Glickman Testifies on Export Promotion

June 13, 2000

Agriculture Secretary Dan Glickman told the House Agriculture Committee USDA has been working "at full throttle" to build long-term trade opportunities, increase exports, help relieve hunger abroad, and help farmers and ranchers earn an adequate income from their farms. But the committee wanted to hear more about USDA’s failure to more fully use the Export Enhancement Program.

Members asked Glickman if USDA is maximizing use of programs such as the EEP and the Dairy Export Incentive Program (DEIP). Committee Chairman Larry Combest (R-TX) noted that while a total of $2 billion was authorized for EEP from 1996 through 2000, less than $10 million of those funds have been used.

"USDA estimates that U.S. agricultural exports will total $50 billion in 2000, and that the expected trade surplus will be $11 billion, the lowest level since 1986," Combest said. "Because of the reduced value of agricultural exports it is important that the USDA export and market promotion programs are utilized to the maximum extent."

But Glickman said the administration supports legislation to authorize the Secretary "to reallocate unobligated Export Enhancement Program funding in the last quarter of the fiscal year to be used for U.S. foreign food assistance activities, including P.L. 480 and Food for Progress programs, and for purchasing commodities to replenish the Bill Emerson Humanitarian Trust."

Combest and other members also expressed concern regarding the wide disparity between U.S. support programs for domestic agriculture and those of other nations. The European Union spends more than 16 times as much as the United States on export subsidies and more than twice as much on domestic support for agriculture.

"As I said following the World Trade Organization Ministerial in Seattle last year, I believe the Agriculture Committee should review all of our options for our own programs," Combest said. "I want to look at everything available to us and consider steps to insure our farmers are not disadvantaged. Our farmers can compete with any farmers in the world but cannot and should not be forced to compete with other governments."

For his part, Glickman ticked off a list of administration actions he said demonstrated a commitment to increasing exports. "Over the past two years, USDA has used its export credit guarantee programs to support sales of more than $7 billion in U.S. agricultural products. In fiscal 1998, during the height of the Asian financial crisis, USDA made $1.5 billion in credit guarantees available to exporters for sales to South Korea alone, and Korean importers used more than 90% of that amount for commercial purchases of U.S. agricultural products," he said.

Also during the past two years, exporters to South Korea and the countries of Southeast Asia have used USDA credit guarantees to sell $2.6 billion worth of American oilseeds, wheat, corn, cotton, meats, and other products, he added.

"As a result of these efforts and rising world demand, combined beef, pork, and poultry exports are forecast to top $6.6 billion this fiscal year, up from $5.8 billion a year earlier," said Glickman. "U.S. beef especially is benefitting from both higher prices and strong overseas demand. While pork and poultry are still recovering from losses incurred during the Asian and Russian financial crises, both are forecast at least to equal, if not exceed last year's market share figures.

"For fiscal 2000 to date, USDA has announced the availability of more than $5 billion in export credit guarantees for sales to countries where lack of credit might otherwise present a barrier to sales."

The Dairy Export Incentive Program, he said, allowed U.S. exporters to sell more than 136,000 tons of dairy products valued at $337 million in fiscal 1999. Under DEIP, USDA awarded bonuses of $145 million to help U.S. dairy producers and exporters compete in overseas markets. For fiscal 2000 to date, nearly $69 million in bonuses have been awarded, supporting sales of around 77,000 tons of U.S. dairy products.

USDA and other federal trade negotiators planed to use the new round of World Trade Organization talks "play a leadership role, as we did in the Uruguay Round, in pressing for significant trade policy reforms, including eliminating export subsidies in agriculture, reforming state trading enterprises, improving market access, tightening rules on domestic support, and facilitating trade in new technologies, including biotechnology. We will intensify our work with developing countries to build alliances based on common interests in trade reform," Glickman said.