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FloridaIsWorriedAboutaCubanFruitInvasion

April28,20166:00PMEDTUpdatedonApril29,201612:09PMEDT
Fromsugartooranges,postsanctionsCubaposessupplythreat
OrganicfoodmakerseyeinvestmentasU.S.growerssaygoslow
FloridacitrusfarmerDanRicheyisworriedaboutaCubanfruitinvasion.
Theyhaveabetterclimatethanusandthesamegrowingseason,saidRichey,whofarms4,000acresofmostly
grapefruitnearVeroBeach.Theycouldbecomethelowcostcompetitor,rightatourdoorstep.
Whileadiplomaticthawisjustbeginning,PresidentBarackObamaisseekingcloserU.S.tradetieswithCuba,
signalinganendtofivedecadesofsanctionsthatleftthecountrystarvedofcashandlittlechangedsinceFidel
Castrosrevolutionin1959.ThatsclearingapathformoreagriculturalinvestmentonaCaribbeanislandjust90
miles(145kilometers)southofFlorida.
Cubanshavebeenmorebuyersthancompetitorsbecausetheyeatmostlyimportedfoodandalreadygetgrain
fromtheMidwest.ButexpandedfarminginthecountryposesanewthreatforFlorida,thetopU.S.growerofsugar
cane,orangesandfreshtomatoes.Cubawasonceamajorsupplierofsugar,fruitsandvegetables,andwithland
untouchedbymodernchemicalsorgeneticallymodifiedseed,itisdrawingtheattentionoforganicfoodproducers.
TheopeningoffulltradeandcommercialrelationswithCubawillhaveamoresignificantimpactonFlorida
agriculturethananythingelseinthehistoryofourstate,saidWilliamMessina,anagriculturaleconomistwiththe
UniversityofFloridainGainesville.

TradeDilemma
Tradeagreementshavebeenalightningrodinthisyearspresidentialcampaign.Candidatesfrombothparties
havedecriedtheimpactonjobswhendomesticindustriesareforcedtocompetewithcheaperimports,especially
thosesubsidizedbyforeigngovernmentsorproducedwithfewerworkplaceorenvironmentalrulesthanintheU.S.
U.S.farmerswereearlyandenthusiasticadvocatesforclosertieswithCuba.Congressin2000authorized
humanitarianexports,includingagriculturalproductsvaluedat$685millionin2008.
Since2014,whenObamamovedtoreestablishnormaldiplomatictiesaneffortthatincludedatriptoHavanato
meetRaulCastro,whoreplacedhisbrotherFidelasCubasleaderagriculturegroupshavestreamedsouth.
Cubanpurchasescouldmean$1.1billioninannualsalesforAmericanfarmers,theU.S.DepartmentofAgriculture
estimates.Buttheprospectofmoregrainsaleshasovershadowedconcernsfromgrowerswhomayeventually
competewiththeislandoncecropoutputisexpanded.
ExportstoCubaarealwaysahugeeconomicopportunity,saidJanellHendren,nationalaffairscoordinatorwith
theFloridaFarmBureauFederationinGainesville.ImportsfromCubawearenotreallykeenon.
ThestateisthebiggestU.S.produceroforangesandsugarcane,andrankssecondtoCaliforniainvegetablesand

thirdinfruit.Floridasold$4.2billionofcropsin2014,exporting$3.6billionofthem,accordingtoUSDAdata.
Cubanagriculturalproductionstruggledasitseconomysputtered.In1989,theislandwasthelargestsugar
producerbehindBrazilandIndia,growing8.12millionmetrictons,USDAdatashow.WiththecollapseoftheSoviet
Union,itsbiggestbuyer,productionplunged.By2011,itwas1.1milliontons,thelowestsincebeforetherevolution.
Theydonthavemuchmoney,buttheyhavelandtheycouldgiveawaytofarmers,saidMessina,theUniversityof
Floridaprofessor.Thatmakesproductionmuchlessexpensive.
ItsalsoalureforU.S.investors.AgriculturalequipmentmakerDeere&Co.,soybeanprocessorBungeLtd.,and
severalstatefarmbureausareallinfavorofopeningCubatrade,accordingtolobbyingrecords.CargillInc.,the
worldslargestagribusiness,isbankrollingtheU.S.AgricultureCoalitionforCuba,aconsortiumofcommodity
growers,farmlendersandexporters.

OrganicInvestment
MembersofanorganicsfocusedgroupthatincludesfoodcompanieslikeStonyfieldFarmInc.plantovisitCubafor
severaldaysstartingMay3.Theyseetheislandslandandfarmingpracticesasapotentialfit,especiallywith
expandingdemandforfoodthatisntproducedwithpesticidesorgeneticallymodifiedseeds.
Weasanindustryneedtostarttodevelopingnewsupplychains,saidDaveAlexander,presidentofGlobal
Organics,thebiggestselleroforganicsugarintheU.S.andEurope.Wererapidlyapproachingthetimewhen
demandisfaroutstrippingsupply.
AnycompetitionwithCubaisstillyearsaway,anditsagriculturalexportstotheU.S.probablywillneverevolve
beyondnichemarketstatus,saidJohnKavulich,presidentoftheNewYorkbasedU.S.CubaTradeandEconomic
Council.

BiggerProblem?
Cropdiseasesmaybeabiggerimmediateconcern,especiallyiftheU.S.movestooquicklyeaselimitsonfood
imports.Citrusgreening,whichisdestroyingfruittrees,hascutFloridasproductionoforanges,itsbiggestcrop,by
46percentsince2013,accordingtoaUSDAforecastinApril.Meanwhile,fruitflieshavedamagedcropsinDade
County.
Someoftheinsectsanddiseasethatwegotincitruscamefromabroad,includingSouthAmerica,saidDean
Mixon,64,whogrowscitruson50acresinBradenton,Florida,thathisgrandfatherstartedin1930.Thereare
largeplantationswithcitrusinCuba,andtheydonthavealltherulesandregulationswedo,thatswhenitbecomes
unfair.
TheWhiteHouseissensitivetogrowerconcernsbutseesplentyofroomformoresupply,accordingtoAgriculture
SecretaryTomVilsack.
Cubaisinapositiontobeasupplier,especiallyinorganic,VilsacksaidbytelephoneonApril20.Butthatdoesnt
necessarilymeantheyrecompetingagainstuswhentheressomuchdemand.

BillionaireWangJianlin,whosstartingtourismprojectsacrossChinaasWaltDisneyCo.readiestoopenitsfirst
mainlandthemeparkinShanghaionJune16,saidtheU.S.companymisreadtheChinesemarketandshouldnt
havesteppedonhishometurf.
OnetigerisnomatchforapackofwolvesShanghaihasoneDisney,whileWanda,acrossthenation,willopen
15to20,the61yearoldchairmanofDalianWandaGroupCo.saidinanappearanceonaChinaCentral
TelevisionshowthatairedSunday.
Disneysaidinanemailthecommentwasnotworthyofaresponse.
ThoughWanghasjeeredatDisneybefore,hislatestsalvosignalsanescalationintherivalrybetweentheworlds
biggestentertainmentcompanyandChinaslargest.AtstakeisdominanceofChinas$610billiontourismindustry,
whichthegovernmentpredictswilldoubleby2020amidagrowingmiddleclass.

DisneyThreat
WandaisreallythreatenedbyDisney,saidJenniferSo,atourismanalystatChinaSecuritiesInternationalbased
inHongKong.Wandasskillatoperatingthemeparkshasnotbeenprovenandtheyhavetofindtheright
managementteam.
Wanda,foundedin1988,hasbusinessesrangingfromcommercialpropertiestofilmsandfinance,andthe
conglomeratehadassetsof634billionyuan($97billion)andrevenueof290billionyuanin2015.Bycomparison,
Disneysrevenueforthe12monthsendedOct.3,2015grew8.1percentto$52.5billion.
WanghassaidWandaaimstosurpassDisneyastheworldslargesttourismcompanyby2020.Thechairmanand
founderwillpresideovertheopeningofaWandaCityfeaturingitsownthemepark,moviecomplexandhotelsin
southeasternJiangxiprovincethatneighborsShanghaithisweekend.
TicketsforWandasJiangxipark,locatedintheprovincialcapitalNanchang,arepricedat198yuanonmostdays
and248yuanonholidaysandweekends.ThatsabouthalfthepriceofShanghaiDisneyland,whichchargesadults
370yuaneachforregularticketsand499yuanduringpeakdays.

CantComprehend
Wang,whovieswithJackMaforthetitleofChinasrichestpersonontheBloombergBillionairesIndex,saidhe
couldntcomprehendhowDisneyspent$5.5billiononaparksimilarinscaletotheJiangxiproject,whichaccording
toWandaswebsitecost21billionyuan.Withsuchsteepcosts,Disneywouldhavetochargehighprices,which
wouldturnawaycustomers,hesaid.
Disneyknowsifyourelyonbricksandmortar,itshardtobreakevenandthatswhytheirfocusisonthenextstage
ofintellectualproperty.ThisiswhatChineseoperatorsdonthave,saidChinaSecuritiesSo.IfyoulookatDisney,
theymakealotofmoneyfromanimationpatentsandprofitcontributionofparkoperationsisprettylow.
WandaandDisneysrivalryisntlimitedtoChina.WandasaidinFebruaryitplanstoinvestmorethan3billioneuros
($3.4billion)inaretailandleisuredevelopmentprojectinFrancethatsaimedattakingonDisneylandParis.

WangsPredictions
Overthenext10to20years,WandamustmakeDisneyunprofitable,Wangsaid.Everyparkofourshasitsown
businessmodel,withconstantinnovationandcombinesindoorandoutdooractivities.SoIthinkthatDisneys
prospectsinChina,atleastfinancially,dontlookgoodtome.
WangforecastsWandawillreach$100billioninrevenueand$10billioninnetincomeby2020.Theconglomerate,
whichacquiredHollywoodfilmcompanyLegendaryEntertainmentfor$3.5billionearlierthisyear,ispoisedto
becometheworldslargestcinemaoperatorafteritcompletesthepurchaseofCarmikeCinemasInc.
ForDisneytoplanits963acreparkoutdoorsinacitylikeShanghai,wheresummersarerainyandwintersare
cold,revealedthecompanyslackofinnovativethinking,Wangsaid.TheprojectistheBurbank,Californiabased
companysfirstthemeparkinmainlandChina.

MickeyFrenzy
DisneysvastintellectualpropertyrightshasbecomeaburdenandtheU.S.companyseldomresearchesnew
businessmodels,Wangsaid.WhileheacknowledgedthatDisney,astheworldslargesttourismbusiness,isavery
goodcompany,theformerPeoplesLiberationArmyofficersaidhesconfidentWandawillwinout.
ThedaysofMickeyMouseandDonaldDuckbeingabletocreateafrenzyareover,saidWang.Theyareentirely
cloningpreviousintellectualproperty,cloningpreviousproductswithnoinnovation.