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Cuba Thaw Favors Ag

The Obama administration's decision to normalize relations with Cuba, which one official called the most significant change in policy toward the country in half a century, includes easier terms for selling food and agricultural equipment to the island nation.

Cuba bought nearly $350 million of U.S. farm exports last year, mostly frozen chicken, corn, soybeans, and soymeal, says the U.S.-Cuba Trade and Economic Council, which monitors binational trade.

U.S. farm groups, who long regarded Cuba as a natural, nearby customer for American-grown food, applauded the move, announced by President Obama today after several months of behind-the-scenes negotiations. The American Farm Bureau Federation said improved relations "will expand access to a market of 11 million customers for U.S. agriculture."

Key for agricultural exports will be revision of a Treasury Department regulation that requires payment in cash before ships leave U.S. harbors and permission for U.S. banks to open correspondent accounts with Cuban banks. The "cash in advance" rule will become "cash before transfer of title" at Cuban ports, said the White House, and the direct relations with Cuban banks will speed transactions. At present, payments must be routed through third-party banks, which takes time and adds to costs.

As part of steps to encourage growth of Cuba's private sector, sales will be allowed of agricultural equipment for small farmers, said the White House.

The incoming chairman of the House Agriculture Committee, Republican Mike Conaway of Texas, said the long-standing trade embargo on Cuba was undermined by "a poorly negotiated deal" that would not bring democracy to Cuba. The National Farmers Union said the embargo, which remains in place, "has made no sense for a long time" and that improved relations "will also open new markets for U.S. farmers."

Cuba was once the largest market for U.S. rice exports and could become a major customer again, said the USA Rice Federation. The National Corn Growers Association said removal of regulatory and financial barriers would boost U.S. competitiveness. The American Soybean Association saw the opportunity to sell U.S. soy products from cooking oil to livestock feed in Cuba.

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