Milk producers would be happy to abide. Others would as well. We are a whole lot closer. Potatoes and beans and a whole range of things are available. Apples seem to be a delicacy at christmas time. I said, we can give you christmas every day. We have a lot of opportunities. Let me ask undersecretary scuse. There is an expression that says, the first step to achieving success is showing up. I think that is really true on trade. Also, our ability to market. You mentioned the Market Access program and the other tools at the department of agriculture. I wonder if you might speak more to what how would you envision the usdas programs going forward, creating opportunities and tools for american agriculture . Mr. Scuse again, if we were allowed to use our Marketing Programs, such as our Market Access program, it is an area where we work with operators to go in, to do the trade missions, to look at ways to develop markets and what the actual needs are through the market assistance program. Help our producers, helped the commodity groups make inroads into establishing markets in that country. The Development Program was where we worked with cooperators to do studies on what the demands are for different products. If we were allowed to use these products as well as do a trade mission to cuba, i think it would go a long way in getting back much of the market that we have lost in the past. The lack of the ability to use these programs as well as our inability to extend credit is the main issue why weve lost market share since 2008. The economists at the university of florida did a study, and what their study showed was that the biggest loss, the reason for the most loss in our market share was our inability to extend credit, as our competitors are doing. The Playing Field right now is not level. A level Playing Field, they are going to buy the best products from the United States. Sen. Stabenow we heard that over and over again when i spoke to the minister of agriculture in cuba. We heard the same thing with the foreign minister, talking about the lack of credit. When we look at how we get through that, i wonder if anyone wants to comment further on the specifics of what we need to do to make sure that process is open. The president has taken the first step, taking out the intermediary, being able to allow payment when it is in process and arrives. But we all know that the issue of credit opportunities, other credit opportunities, is a serious issue for us. What do we need to do . Is this all about lifting the embargo completely, or are there other things we should be doing . Mr. Smith i could start out. At least one provision that is at issue is the statute that prohibits any financing of goods to go to cuba other than third country financing or payment by cash in advance. We are not allowed to offer any payment deals other than going through a third country to receive that financing, or to pay the cuban importer in advance of the goods being turned over. I think that is what my colleague has indicated is necessary to be able to extend credit. We would need to remove that prohibition. Mr. Borman i would also add clarity on the provision that appears to require individual license for any ag export to cuba, to change that, or make it clear that we could facilitate ag exports to cuba. Sen. Stabenow and undersecretary scuse, is that those two things specifically, or is there anything from the usda standpoint that we need to be changing to create opportunities . Mr. Scuse i think those are the biggest changes that we need to have made so that we could use our marketing money, as well as the commodity groups. They are not allowed to use their checkoff funds in cuba either. Those changes would allow us to do marketing in cuba as well as give us the ability to extend credit, to put us on a level Playing Field with our competitors. Sen. Stabenow thank you. Mr. Chairman, theres a hearing going on. Im going over there for a moment, and then i will come back. Be on your best behavior. Sen. Roberts i will try to do that. I would urge you to do the same on behalf of the fair trade bill. Senator goes in. Thank you, mr. Chairman. Thank you all for holding this important hearing. I believe that the way to change the world is through personal relationships. If you are serious about bringing change to cuba, we need to expose the cuban people to america. We are not only trading our products, we are trading our democratic ideals. Cuba represents a remarkable opportunity for cubans to gain access to safe affordable, and highquality Agricultural Products from the United States. Im encouraged by recent steps to reform the relationship. Boosting our commercial ties would have significant benefits for our economies. Easing finance and travel restrictions will result in an increase of over 35 million in agricultural exports from arkansas annually. Mr. Scuse, lets talk again about what percentage of the food that cuba consumes is actually grown in cuba. Mr. Scuse according to the world food program, 80 of their food is imported. Sen. Boozman and what countries you mentioned vietnam. Mr. Scuse vietnam is supplying half their rice. Corn is coming from brazil and argentina. Wheat is coming from the European Union and canada. Our sales, currently 50 of our sales are poultry. 25 of our sales are soybean meal and soybeans. That makes up three quarters of the sales from the United States. Sen. Boozman what about the quality of a vietnam rice compared to american rice . Mr. Scuse senator im partial to u. S. Products. I said earlier, i think our farmers and ranchers produce the best products in the world. Im going to stick to that. Sen. Roberts said very well. Sen. Boozman exactly. I think that is important in the sense that it is not only an opportunity, but it is an opportunity for the cuban people. Mr. Smith, youve talked about easing financing and things like that. Out of the things we are doing what is the most important thing we need to be doing . Mr. Smith i think when you started out you talked about travel between the American People and cubans. I think that is right. As the president said, the best ambassadors for america can be ordinary americans going to travel and embodying our ideals. I think we have authorized travel within the 12 categories that weve had. Congress has prohibited any further opening for tourist travel. We also have a statutory prohibition with respect to private assistance to cuba for exports, but also for u. S. Government exports. Sen. Boozman do you agree with that mr. Borman . Mr. Borman i certainly do. Theres also a prohibition on u. S. Government export promotion for trade with cubans. That limits the commerce departments ability to carry out the work that it does in virtually every other country. Sen. Boozman even with the changes weve made, is it fair to say that the majority of restrictions regarding trade are still in place . Mr. Smith it is true that most other transactions remain prohibited. Sen. Boozman so weve got a good step in the right direction but weve got a long way to go. Weve talked about financing. Are you aware of any other countries that go through the financing scheme that americans go through . Mr. Borman im not aware of any other country that has those type of restrictions. We do trade in approximately 200 countries around the world. Sen. Boozman so america is unique in that regard. In dealing with the cubans, how does cuba differ from other major export markets, in terms of how normal commercial operations work . Mr. Scuse as i pointed out earlier, we are restricted to dealing with one state owned corporation, alimport for access for our u. S. Products. That is unique. It does present its own problems. Sen. Boozman mr. Borman. Mr. Borman my understanding as that for virtually all imports they have to go through some import agency. Mr. Smith the other difference is the financing terms. In most other contexts, the exporter could get financing of some kind from the u. S. Or the importer. Sen. Boozman thank you, mr. Chairman, and thank you all for being here. Sen. Roberts senator donnelly. Sen. Donnelly thank you. Im a big supporter of increasing exports to our markets and im intrigued to the possibility of opening the cuban market. The concern is, i want to make sure that the cuban people actually benefit from it. What can we do from a policy perspective to better ensure that the benefits of trade reach the cuban people, as opposed to all the products going into one agency and then being divvied out . What do you see as the keys to making sure the cuban people benefit from this . Mr. Scuse senator, i think that by normalizing relations, by breaking down the restrictions we have, the cuban people are going to benefit from that right away. If you look at the cost of transportation rice coming from vietnam, corn coming from argentina, wheat coming from the European Union, we have a tremendous advantage in logistics and being able to supply them topquality products at what i would believe would be a more reasonable price than what they are currently paying for shipping from those countries. I would think there would be an immediate benefit. Could there be additional benefits if we are treated like other countries and dont have the go through one state owned corporation for our products, which i hope would happen i think there would be additional benefits. Sen. Donnelly one of my concerns is going through alimport, the state agency. We talk about the higher quality. I have been to my friend senator boozmans home state. The products produced in my home state and all of us, we talk about the benefits of lower price, easier transportation. The question is, how do we make sure that lower price gets passed on, so the cuban people are not paying the same, and this group who will set it, in effect . Mr. Scuse i understand the concerns. Hopefully, once relations are normalized and trade is liberalized, i would hope that we would be treated like the other countries that are currently trading with cuba, so they dont have to go through one state owned corporation. Sen. Donnelly and this would be for any of you. What canadian products are sent to cuba, how are they entered into the country . Who are they distributed through . Do you know . Do they have to go through alimport . Mr. Scuse to the best of my knowledge, no. Sen. Donnelly one of the points i would like to make is, as you move forward with this, one of my concerns is that we be treated the same as everybody else. That is the way the cuban people benefit, that our products are able to go directly to the cuban people, that we are treated the same and much of what we look at as we move forward will be dependent on that being incorporated into any agreement that comes through. Thank you, mr. Chairman. Sen. Roberts senator hoven. Sen. Hoven thank you. I want to pick up on a point that senator donnelly is making. There has to be a carrot and a stick to what we are doing here. We want to expand trade. That is good for our farmers. At the same time, we want to put more pressure on the cuban government to change its policies on human rights. What can we do as we work on trade to make sure that we are doing that . How do we get these products down to the Small Businesses and the entrepreneurs that are trying to make something happen in terms of Free Enterprise in cuba . And how do we create some pressure on the cuban government, on the castro regime, to change in regard to human rights . Senators mr. Scuse senators, you well know agriculture throughout history has been a way to break down some of the barriers that we have faced. If we can open up trade for cuba and because they are only supplying 20 of what they currently consume, but the demand is there there is a way to help build the Agricultural Sector in the country, which would create jobs, income, more demand. As that happens, i think you are going to see an awareness. Just opening the country and normalizing relations, there will be an awareness of the people that i dont believe currently exists. I think this is a really good first step to helping the cuban people. Our policies over the last 50 years have not been one that has provided that openness, that transparency, and the education about the United States that i think normalizing relations and opening trade well. Sen. Hoeven mr. Borman, you and i talked about how to make sure these restaurants and other Small Businesses that people in cuba are trying to get going how do we support that effort . Mr. Borman several ways. One is, the folks who make the exports from the United States know who they are intended for and they know those individuals because they are often relatives. If the items dont get to them, they will hear about that. We have a good working relationship with a lot of the exporters to make sure the items go way they are supposed to go. Sen. Hoeven now you are starting to help people, entrepreneurs, the kind of things that hopefully will create some pressure for a change. Do you have a way to enforce that . If we have products going in there, to make sure they are getting to these Small Businesses . The other thing is payment. How are you going to make sure that people get paid for products they ship into that market . Mr. Borman so far, we have not heard any complaints of u. S. Exporters not getting paid. Sen. Hoeven thats because the old policy was cash in advance. Mr. Borman it is still cash on delivery. Sen. Hoeven cash when you change title. The product is delivered. It is there. Which limits your ability to go get it. Mr. Borman if that happens, we will find out quickly. Sen. Hoeven getting it to those Small Businesses, how do you enforce that . Mr. Borman we make sure that the folks who want to make exports understand who the Small Businesses are. Two, the cuban people are very aware of these changes. If they dont see changes, that is going to create more pressure on the government internally. We have seen exports in the private sector. We have seen that in the trade data. Mr. Smith i think we can continue to focus on the cuban people. The changes we made were focused on the ability of the cuban people and the strength of the cuban people. We increased their ability for communications internet, other things. We also increased the limits on remittances, the financial amounts that u. S. Citizens can give to cubans. We increased amounts for other things that would help Agricultural Development as well. Those were very much focused on the individual cubans, the small Cuban Development businesses that might want to grow. That was the focus for our change. Sen. Hoeven i think it is important that you are focused on that area, including putting information into that market every way you can. Provide people with more information. I think that also helps with their efforts to force change from the inside. Final question for mr. Scuse what Food Products do you see as Opportunity Areas . You said three fourths of our exports now our poultry and soybeans. Mr. Scuse i think weve got a great opportunity to increase our exports of corn. Theres no reason why the European Union and canada have the wheat market. That should also be ours. I think theres a great opportunity to have the rice business in cuba. As i pointed out earlier in this meeting, theres a great opportunity for dairy. Sen. Hoeven thank you. Sen. Roberts i thank the senator and thank the panel for responding. Thank you, mr. Chairman. Weve asked you three or four times about alimport. Yall said you hope that will see this restriction lifted. I can remind you, hope is not a strategy. We are hopeful that you will take the concern that is being expressed today about alimport back to your smaller groups as you discuss opportunities going forward. We have long been concerned about the extension of credit for ag transactions and trade. Hopefully, tomorrow, we are going to take a move in the right direction. I think you have highlighted the number one thing we think we can deal with, which is 908. I support lifting the embargo entirely. That may be a bridge too far for this congress. So weve got to take these baby steps. I have a couple specific questions for you undersecretary. The federal checkoff dollars have not been used for promotion of trade with cuba. The assumption is that this is due to the language of psra, which precludes the use of the United States assistance. The checkoff dollars are not taxpayer dollars. They are producer dollars. The Checkoff Program is set so that farmers elect a board who decides how those dollars are used. It is not tax money. As a result, usda recognizes the difference between your government assistance programs and producerraised and controlled checkoff funds, and can producers utilize their own checkoff dollars for promotion for activities in cuba . If not, why not . Mr. Scuse my understanding is that the federal checkoff funds cannot be used for trade promotion in cuba. Sen. Heitkamp im asking why. Mr. Scuse my understanding is, because the current law that is in place. Sen. Heitkamp maybe the current law is being broadly interpreted and you might want to go back and take a look to see if we can make that change without legislative changes. Mr. Scuse ok. We will do that. It is my understanding that if there is state checkoff money that can be treated differently. But the federal checkoff money cannot be used. Again, we will go back and look at what the law says and if it can be used. Sen. Heitkamp i think just to reexamine that policy. Mr. Smith, i want to go back to the cash in advance, the original definition, and the other changes you are making to facilitate a more efficient and affordable exports to cuba. Do you feel like the administration has gone as far as legally possible in terms of the definition, to open up opportunities . Were there other things on the table that as you discussed the changes that you did make that you said maybe we cant do that . Are there other policy things that were abandoned that we should reexamine . Mr. Smith in terms of the restrictions on financing, the definition we used had