Testimony of Roger Johnson
Agriculture Commissioner
North Dakota Department of Agriculture
HCR 3019
House Government and Veterans Affairs Committee
Fort Union Room
February 13, 2003

Chairman Klein and members of the Government and Veterans Affairs Committee, I am Agriculture Commissioner Roger Johnson and I am here today in support of House Concurrent Resolution 3019, which relates to trade with Cuba.

The US trade policy toward Cuba is flawed. It is a policy that is not consistent with our country's overall trade policy towards other countries. If it is designed to use food as a weapon, it has failed. Amazingly, the current policy is held in place by the strong support of about 600,000 Cuban Americans living in two counties in south Florida that have been able to influence the President and the Congress. If only our 600,000 + North Dakotans could exert such influence!!!

Current US policy allows for the cash sales of food and medicine to Cuba. Visa and license requirements are burdensome, direct currency exchanges are not possible, and the current system is very inefficient.

North Dakota has been a leader in trading with Cuba. Senator Dorgan has been a leader in Congress in attempting to change policy. Governor Hoeven has visited Cuba and promoted North Dakota food products with Cuban government leaders. Lt. Governor Jack Dalrymple and I participated in the US Food Exposition in Havana in September with ten North Dakota companies. That show has resulted in eight sales thus far.

Changing our trade policy with Cuba is not only in the interest of North Dakota farmers, but farmers nationwide. I proposed policy language at a recent meeting of the National Association of State Departments of Agriculture (NASDA) which urges changes in our trade policy towards Cuba. I am pleased to report that my counterparts from around the country concur with this position and passed the policy language. (A copy of that policy language is attached.)

Sixty percent of Cuba's food imports came from the United States forty years ago. Our goal should be to reach that level again. We can with a change in US policy. North Dakota is fortunate in that we are able to provide products such as dry edible beans and pulse crops that are a staple of the Cuban diet. They are "bargain" protein foods and for a poor country with the huge challenge of feeding their people, it gives us substantial opportunity.

The current policy of "cash only" sales at first blush may seem to be in our best interest. However it is an inefficient system characterized by small sales, the absence of long-term contracts, unnecessarily high transportation costs due to the lack of backhauling, and exchange rate losses. All of this forces Cuba to put the squeeze on our companies on pricing, and it becomes difficult to compete with other countries even though we enjoy natural logistical competitive advantages.

A change in government policy which would lift tourist restrictions would help provide Cuba with more US dollars which would allow them to buy more US products, particularly more value added agricultural products for the food service-hotel trade. Currently our primary market is in the lower cost commodities.

I recognize that when normal trade relations are resumed that it is in our interest to negotiate agreements that do no adversely affect our current industries such as sugar. I believe that can be done, and we must be vigilant as those issues are discussed.

I know that with a population of 11 million people, Cuba is not a huge market. But for some of our "minor" crops in North Dakota, it can be a very significant market. North Dakota has positioned itself to be at the front door should normal trade relations resume. We should be leading the effort in trying to change policy. The passage of this resolution works towards that end.

Mr. Chairman and committee members, I urge the adoption of HCR 3019. I would be happy to respond to any questions at this time.