Roundup: Cuban agriculture suffers huge economic losses due to U.S. embargo

Source: Xinhua| 2018-10-19 06:47:28|Editor: Mu Xuequan
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by Raimundo Urrechaga

HAVANA, Oct. 18 (Xinhua) -- Every year Cuba seeks to increase agricultural production in order to reduce imports, ensure greater food security for its people and generate more income from exports like tropical fruits and world famous cigars.

However, the economic blockade imposed unilaterally by the United States since the 1960s has caused millions of dollars in losses to this sector.

The economic hit usually occurs due to incomes lost from exports of goods and services, geographical relocation of exports, additional banking transactions and lack of access to top-notch technology.

"Between April 2017 and March of this year, the sector registered an impact of 294.1 million dollars, mainly on the export of premium cigars, homeopathic and alternative health products as well as tropical fruits," said Leonardo Perez, director of international relations at Cuba's Ministry of Agriculture (MINAG).

Perez stated the greatest economic damage for the sector is having no access to the U.S. market to sell the famous hand-rolled Cuban cigars.

In that context, Juan Rico, business director of Tabacuba, a local company responsible for the production of the aromatic leaf, said that if the island could access the U.S. market, around 50 million units can be sold in the first year.

"Taking into account the average export prices in 2017 of Habanos S.A., a Cuban-Spanish entity that sells the famous cigars worldwide, we lost close to 134 million dollars last year due to the U.S. blockade as we couldn't sell the product in that market," he added.

Rico also indicated that export sales of Cuban machine rolled cigars last year totaled 120.5 million units, with the exception of the United States.

"Selling an additional 100 million of these cigars in the U.S. market, at an average price of 145 dollars per 1,000 units, would have meant an income of 14.5 million dollars we didn't receive due to the embargo policy," he asserted.

Added to all these figures, said the Cuban official, an additional 11.5 million dollars were lost due to currency exchanges, supplementary bank transactions and the geographic relocation of goods by sending products to far away markets.

According to Rico, Tabacuba is forced to transfer its exports in Kingston, Jamaica, because of the embargo's extraterritorial policies which prevent many shipping companies from entering Cuban ports.

"This measure obviously increases the cost of freight charges and products take longer time to reach its final destination," he said.

The MINAG official also stated the island's livestock, fruit processing and agroforestry industries also suffer losses, both to their productions and restrictions on their exports.

Close to 51 million dollars were lost for various restrictions in these areas last year, emphasized the Cuban official in a recent exchange with local and foreign press.

Perez said distinct Cuban products such as honey, coffee, charcoal, cocoa and others are banned from the U.S. market due to the blockade and the island has to sell them in Europe and Asia, generating less profits and higher costs.

"If we could sell in the U.S. our sales volumes would be bigger," he added.

The Cuban official said despite efforts within the U.S. Congress to eliminate the blockade, the nearly six-decade old policy still limits the country's possibilities of achieving sustainable development, particularly in agriculture.

Precisely the agricultural and food sector in the U.S. has made constant calls to put an end to the embargo amid the serious setback in bilateral ties after the Trump administration came to power.

Currently, a legislative initiative within the House of Representatives is under review, supported by a bipartisan group of lawmakers, which seeks to adjust the actual policy in sales of U.S. of agricultural products to Cuba.

Humanitarian exceptions for food and medicine allow for some U.S. sales to Cuba, but cash-in-advance payment rules limit those sales.

U.S. trade with Cuba totaled 711 million dollars in 2008, but it shrank to 186 million in 2015, and rose to 291 million in 2017 under Cuban normalization policies put in place by former U.S. President Barack Obama, according to official figures by the U.S. Department of Agriculture (USDA).

Havana imports about 80 percent of the food consumed in the Caribbean nation and spends more than 2 billion dollars a year for that, a figure that local authorities say could be reduced if the island had access to the U.S. market.