Transcript of Cuban Market (Cuba series pt. 2) [Bill Kelly, reporting] It takes a little while to see what's different along the streets of Havana. It's a major city, but something is missing. It's advertising, the competition for customers. After all the state owns nearly everything… who's the competition? There is competition for Cuban dollars, but it's among foreign businesses. And more recently competition among American corporations. At a trade fair last fall, dozens of companies and state delegations hawked their grains, and fruits, and vegetables. [Cuba Trade Fair Participant] "This event this week, when we look back at history will be looked at as a major event in a new chapter in trade with Cuba." [Kelly] This, all the off shoot of a change in law allowing the sale of food and medicine to Cuba as humanitarian aid. [Cuba Trade Fair Participant] "We're going to have to sharpen our pencils to do deals with the Cuban people but you know what, it's another market. [Kelly] Does all this mean there's a new and expanding market for American grain, beef, and processed foods? The members of the Nebraska Farm Bureau sure hope so. The group wants to dump any remaining trade restrictions with Cuba. [Don Batie, Farm Bureau Member] "I'd would guess 85 to 90 percent of the members here today would approve of increasing trade with Cuba. [Kelly] Keith Olson, the current president of the Nebraska Farm Bureau, believes selling grain today can only help tomorrow. [Keith Olson, Nebraska Farm Bureau] The people of Cuba want our products and we have products to sell them and we shouldn't let ideological differences prevent that trade from taking place. [Kelly] There may be three markets opening in Cuba: Cuba today, Cuba tomorrow, and Cuban Tourism. The first…Cuba today… allows limited humanitarian food shipments. They want more. Ricardo Alarcon, the leader of Cuba's legislature and possible successor to Castro, made his pitch to journalism students from the University of Nebraska Lincoln. [Ricardo Alaracon, President, Cuba National Assembly] "As we work to develop trade more things will appear and more Americans will realize it should not be a one way trade and there are some things that would be attractive to your market." [Kelly] Alarcon listed rice and vegetables as the commodities Cuba needs most, but what Nebraska could offer …corn, wheat, soy beans and beef… were not far behind. [Alaracon] "Our culture is such that we are a wheat consuming people. It was introduced by the Spaniards. But we can not grow wheat here." [Kelly] It's in demand because Cuba is a country that cannot feed itself. The loss of support from the Communist Soviet Union and the embargo has taken its toll, but the failings of Socialism and Castro's economic system are on view daily. Outside of Havana are thousands of acres of state owned farmland, but it is not especially productive land. The rich red soil on the Ramoe' family farm produces year round… onions, tomatoes, lettuce, garlic and plantains. Felipe Ramoe' turned over much of his families farm to the government 40 years ago following the Revolution. Publicly he still supports the philosophy of equality even if it brings hardship. [Felipe Ramoe] "I tell him (my son) everything needs sacrifice. But lately we (the small farms) do not get the attention from the government." [Kelly] His son, Eliah, grew up in a system where the small family farmer can not expand, can not earn his own profit, and frequently is unable to get the supplies and fertilizers used on the large state run farms. [Eliah Ramoe] "Generally, I get all these items from the black market. A state worker recommends how much insecticide to buy for the state farm. Then they only spray half of that. The other half is sold on the black market. The same for fertilizers. Everything hinges on this informal market." [Kelly] The government requires the farm turn over a certain amount its produce to the people. Eliah openly admits in order to survive he cheats the government so he has more and better goods to sell on his own. [Eliah Ramoe] "If the state will not help you, they cannot not make demands of you so you give the state whatever you see fit. In a word: the worst. The worst of your produce goes to the state." [Kelly, on camera] Cubans long for more and better meat and produce. At market, Cuba's independent farmers once again get a harsh reminder of how the power of the state influences the laws of supply, demand, and profit. Farmers can sell their goods to a private middleman who adds a modest mark up to make his own profit. Prices at these booths can vary daily, based on supply and demand. [Moises Saab Lorenzo, Cuban journalist] These people are working accordingly with the laws of the monopoly. I have even heard of people throwing away their stuff to keep their prices high. If there is an excess of guava, for instance, they would rather leave it rotting and throw it away than diminish the price. [Kelly] Any similarity to capitalism is fleeting. Along one row are the butcher's stands operated by the farmer's competition… the government farms. The price's here are always lower than the private farms. We're told the quality, however, is not always as good. The food being bought here…beyond the government's free rations… is still often in short supply for citizens. In the government run tourist restaurants, meat and poultry were always available for the customers. Portions of vegetables were noticeably small. The demand is undeniable, but the legal and logistic difficulties of making these deals happen limit how much wheeling and dealing is possible with Cuba today. Reports indicate Castro has defaulted on millions of dollars in trade deals with other countries. Those who oppose trading with Cuba on moral grounds say its also just bad business. [Joe Garcia, Cuban American National Foundation] "This is the largest debtor nation, per capita, in the world. Since when is this good business?" [Kelly] The American trade deals signed recently are all cash payments…by law. Even these, warn critics, can be risky. [Joe Garcia] "It's like doing business with the Mafia. Once you start down that road trust me, no business is worth it. And in particular with Cuba, everyone who has done business with Cuba, in the end, is owned money." [Kelly] But the interest in today's Cuba may have much more to do with the future market potential. In this case the future means, after Castro. [Keith Olson, Farm Bureau] "Castro will not be in power forever and it appears the people I visited with about the government, younger people, they seem to be more to working with the United States and Americans and being friends." [Kelly] Agri-business corporations are positioning themselves to enter the market when the free market forces kick in. ConAgra in Omaha signed commodity deals with Cuba last fall, but won't talk publicly about them. There's more to come. Brand names of many ConAgra grocery products… from Healthy Choice to Patio Mexican food… have recently been trademarked in Cuba. A noticeable absence at the Havana Trade Fair: there were no State of Nebraska delegations or farm organizations represented. [Merlyn Carlson, Director, Nebraska Department of Agriculture] "We took a look at that and you can't cut the pie in to too many pieces or it becomes meaningless. So as you look at our opportunities for Nebraska you see cities in Asia with 12 million people in just one city and the purchasing power there is established and its mighty great." [Kelly] Merlyn Carlson, the head of Nebraska's Department of Agriculture knows groups like the Farm Bureau want trade with Cuba. For the state it's tough to choose where to concentrate its overseas salesmanship.. [Bill Kelly] "Do you still want to get into Cuba at some point and time? [Carlson] Oh sure. You've got to have your foot in the door. [Kelly] Are we too late to do that? [Carlson] Oh no. Oh no. I should say not." [Keith Olson, Farm Bureau] "The early bird gets the worm and the first ones there may be getting their foot in the door first. And also, Cuba likes to deal with people they know and people they trust. [Bill Kelly] And Nebraska isn't there right now? [Olson] And Nebraska isn't there right now. [Kelly] The Farm Bureau's fears are right on. Cuba's top trade official told us the early American trade partners already have the upper hand. [Pedro Alvarez Borrego, Chairman, Alimport] "Those institutions and those states who have been more active in normalization of relations with Cuba, we have more contact with them. They have more possibilities and more advantage." [Kelly] Some call it an invitation. Others call it a trap. Regardless, individual states and corporations already have plans in development to prepare for trade with this problematic neighbor separated by just ninety miles of ocean and 40 years of history. Reporting from Havana, Cuba, I'm Bill Kelly for STATEWIDE.