The congressional battle between lawmakers from farming states and Cuban American colleagues on funding food exports to Cuba could be coming to an end thanks to an “elegant” solution that is part of proposed legislation: a 2 percent user fee on agricultural products sold to the island that would be used to compensate those who have certified claims of properties confiscated by the Cuban government.
“We know there are a significant number of Cuban Americans who are aggrieved because they had their properties thieved years ago in the revolution,” said Arkansas Rep. Rick Crawford, the bill’s sponsor. “We have come out with a vehicle by which they actually receive compensation, which is a key component of the legislation.
“Every transaction will have a two percent excise fee that would be collected and administered to certified claimants through the Treasury Department,” he said.
“The 2% user fee functions like an excise tax on the total sale, and it is paid by the seller of the agricultural product,” added a staffer from Crawford’s office.
More than 6,000 certified claims from U.S. companies and citizens are currently worth about $8 billion. However, thousands of Cuban-American claims are not certified.
The bill, which has not yet been submitted, proposes to remove restrictions on the financing of exports of food, dairy products and other agricultural products to Cuba. Under current policy, it is legal to export these products but they can only be paid in cash and it is not possible to offer credit to Havana. The bill, which would only authorize private credit, would be supported by Secretary of Agriculture Sonny Perdue, according to his testimony at a hearing before the House Committee on Agriculture on May 17.
We have come out with a vehicle by which they actually receive compensation, which is a key component of the legislation.
Arkansas Rep. Rick Crawford
The Arkansas representative said he has been working closely with Cuban American members of Congress on the proposed legislation.
“We are trying to keep their perspective in mind and trying to be as respectful to their sensibilities as possible and do something that is meaningful not only for the American farmers but also to Cuban Americans, too, who are obviusly personally involved in this issue,” Crawford said. “We think we have arrived at a very elegant solution for both problems.
“To my knowledge this approach has never been attempted,” he added. “Our friends in Florida will be interested in this because it does provide a significant policy change,” toward Cuba.
However, while Florida Republican Rep. Mario Díaz-Balart is at the negotiating table, on his end “there is no deal yet,” a spokeswoman for his office told el Nuevo Herald. Diaz-Balart did not respond to a request for further comment on the subject.
The bill could be an advance of the position that the Trump administration ultimately adopts after the Cuba policy review currently underway is completed in the coming weeks. Crawford said he is also working in coordination with the White House and that the bill will come to light as part of a package of measures that will come following the conclusion of the review.
Last July, Crawford withdrew an amendment to lift the restrictions on financing agricultural exports to Cuba from the Financial Services and General Government Appropriations bill. Instead of forcing the vote, he got a commitment that the House Committee on Agriculture will give floor time to a bill with similar language -- and that Cuban American representatives, especially Díaz-Balart, would sit down and negotiate.
In January, Crawford introduced the Cuba Agricultural Exports Act, with 39 co-sponsors. But the bill does not include the 2 percent fee, although it does prohibit investments in agriculture if a Cuban company is tied to the government, the island’s armed forces or the Ministry of the Interior.
The agricultural sector has been strongly lobbying Congress to remove barriers to access to the Cuban market. The island imports almost 80 percent of the food it consumes and it is seen as a modest but desirable market for U.S. producers.
However, the idea that some money paid for food import would go to go to U.S. companies and citizens whose properties were confiscated by the Castro regime probably would not be to the liking of Havana.
Following the reestablishment of diplomatic relations, the administration of former President Barack Obama and the government of Raúl Castro sat down to discuss the thorny issue of claims, although they did not make much progress.
But Crawford said he is not trying “to write this bill to satisfy the Cuban regime.”
Experts have also questioned whether the Cuban government would be inclined to accept American credit when it already receives “soft” credits from allied countries like Vietnam, from which Cuba buys rice.
Crawford said U.S. companies offer better quality and more accessible products. If the bill becomes law, he added, U.S. companies “will have to search on their own” ways to offer credit to Cuba.
“That’s the beauty of the free market,” he said. “What we are trying to do is level the playing field and allow access to the market.”
Follow Nora Gámez Torres on Twitter: @ngameztorres