USDA chief says farmers looking ahead to possible Cuba markets

The normalization of trade relations would allow U.S. farmers to use lower transportation costs to edge in on the European Union's food exports to Cuba, Vilsack said.

President Barack Obama has been using his executive powers to chip away at the half-century-old trade embargo, imposed on the communist-ruled nation in 1960, but cannot lift it without approval from Congress that is unlikely under current Republican leadership.

"There are still preliminary steps that can be taken to prepare for that day," Vilsack said in an interview in Peru.

"When it happens, the United States will be in a very good position to reclaim a portion of the market we've lost."

Vilsack cited soybeans, rice, poultry and biofuels as new markets U.S. farmers could tap in Cuba, which in turn could sell organic products to its former Cold War foe.

The Obama administration is asking Congress for $1.5 million for on-the-ground studies into challenges to agricultural trade in Cuba, from pests to a diplomatic void left by decades of hostile relations.

"We have not had people on the ground," Vilsack said. "We need to develop relationships with the people in Cuba so we know who to do business with and who actually makes the deals."

Vilsack, who visited Cuba last month, said state agricultural commissioners and secretaries have also been traveling to the island on trade missions.

"They have been down to Cuba and they have come back with small contracts for commodities," Vilsack said.

Vilsack said farmers were the most excited about the reopening of relations with Cuba, once a global sugarcane powerhouse.

The U.S. would aim to meet 50 percent of Cuba's food and agricultural needs if trade resumes fully, up from less than 15 percent now, the U.S. Department of Agriculture said in a statement to Reuters after the interview.

Vilsack also said he was optimistic Obama would persuade Congress to pass the Trans-Pacific Partnership trade deal before the end of his term, despite the recent surge in anti-trade rhetoric in presidential campaigns.

"The president is very committed to getting it done and he intends to work as long and hard as he needs to ultimately get it passed," Vilsack said.

(Reporting by Mitra Taj; Editing by Joseph Radford)