles in both countries to overcome in fully dropping the embargo/blockade.

 

But the conversations are occurring and progress is happening, if slowly. With a USDA Foreign Ag Service Officer stationed at the U.S. Embassy in Havana, U.S. farmers and livestock growers have a presence to ask the questions they would ask, and they can reach out and establish relationships within the complex agricultural and food sectors as if they were there themselves.

 

 

Cubanálisis - El Think-Tank

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