NATE JENKINS / Lincoln Journal Star | Posted: Monday, August 15, 2005 7:00 pm
A Nebraska trade group led by Gov. Dave Heineman struck gold in Cuba on Tuesday, penning what may be the largest deal of its kind since U.S. states resumed some trading with the communist country five years ago.
Cuban officials agreed to buy $17 million in Nebraska agriculture products, including corn, wheat, soybeans and beef, over the next 18 months.
"This is truly a historic day for Nebraska agriculture," Heineman said via telephone from Cuba. He was the fifth governor to visit Cuba since a 40-year-old trade embargo against the country was loosened in 2000 to allow for the trade of food and medicine.
The 10-member delegation planned to return from Cuba today. Heineman won't stay long before flying back to the island country some have criticized him for visiting.
He plans to return in November with hopes of finalizing sales of 25,000 tons of wheat, the same amount of corn, and possibly 15,000 tons of soybeans or soy meal.
The $17 million represents commitments, but not a guarantee, of future Cuban purchases. Just one actual sales contract was signed in Havana that for 5,000 tons of edible Great Northern beans. Three members of the delegation are bean producers, and the commodity was expected to be the focus of the trip.
Members of the delegation would not disclose the purchase price of the beans, but Lincoln radio station KFOR, which sent a reporter with the Cuba delegation, reported the bean sale was worth $2.5 million.
The 5,000 tons represents about 10 percent of the total amount of Great Northern beans annually produced in Nebraska, according to Chuck Hibberd of the University of Nebraska Panhandle Research and Extension Center.
Nebraska was the top producer of Great Northern beans last year. Faced with more competition from other countries that have begun producing beans, Nebraska bean growers have been shopping for another customer.
"This purchase signals we're back on track," Hibberd said.
The 25,000 tons each of corn and wheat that could be sold to Cuba in coming months represent a small percentage of the total amount of each annually produced in the state. But ag representatives said the importance of reaching a new market shouldn't be understated.
"It's been a great day for Nebraska agriculture," said Mark Jagels of the Nebraska Corn Board and member of the delegation.
Republican U.S. Sen. Chuck Hagel, who in 2000 co-sponsored legislation that opened the door for U.S. exports of food and medicine to Cuba, said the agreement reached by the team "exceeded expectations." Democratic Sen. Ben Nelson coined the deal a "win-win-win" for the state, benefiting ag producers, the economy and the future of ag trade in the state.
Trade talks began as soon as the Nebraska group was off the plane in Havana, said Greg Ibach, director of the Nebraska Department of Agriculture, and negotiations lasted late into the night Monday.
The $17 million deal with Alimport, the purchasing arm of the Cuban government, was finalized Tuesday morning.
An expert on U.S.-Cuba trade said that before the Nebraska agreement, Louisiana's $15 million deal with the country reached earlier this year was the largest.
John Kavulich, senior policy adviser for the U.S.-Cuba Trade and Economic Council, said the $17-million bar set by the Nebraska delegation may have political underpinnings. The Cuban government, he said, recognizes that the political costs of visits there are rising because of increasing friction between the two countries. That's caused by a variety of factors, including Cuba's ties with countries including Venezuela and actions by the administration of President Bush.
A U.S. Defense Department official, for example, said last month Cuba and Venezuela are working together to install leftist governments throughout Latin America.
Bigger deals, therefore, are needed to "mitigate the unpleasantness" experienced by government officials who visit Cuba, Kavulich said.
The chances Cuba will finalize orders for $17 million in Nebraska products over the next 18 months?
"The Cuban government generally has fulfilled the terms of their commitments," Kavulich said, "however, there more often than not have been extensions given and there has been prodding required by state officials to remind the Cubans of their commitments."
Reach Nate Jenkins at 473-7223 or njenkins@journalstar.com.