Testimony of Charles Fleming
Marketing Coordinator
North Dakota Department of Agriculture
SCR 4007
Senate Government and Veterans Affairs Committee
Missouri River Room
January 31, 2003

Chairman Krebsbach and members of the Government and Veterans Affairs Committee. I am Chuck Fleming, Marketing Coordinator for the North Dakota Department of Agriculture and I am here today on behalf of Agriculture Commissioner Roger Johnson in support of Senate Concurrent Resolution 4007.

Commissioner Johnson is in Washington DC today attending the winter meeting of the National Association of State Departments of Agriculture (NASDA). At that meeting he is offering a policy statement for that group to consider which has the same objective as the resolution that is before you. A copy of that policy statement is attached to my testimony.

The US Trade policy towards 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 placed 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 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, Commissioner Johnson 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.

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 great opportunity.

The current policy of "cash only" sales at first blush may seem to be in our best interests. However, there are some negatives involved. It becomes an inefficient system because that means sales will be small and our suppliers in North Dakota can not sign long term contracts. Additional inefficiencies occur because our transportation costs are higher than if we had normal relations because there is no backhaul. All of this forces Cuba to put the squeeze on our companies on pricing, and it becomes difficult to compete with other countries.

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.

The Commissioner recognizes 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. He believes that can be done, and we must be vigilant as those issues are discussed.

Commissioner Johnson recognizes 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.

I urge the adoption of the resolution.

I would be happy to respond to any questions.