DES MOINES, IOWA — The US Department of Agriculture will pump Commodity Credit Corp. funds into support for American producers as they strive to develop and maintain markets for their US wheat, corn, soybeans and other commodities during a period of global instability. The National Association of Wheat Growers, US Wheat Associates and other agriculture trade groups praised the $2.3 billion stimulus announced Oct. 24. Agriculture Secretary Tom Vilsack indicated $1.3 billion would be directed to the Regional Agricultural Promotion Program (RAPP) and support for specialty crop industries to diversify export markets, and $1 billion would go to purchase US commodities for donation, an effort to help address global hunger.
Stimulus for agricultural market development
The RAPP funds will extend a boots-on-the-ground effort to build trust and relationships crucial to creating new export opportunities, increasing agricultural exports and boosting producer income, the USDA said. That approach is under the auspices of the Agricultural Trade Promotion Program (ATP), which the USDA created in 2018 to help exporters diversify their markets in reaction to the trade war with China. The Department said the $1.3 billion stimulus to the program will ensure continuity of the relationships key to market development, especially for the specialty crops industry, and help the United States diversify away from reliance on a few major markets. The taxpayer funds are intended to be used to help specialty crop sellers to enter and expand markets that often impose onerous non-tariff barriers on their products.
The USDA said additional investments in market development were crucial to besting competitors, including in Asia and Africa where more suppliers are now vying for export dollars. The USDA projects that a $19 billion agricultural trade deficit in fiscal 2023 will grow to $27.5 billion in fiscal 2024. On the positive side of the ledger, the Department cited analysis indicating for every $1 invested in export market development, exports are increased by $24.50.
US commodities purchased for donation
The Oct. 24 announcement from Mr. Vilsack also detailed $1 billion in taxpayer funds to purchase commodities and work with USAID, — the lead federal agency on international emergency food aid programs — to ensure the supplies reach those most in need around the world. The US funds are intended to shore up ongoing efforts to address global hunger, and back US producers through the purchase of surplus commodities. The USDA said the donations will assist some areas where people are hungry due to war, droughts and other challenges.
“The Commodity Credit Corp. continues to address the needs of American producers as significant and unpredictable challenges arise, including impacts to international commodities markets and global food insecurity in the wake of ongoing conflict and a changing climate,” Mr. Vilsack said.
“The Commodity Credit Corp. and USDA’s market development and aid programs are critically important at this time,” he said, “and with this additional support we can strengthen US agriculture’s presence in existing markets, open up new market opportunities, and build on our relationships and connections to ensure that high-quality American agriculture and food products reach where they are needed in the world.”
The CCC turned 90 this month, having been incorporated Oct. 17, 1933, to attempt to stabilize markets, support farm income and prices and help farmers market their commodities in response to the Great Depression and the Dust Bowl’s devastation in the Plains.
Agriculture groups praise announcement
In a joint statement, the National Association of Wheat Growers (NAWG) and US Wheat Associates praised Mr. Vilsack for releasing the funds and thanked senators Debbie Stabenow of Michigan and John Boozman of Arkansas for formally requesting additional support for trade promotion and food assistance in an Aug. 28 letter to Mr. Vilsack.
US Wheat noted the ATP program established in 2019 awarded grants to almost 60 cooperating organizations to be invested by 2024.
“US Wheat demonstrated that the additional funding helped us protect crucial wheat export sales in established markets and build a base for growth in new markets,” said Oklahoma wheat farmer Michael Peters, chairman of US Wheat Associates. “We appreciate the introduction of the new RAPP, and the USW team will work very hard to use it effectively. Looking ahead, global wheat trade is increasingly competitive and market development takes time and consistency. That’s why we believe that in the long term, increases for established farm bill export development programs are the best way forward.”
NAWG praised the food aid initiative and said US taxpayers, through the USDA’s Food for Progress and USAID Food for Peace programs, have donated more than one million tonnes of wheat annually for the past three years.
“Additional funding for food assistance programs will help address the most urgent humanitarian needs in a generation,” said Brent Cheyne, president of NAWG. “(We) look forward to working with USDA and other partners to ensure additional food donations generate the most benefit where it is needed most. As NAWG works with Congress to reauthorize the farm bill, we continue to advocate for strengthening the in-kind commodity donation program and additional investments in the existing trade promotion programs.”
The American Soybean Association (ASA) said it was grateful for the USDA’s acknowledgment of the importance of market development programs amid volatility surrounding agriculture and extraordinary challenges that arise from unpredictability.
“The USDA has demonstrated that it recognizes the importance of market promotion programs,” said Illinois soybean farmer Daryl Cates, president of the ASA. “We are thankful USDA sees value in the collective efforts of the Foreign Agricultural Service and agriculture cooperators like the American Soybean Association, which are stewards of market development funding and bring vital aid programs and market expansion projects to life.”.
The National Corn Growers Association (NCGA) was equally effusive in praising Mr. Vilsack and the senators who requested the funds. But the NCGA said the $2.3 billion announcement could be the impetus for increased funding for the Market Access Program, which provides support in marketing activities abroad, and Foreign Market Development, which helps create and maintain long-term export markets.
“It has been almost 20 years since we have had an increase in funding for these crucial trade programs,” said Minnesota corn farmer Harold Wolle, president of the NCGA. “We are falling behind other countries that are being more aggressive in their international market development programs. This announcement is welcome news, but it is equally crucial that Congress increases funding for the Market Access Program and the Foreign Market Development Program as it reauthorizes the farm bill.”