Business

Virginia apple farmers find lucrative market in Cuba

Friday, January 11, 2013    

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FARMERS from Virginia, USA are estimated to have sent about US$1 million ($93 million) worth of apples to Cuba last year.

The Caribbean country has become a huge market for Virginia farmers over the past decade amid improving trade relations with the US, according to an article published in the Winchester Star.

Virginia's agricultural exports to communist Cuba have jumped from US$838,000 in 2003 — after parts of the 1961 US trade embargo against the island were relaxed — to nearly US$65 million in 2011, according to figures the paper said it received from Todd Haymore, Virginia's secretary of Agriculture and Forestry.

"With agricultural exports for the first nine months of 2012 valued at US$53 million, Cuba is a consistently valuable market for Virginia's agricultural products," the paper quoted Haymore as saying.

The exportation of apples has particularly been a valuable business for farmers, with Cuba reportedly providing an avenue for lower grade apples that can't be sold in the US.

A Winchester, Virginia company, Glaize Apples, sent about 7,000 cases or 875,000 apples to the country in 2012, said the paper. The price Glaize gets for the fruit in Cuba is reportedly better than what it would get from an apple processing plant, but lower than at a US grocery store.

Owner Phil Glaize told the paper that the apples Glaize sends to Cuba have some defects — the primary one being russeting that gives the skin a brownish discoloration — but the taste and quality of the fruit is unaffected.

"We couldn't sell (an apple with extensive russeting) in this country, so it's nice that we have that outlet" Glaize was quoted as saying. "(Cuba) gets a lower grade for a lower price, and the only difference is (these apples aren't) as cosmetically appealing.

"It's revenue from apples that we would have limited sale for otherwise," Glaize reportedly said. "If 7,000 cases went to Cuba, I might have been able to only sell 3,000 of them through other channels."

Despite the relaxation of the US trade embargo against Cuba, there are still obstacles for agricultural businesses that want to export to the island, the paper said.

Haymore reportedly said that there are restrictions on export financing terms — exporters must rely on a third-party financial institution, usually a bank in Canada or France, to act as an intermediary to receive payment to a US bank — and agricultural goods require a US Commerce Export License to be sold and shipped to Cuba.

What's more is that the process of obtaining a licence can be time consuming and create a barrier for trade, Haymore reportedly told the Winchester Star.

Glaize reportedly told the paper that he has also experienced difficulties in exporting to Cuba.

"The government, with (Cuba) being a communist country that has an embargo, you have to jump through a lot of hoops to get our product in there," he reportedly said. "We're exporting our apples legally because (Cuba) can take food products and health-oriented products."

However, the businessman reportedly sees the benefits the trade arrangement has on his business and for his employees on a regular basis.

"One thing it does is it allows us to keep these 50 people working more days than we would if we didn't have the market," Glaize was quoted to have said. "For every apple we can put into a cardboard box, we're providing wages to all these people, we're providing wages to the people that make the cardboard boxes, and if we don't sell (apples) to Cuba, then they don't go into the boxes ... it's a real trickle-down deal."

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