Big drop in U.S. agricultural sales to Cuba

[Jimmy2]

U.S. agricultural exports to Cuba fell 35 percent in the first five months of this year compared with the same period in 2009, largely because of the island's shortage of hard currency, according to a recent report.

The report by the U.S.-Cuba Trade and Economic Council, a New York-based group that monitors bilateral trade, showed U.S. sales to Cuba from January to May of this year hit $182 million, compared with $278 million for the same period last year.

U.S. exports to Cuba already had seen a 24 percent drop in 2009 -- $528 million, compared with 2008, when they hit a record of $710 million, according to the report issued Tuesday.

Cuba imports an estimated 60 to 80 percent of all the food its 11 million people consume, but its U.S. purchases must be paid in cash because U.S. laws bar giving credit to the island.

John Kavulich, senior policy analyst at the trade council, wrote in the report that the main reason for the drop-off was the island's shortage of the hard currency it needs to pay for the imports.

Cuba faces an economic crisis sparked by a steep drop in the price of nickel, its key export and hard-currency earner, damage caused by three hurricanes in 2008 and the higher food prices and sagging incomes from tourism and remittances caused by the global economic crisis.

The U.S. House of Representatives is considering a bill that would provide Cuba with a gusher of U.S. tourism dollars by ending all restrictions on travel to the island. It would also ease some of the limitations on U.S. exports to Cuba.

The bill was approved by the House Agricultural Committee, with strong backing from farm and business lobbies. It must still be approved by the full House and then the Senate, where Cuban-American Sen. Bob Menendez, D-N.J., has vowed to block it