Search Penny Hill Press

Tuesday, July 2, 2013

Agricultural Export Programs: Background and Issues

Charles E. Hanrahan
Senior Specialist in Agricultural Policy

U.S. agricultural exports have exceeded agricultural imports in every year since 1970, according to the U.S. Department of Agriculture (USDA). The most recent forecast for FY2013 is that U.S. agricultural exports will reach $139.5 billion, an all-time high. If this forecast holds, the FY2013 forecast will have exceeded the record high of $137.4 billion in FY2011. U.S. agricultural imports are forecast to reach $111 billion in FY2013, resulting in a $28.5 billion export surplus for U.S. agricultural trade.

The United States operates a number of programs that aim to develop overseas markets for U.S. agricultural products. The 2008 farm bill, which authorized these trade programs, expired in 2012. “Fiscal cliff” legislation (P.L. 112-240) extended provisions of the 2008 farm bill, including those for export programs, until September 30, 2013. Congress is currently considering a 2013 farm bill (the Senate-passed S. 954 and the House Agriculture Committee-reported H.R. 1947) that would reauthorize export programs through 2018. Funding for agricultural export programs is mandatory, and thus not subject to annual appropriations. Annual appropriations acts, however, have sometimes imposed spending conditions on these mandatory programs.

The trade title of the 2008 farm bill, the Food, Conservation, and Energy Act of 2008 (Title III of P.L. 110-246), authorized, amended, and repealed three main types of agricultural export programs:

Export market development programs. The Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture (USDA) administers five market development programs that aim is to assist U.S. industry efforts to build, maintain, and expand overseas markets for U.S. agricultural products. These are the Market Access Program (MAP); the Foreign Market Development Program (FMDP); the Emerging Markets Program (EMP); the Quality Samples Program (QSP), and the Technical Assistance for Specialty Crops Program (TASC). The 2008 farm bill made organic products eligible for market development programs and increased funds available to address sanitary and phytosanitary barriers to U.S. specialty crops;

Export credit guarantee programs. Through the GSM-102 Program and the Facility Guarantee Program, USDA’s CCC guarantees loans so that private U.S. financial institutions will extend financing to buyers in emerging markets that want to purchase U.S. agricultural exports. The 2008 farm bill made changes to export credit programs to conform to U.S. commitments in the World Trade Organization (WTO).

Direct export subsidy programs. The 2008 farm bill reauthorized the Dairy Export Incentive Program (DEIP) and repealed authority for the Export Enhancement Program (EEP), which had been inactive since FY2002.

Important factors affecting U.S. agricultural exports in FY2013 include the value of the U.S. dollar vis-a-vis currencies of trading partners and the pace of economic growth, particularly in developing and emerging countries. According to USDA forecasters, moderate depreciation of the U.S. dollar and higher rates of economic growth in developing and emerging markets are contributing to a promising outlook for U.S. agricultural trade in FY2013. Issues for Congress include determining the role and effectiveness of the public vs. private sector for investing in the development of new markets; the Brazil WTO case against U.S. cotton subsidies and implications for trade relations; and the U.S. Trade Representative’s approach to addressing agricultural trade barriers, primarily related to sanitary and phytosanitary issues.

Date of Report: June 18, 2013
Number of Pages: 22
Order Number: R41202
Price: $29.95

To Order:

R41202.pdf   to use the SECURE SHOPPING CART


Phone 301-253-0881

For email and phone orders, provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.