U.S.D.A. responds to president’s call to double exports over five years

BakingBusiness.com, July 13, 2010
by Editorial Staff

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WASHINGTON — President Barack Obama’s National Export Initiative aims to double exports of U.S. goods and services over the next five years by mobilizing all trade-related agencies of the U.S. government to assist companies in expanding markets overseas. Agricultural trade long has stood out as an American success story with the United States consistently running a trade surplus. At the same time, there are tremendous opportunities for accelerated growth in agricultural exports to accomplish a doubling in sales abroad consistent with the president’s goals, said James W. Miller, Undersecretary of Agriculture for Farm and Foreign Agricultural Services, in a recent interview with Milling & Baking News.

The U.S. Department of Agriculture has well-established market development programs. Asked what change might be expected in U.S.D.A. initiatives under the N.E.I., Mr. Miller said, “The most important change is that in the past, presidents and others in government have talked a good story about export promotion and expanding markets for agricultural products and other goods and services. President Obama has come up with a plan where he is not only talking about what has to be done and how we might do it, but he’s also putting resources there to ensure it can be done.

“The U.S.D.A. will receive a portion of those resources as will the Department of Commerce and other agencies within the government. So, it’s not only talking the good story, it’s committing the U.S. government through an allocation of resources to prioritize the expansion of export markets.”

The president’s budget for fiscal 2011 would double funding for two primary trade promotion programs at the U.S.D.A., the Foreign Market Development Program, often referred to as the cooperator program, and the Technical Assistance for Specialty Crops (TASC) program, with the additional funding for each allocated to help drive the N.I.E. for agricultural products.

The cooperator program provides cost-share assistance to nonprofit commodity and agricultural trade associations to support overseas development activities designed to remove long-term impediments to increased U.S. trade. Annual funding for the program has been little changed since the early 1980s, so the doubling in funding to $69 million as proposed in the president’s budget may have a dramatic effect.

“We can make funds that always seemed in short supply available to our partners for market development activities to ensure they are able to do what is necessary, particularly in some of the targeted markets where we see significant export expansion opportunities,” Mr. Miller said.

Having additional resources available will be important for current cooperators and will enable the department to identify and assist new cooperators, particularly those who may already be engaged in exporting to one or two countries and who might have the capacity and the desire to expand their global reach but require assistance to help them succeed, Mr. Miller said.

The TASC program under the president’s budget for fiscal 2011 would be doubled to $18 million. TASC addresses specific barriers that prohibit or threaten the export of U.S. specialty crops. Under the program, grants are provided to assist U.S. organizations in activities designed to overcome sanitary, phytosanitary, or related barriers to trade. Underlying the importance of the TASC program, exports of U.S. horticultural products for fiscal 2010 were projected at a record $22.5 billion, accounting for 22% of the value of all U.S. agricultural exports forecast for the current fiscal year.

The N.I.E. challenges the U.S.D.A. to be creative, Mr. Miller said.

“As the N.E.I. was beginning to roll out, we began to strategically think about what markets we should be concentrating on in order to achieve the goal and have the performance level that we want,” he said. “We have identified markets we believe are specifically suited to the N.E.I. in this five-year window.”

The U.S.D.A. also has worked to identify what impediments exist to increasing U.S. exports to these and other markets and determine what steps may be taken by the U.S.D.A. in cooperation with other government agencies such as the office of the U.S. Trade Representative and the private sector to eliminate or mitigate them.

Mr. Miller did not discuss particular countries but pointed out certain Asian and Latin American nations stood out as potentially strong growth markets for U.S. agricultural products. Mr. Miller said these nations have seen significant growth in the number of middle class citizens. These citizens have increased buying power, and in many cases, that buying power is reflected in improved diets and increased consumption of higher-value and more highly processed food products.

Mr. Miller acknowledged export promotion activities will vary from one country to another because the opportunities and impediments to trade are not the same.

Addressing the role concluding pending free trade agreements might have in helping boost agricultural exports in line with the N.I.E., Mr. Miller noted, “I believe if we concluded the three outstanding agreements for agriculture, there could be substantial benefits, but having said that, I don’t think the export strategy is dependent on the conclusion of those agreements. Many of the agricultural issues we face, many of the opportunities that we can develop, can be developed outside of those agreements. But certainly, they would create an environment that would be very positive for the potential for new agreements such as the Trans-Pacific Partnership.”

The second round of negotiations for the Trans-Pacific Partnership trading agreement was held in San Francisco in June. The eight countries currently involved in the T.P.P. negotiations are the United States, Singapore, Chile, New Zealand, Brunei, Australia, Peru and Vietnam. In 2009, the United States exported $72 billion of agricultural products to the Asia-Pacific region.

Mr. Miller said he was confident the N.I.E. goals for agriculture will be achieved, pointing out when export sales of U.S. agricultural products reached $62.4 billion in fiscal year 2004, there were those who thought exports couldn’t go much higher, but exports continued to surge, reaching a record $115.3 billion in fiscal year 2008. The U.S.D.A.’s forecast for agricultural exports in the current fiscal year was $104.5 billion, second only to 2008.

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