Since 2002, the United States has continued as Cuba’s largest supplier of food and agricultural products. Cuba has consistently ranked among the top ten export markets for U.S. soybean oil, dry peas, lentils, dry beans, rice, powdered milk, and poultry meat. Cuba also has been a major market for U.S. corn, wheat and soybeans. U.S. firms, as a result of the Trade Sanctions Reform and Export Enhancement Act (TSRA) signed into law in 2000, were allowed to sell food and agricultural products to Cuba on a cash basis.
Cuba, however, did not begin purchasing from the United States until after Hurricane Michelle had severely damaged its agricultural sector in 2001.From 2004 through 2006, U.S agricultural exports to Cuba have averaged more than $350 million, with the highest value, $382 million, in 2004. Even with reduced U.S. exports of food and agricultural products to Cuba in 2005 and 2006, the United States has remained Cuba’s most important food and agricultural product supplier accounting for more than one-fourth of the country's total food and agricultural imports. With the collapse of the Soviet Bloc in the late 1980s, Cuba’s heavily subsidized sugar industry was not able to compete in international markets and it went through a major contraction. Prior to this contraction, Cuba was the world's third largest sugar producer and largest sugar exporter.
Currently, Cuba’s sugar industry accounts for only slightly more than 10 percent of the volumes it was producing in the 1980s, and it would take large amounts of investment to rebuild the industry into a competitive sugar producer. Loss of export earnings from sugar caused major contractions, not only in the sugar industry, but in all sectors of Cuba’s economy in the early 1990s. Cuba’s loss of its sugar export markets severely limited its export earnings resulting in a significant drop in imports, including agricultural inputs and food imports. As a result of large declines in domestic food production and food imports, Cuba experienced food shortages in 1993/94.
In response to these food shortages, in 1993 Cuba began to implement an unprecedented set of reforms in agriculture that included breaking up most largestate farms into production cooperatives and opening farmers markets where farmers could sell surplus output (production beyond quotas they had to sell to the state) at free market prices. These market-oriented policy changes resulted in gradual recovery in non-sugar agriculture. Nevertheless, most food crops during the past three years have shown declining output trends. Cuba has become increasingly reliant on food imports to feed its people.