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Lack of farm bill places record exports in jeopardy

Lack of farm bill places record exports in jeopardy

White House touts record U.S. agricultural exports. Warns that funding supporting programs behind those exports must be renewed quickly with passage of new farm bill.  

As Congress dithers over a new farm bill, record U.S. agriculture exports have been placed in jeopardy.

That assessment came from Michael Scuse, USDA undersecretary for farm and foreign agricultural services, during a Thursday (December 19) afternoon press call.

“We’ve experienced the strongest five-year period in the history of agricultural exports,” said Scuse. “This past year was a record-breaking year of $140.9 billion in agricultural exports. It surpasses the record of two years, which was just over $137 billion. Last year, the number was $136 billion.

“Agriculture trade has been gaining a tremendous amount of momentum. … We have a need to continue this momentum and use some of these export programs that have been at our disposal in the past.”

Studies show that for every $1 spent on the export programs -- such as the Foreign Market Development Program and Market Access Program (MAP) -- there is a $35 dollar return on investment. “There are also studies done by some of the cooperators and other industries that show that number is far greater than $1 for $35. 

USDA fact sheet on exports.

“We need a farm bill so we have these programs … to help small and medium-sized companies get into the foreign markets and promote their products. … It isn’t just about promoting agricultural products. As (Agriculture Secretary Tom Vilsack) likes to point out, it’s a food, farm and jobs bill. Every $1 billion in foreign trade supports nearly 8,000 jobs.”

The need for quick passage of a new farm bill is especially critical because “we’re going to run out of the carryover funds for many of our cooperators during the month of January,” said Scuse.

The squeeze on those promoting U.S. agricultural products overseas is real, insisted Tim Hamilton, executive director for Food Export Midwest/Food Export Northeast.

The two organizations, said Hamilton, “partner with our member state departments of agriculture. We use funding through the Market Access Program, normally authorized through the farm bill, to support efforts by mostly smaller companies to begin exporting and to increase exports of food and ag products. Last year, two organizations working together supported efforts by almost 1,500 different farms.”

Importance of marketing programs

The foreign deal-making and education is made possible through support by the farm bill, said Hamilton. “We’re facing a lot of challenges this year because of the delay … in getting a (new farm) bill passed.

“The way it works in a very competitive international marketplace is we need to make commitments to retailers, importers and distributors around the world. We need to make commitments at trade shows. A lot of these things are planned months in advance.”

Hamilton said due to a lack of new farm legislation, “we’ve been unable to make some of those commitments to our really good customers around the world.

“We have important trade shows coming up in the first quarter of 2014 in Mexico, China, Japan, Canada, the Middle East, in Europe. And we’re unable to commit to attending these shows. We’re unable to make arrangements with some of the importers and distributors on promotions of U.S. products.”

And U.S. competitors aren’t sitting still, he warned. “Some of our competitor nations –- Canada, (European nations), Brazil –- are able to make these commitments. And we’re kind of asking our customers to hold off.

“The challenge is we risk losing market share.

“Last year, when we had a similar farm bill delay, we ended up losing significant opportunities because we weren’t present at some of those events. We estimate losses last year at $10 million of actual sales at some of these events.”

What help will come for exports from having a new farm bill?

“The programs we offer at Food Export are supported entirely by MAP and fees that some of our participant companies pay,” said Hamilton. “Without that, we’re kind of on hold. It’s almost like we’re trying to run a business out of the petty cash box, waiting for some more money to come in before we can take new steps.

“Anything from education of our exporters, anything regarding commercial activities either with importers or retailers, trade shows, finding new customers overseas are all at risk until a new farm bill is passed.”

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