Expert: U.S. agricultural trade to Cuba could exceed $1 billion

Writer: Blair Fannin, 979-845-2559, b-fannin@tamu.edu

Contact: Dr. Parr Rosson, 979-845-2116, prosson@tamu.edu

COLLEGE STATION – A Texas A&M AgriLife Extension Service economist told members of the U.S. Senate Committee on Agriculture, Nutrition and Forestry that U.S. agricultural exports to Cuba could reach $1.2 billion annually if regulations are relaxed and some trade barriers are lifted.

Dr. Parr Rosson, also Texas A&M University agricultural economics department head, said a more open economy, coupled with less regulation by both governments, strong tourism and remittances, would pave the way for U.S. food and agricultural exports to potentially reach record levels within five years.

“The opportunity for job creation in the U.S. as a result of more open trade with Cuba is substantial,” Rosson said. “Our estimates indicate that U.S. food and agricultural exports to Cuba have the potential to exceed $1 billion annually. These additional exports would support the creation of 6,000 new jobs throughout the U.S. economy, along with another $739 million in business activity nationwide.”

Dr. Parr Rosson, Texas A&M AgriLife Extension Service economist and head of the department of agricultural economics at Texas A&M University. (Texas A&M AgriLife Extension Service photo)

Dr. Parr Rosson, Texas A&M AgriLife Extension Service economist and head of the department of agricultural economics at Texas A&M University. (Texas A&M AgriLife Extension Service photo)

However, Rosson said there are challenges for this to happen.

“First, there needs to be income growth and economic prosperity for Cubans,” he said. “Infrastructure improvement and investment will also be necessary to improve the efficiency of existing supply chains and the creation of new cold chains to handle processed foods. Finally, policies and regulations that facilitate trade, and that are transparent and consistent, are an absolute necessity.”

International visitors to Cuba continue to increase, which also increases demand for food and agricultural products. A study by Rosson and the Center for North American Studies at Texas A&M shows potential increases in U.S. food and agricultural exports to Cuba due to increased travel would add $366 million annually to U.S. exports, creating up to 5,500 new jobs.

Texas stands to benefit from increased exports to Cuba. Rosson said several export items including chicken leg quarters, dry beans, wheat, corn and dairy products produced in Texas have been exported to Cuba. More rice exports are also expected if trade relations are opened further. Cuba’s growing tourism market has also sparked demand for more items such as condiments, snack foods, processed foods, bottled water, beef, wine and spirits.

“These estimates include only the additional spending by new U.S. visitors to Cuba,” he said. “More open trade and less restrictive financial regulation would certainly lead to more rapid growth of our exports and create more jobs for Texans and the U.S. economy.”

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