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1 1 (April 25, 2017)

handle is hein.crs/govcfvv0001 and id is 1 raw text is: FF.ri E.$~ & April 25, 2017 Farm Bill Primer: Trade and Export Promotion Programs Agricultural exports are important to both farmers and the U.S. economy. With the productivity of U.S. agriculture growing faster than domestic demand, farmers and agriculturally oriented firms rely heavily on export markets to sustain prices and revenue. Accordingly, the 2014 farm bill (Agricultural Act of 2014, P.L. 113-79) authorizes a number of programs to promote farm exports. Agricultural exports have exceeded agricultural imports in every year since the 1960s. The value of agricultural exports exceeded imports by a wide margin during the 2008-2014 time frame, peaking at $43 billion in 2014. Since then the margin of exports over imports has narrowed sharply (Figure 1). For 2016, the U.S. Department of Agriculture (USDA) reports that the U.S. agricultural trade surplus declined to $17 billion. Figure I. Value of U.S. Agricultural Trade $bhilions 140 12Q \\ NE S . mp t U Expo--t- --Tnc Sur---s Source: CRS from USDA data. Bulk commodities-wheat, rice, coarse grains, oilseeds, cotton, and tobacco-are the leading U.S. agricultural exports. USDA reports that exports of consumer-oriented products-such as dairy products, meats, poultry, live animals, oilseed meals, vegetable oils, fruits, vegetables, and beverages-have also shown steady growth. Leading export markets include China, Canada, Mexico, and the European Union. Together these markets account for about one-half of the total value of U.S. agricultural exports. Trade krvsin n thm Rka,-m B§Ill USDA administers a number of programs aimed at developing overseas markets for U.S. agricultural products and facilitating exports. The Trade title of the 2014 farm bill authorized, amended, and repealed existing trade programs. (The farm bill's Trade title also addresses programs and issues concerning U.S. international food aid, which are not addressed in this report. However, a summary of the title's international aid and agricultural trade programs is shown in the text box on the next page.) The 2014 farm bill addresses two main types of agricultural trade and export promotion programs: 1. Export market development programs. The Foreign Agricultural Service (FAS) of USDA administers five market development programs aimed at assisting U.S. industry efforts to build, maintain, and expand overseas markets for U.S. agricultural products. These include 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). In general, these programs provide matching funds to U.S. organizations to conduct a wide range of activities, including market research, consumer promotion, trade servicing, capacity building, and market access support. 2. Export credit guarantee programs. FAS administers the Export Credit Guarantee Program (GSM-102) and the Facility Guarantee Program (FGP). Under these programs, USDA's Commodity Credit Corporation (CCC) provides payment guarantees on commercial financing to facilitate U.S. agricultural exports. GSM- 102 guarantees repayment of commercial financing by approved foreign banks, mainly of developing countries, for up to two years for the purchase of U.S. farm and food products. FGP guarantees financing of goods and services exported from the United States to improve or establish agriculture- related facilities in emerging markets. The 2014 farm bill extended all of these programs through FY2018. These programs are generally funded using mandatory monies through the CCC and therefore are not subject to annual appropriations. Annual funding for market development programs as authorized in the 2014 farm bill includes $200 million for MAP, $34.5 million for the FMDP, $10 million for the EMP, and $9 million for TASC. QSP is authorized under the CCC Charter Act, not the farm bill, and is funded through CCC's borrowing authority. The 2014 farm bill, however, repealed the Dairy Export Incentive Program, thereby eliminating the use of direct export subsidies for U.S. agricultural products. The program had been largely inactive for several years. While the 2014 farm bill extended the aforementioned trade and export promotion programs largely intact, it did make several changes. To comply with a World Trade Organization decision in a cotton case won by Brazil, Congress made changes to GSM- 102, including: * shortening the loan guarantee period from three years to two years, }i{{:('3 ;//c ,%, €). g?(. !L gognpq ' -p\qm ggmm g , q 'S a X I&RULKWALiN,

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