The Miami Herald
Mar. 05, 2002

Cuba to buy $17 million in grain from U.S. company

                      BY TIM JOHNSON

                      WASHINGTON -- Cuba is throwing more business to U.S. farmers eager to encourage efforts on Capitol Hill to
                      loosen further the trade embargo of the island.

                      The government of President Fidel Castro is ordering $17 million in grain from Archer Daniels Midland Co. (ADM),
                      a Decatur, Ill.-based grain conglomerate.

                      The purchase comes on top of $36 million Cuba spent last year for U.S. farm goods.

                      Other deals worth $14 million to $15 million more are in the works, industry sources say.

                      The first round of Cuban purchases, which followed last year's severe hurricane damage to the island's
                      agriculture belt, were the first commercial transactions with U.S. companies since 1963. Cuba asserted that the
                      ''one-time'' cash deals would never be repeated.

                      ''This is one of a string of many purchases the Cubans will likely buy,'' said Audrae Erickson, international trade
                      policy specialist with the American Farm Bureau Federation.

                      Cuba wants to expand U.S. imports to include nonfat dry milk and fresh apples, most likely from Washington
                      state, which has yet to benefit from the sales, Erickson said.

                      The new purchases mark a shift by Castro, who at one point last year pledged not to buy ''one grain of rice'' from
                      U.S. companies unless Washington extended credit for the purchases. After Hurricane Michelle steamrolled across
                      Cuba in November, Cuba portrayed its purchases as part of an unusual humanitarian relief effort.

                      RESTRICTIONS STAND

                      A sweeping U.S. trade embargo remains in effect against Cuba, although Congress approved medical sales to the
                      island in 1998 and agricultural sales in late 2000, as long as no U.S. entity is involved in granting credit. Most U.S.
                      travel to the island is also banned.

                      ''It's a dramatic change of policy,'' said Dennis K. Hays, executive vice president of the Cuban American National
                      Foundation, an anti-Castro group. 'To go from `not a single grain of rice,' to a 'one-time' purchase, to new cash
                      purchases, means the well has run dry everywhere else.''

                      Cuba's economy is stagnant, hurt by a fall-off in tourism and a decline in the price of nickel, a major Cuban
                      export. Other agricultural markets are increasingly irked by Cuba's arrears. The nation owes hundreds of millions
                      of dollars to creditors for agricultural imports.

                      At least eight U.S. companies will take part in the second round of purchases by Cuba, said John Kavulich,
                      president of the U.S.-Cuba Trade and Economic Council, a New York-based group. Of the eight companies, only
                      ADM has announced publicly to date.

                      ''There is no humanitarian component [to the new sales],'' Kavulich said.

                      Archer Daniels says it will sell 135,000 metric tons of corn, wheat, rice and soybeans to the island to be shipped
                      by June.

                      ''We were somewhat surprised that this is a larger deal than the first time,'' said Karla Miller, vice president of
                      public affairs for Archer Daniels. ''We're looking forward to more deals in the future.'' ADM was one of 13 U.S.
                      companies that took part in the post-Hurricane Michelle sales to the island, realizing about $14 million in sales.

                      Miller said Cuban authorities have told her company that they are pleased with moves on Capitol Hill to relax
                      restrictions that bar U.S. companies from offering credit to Cuba for future purchases.

                      ''They've told us that one good turn deserves another,'' she said.

                      ISLAND VISITS

                      A steady trickle of U.S. legislators and their staff members have flown to Havana so far this year, a sign of
                      persistent interest in the troubled U.S.-Cuba relationship.

                      Pro-embargo forces lament that the White House has been largely silent on efforts by farm state legislators to
                      loosen rules on U.S. sales of foodstuffs to Cuba.

                      A Senate version of a key pending farm bill allows U.S. companies to offer credit to Cuba for agricultural sales,
                      while a House version does not. A conference committee of House and Senate legislators will soon hash out the
                      differences.

                      FARM INTERESTS

                      ''If you see the list of Senate conferees, except for (North Carolina Republican Sen. Jesse) Helms, they are all
                      from farm states,'' Hays said.

                      Cuba imports about $600 million of foodstuffs a year, a relatively small market. But U.S. agri-industry has been
                      hurt by worldwide recession and is eager to get a foothold in any market possible, especially one as close as
                      Cuba.

                      ''Hopefully, Cuba is turning into a long-term customer,'' said Bob Cummings, vice president of international policy
                      for the USA Rice Federation.