A group of Illinois soybean farmers recently traveled to Cuba, where they saw with their own eyes how much business they’re losing because of the U.S. trade embargo.
In Havana, they met with officials of Cuban state food agency Alim-port to gauge the island’s current demand for soy-based products.

The high-profile group included Bill Wykes, chairman of the Illinois Soybean Association; Craig Ratajczyk, the association’s CEO, and Mark Sprague, its director.

“Although agricultural products are exempt from the embargo, we are losing significant market share on our soy exports to Cuba because of restrictions the U.S. imposes on financial transactions with Cuba,” Wykes said in a press statement upon his return.

In 2006 only five years after the embargo was loosened to allow U.S. food exports to the island the United States had become the main source of soymeal and soybean oil for Cuba. Exports to Cuba that year came to 164,390 metric tons of soymeal worth $26.6 million and 35,673 tons of soybean oil worth $20.9 million, according to the U.S. Commerce Department.

By 2011, Cuban imports had taken a dramatic turn, with the United States exporting just $9.8 million (25,299 tons) of soymean but no soybean oil into Cuba. Meanwhile, Brazil had exported 264,634 tons of soymeal worth $112.5 million, and 82,596 tons of soybean oil worth $100.4 million to the island.

“More tourism and prosperity for Cuba will likely lead to greater demand for soybeans and products,” said Wykes. “Illinois is well positioned to be Cuba’s best supplier, given our logistical advantages and a commitment to quality. We don’t want to lose the opportunity.”

Another trade group, the Missouri-based American Soybean Association, said Brazilian soymeal and oil suppliers are outselling their U.S. rivals in Cuba because Alimport has been able to buy on credit.

Doug Winter, another Illinois soybean farmer who previously visited Cuba, said the fact Brazil can offer Cuba a 60-day line of credit on farm purchases knocks U.S. growers out of the competition. “Pre-paying for ag products can really put a business in a difficult cash-flow situation,” Winter told the trade publication FarmProgress.com.

For this reason, ASA is urging Washington to lift agricultural trade, financial and travel restrictions for Cuba and make it eligible for agribusiness-friendly initiatives like the Foreign Market Development (FMD), Market Access Programs (MAP) and the U.S. Export Credit Guarantee program (GSM). Illinois lawmakers such as State Rep. Jack Franks (D-Marengo) are among those also supporting agricultural credits for Cuba.

Yet most observers say it’s unlikely to happen anytime soon, even though other farm-belt states have long urged Washington to allow such trade financing, in order to generate food exports to Cuba.

“Until the U.S. government frees up banking with Cuba, it’s a no-go,” said Marvin Lehrer, senior advisor on Cuba for the USA Rice Federation. He told CubaNews that along with programs containing direct U.S. funding, GSM is a bank-to-bank program, where 3rd-country banks that process Cuba’s agricultural purchases would need to provide financing. But because of Cuba’s dubious credit record, especially with Western Europe, Lehrer dismisses this possibility.

“They end up holding the stick,” he said. Lehrer mentioned the risk that such banks would be taking in extending credit to Cuba, adding that the Obama administration feels it has already done enough with Cuba diplomatically.

“Everybody is waiting for Cuba to change,” Lehrer told CubaNews.