University of Wisconsin Center for Cooperatives
Rural Cooperatives, March/April 2000, pp. 15-17
Published by the Rural Business and Cooperative Development Service
Foreign affairs: USDA Foreign Agricultural Service promotes U.S. agriculture abroad
By Karl Hampton
Are U.S. agricultural interests represented overseas? Does it matter whether they are or not? The answer to both questions is a resounding "yes," says Timothy J. Galvin, administrator of USDA's Foreign Agricultural Service (FAS). "FAS represents the diverse interests of U.S. agribusiness—from farmers to food manufacturers—abroad,"' Galvin says. It also collects, analyzes and disseminates information about global supply and demand, trade trends and emerging market opportunities.
The goal of FAS is to improve market access for U.S. products. To do this, the agency implements programs designed to build new markets and to maintain the competitive position of U.S. products in the global marketplace. FAS also carries out food aid and market-related technical assistance programs, as well as operates a variety of Congressionally mandated import and export programs.
Under the terms of a recent memorandum of understanding, FAS will also be working closely with the USDA Rural Business-Cooperative Service to help develop export marketing plans for cooperatives that wish to sell agricultural goods overseas (see sidebar, page 16).
Why U.S. exports matter
Established in 1953, FAS has employees in about 70 overseas offices covering more than 130 countries. These offices link foreign buyers with potential suppliers in the United States. They also assist U.S. exporters in launching products in overseas markets that are often characterized by different food preferences, social customs and marketing systems.
In 1999, U.S. agricultural exports totaled $49 billion. A slight increase in export value is expected this year.
Overseas markets account for one quarter of farm cash receipts. According to USDA's Economic Research Service, each export dollar creates another $1.28 in supporting activities to process, package, ship and finance products. This means that agricultural exports currently generate $112 billion in total economic activity. About 750,000 jobs are tied to agricultural exports as well.
FAS programs help U.S. exporters develop and maintain markets overseas for hundreds of food and agricultural products, ranging from bulk commodities to brand-name supermarket items. Promotional activities are done primarily in cooperation with nonprofit agricultural trade associations, companies that agree to plan, manage and contribute support staff and money. The largest of FAS' promotional programs are the Foreign Market Development Cooperator program (FMD) and the Market Access Program (MAP). In addition, FAS sponsors the United States' participation in severe major trade shows and a number of industry exhibitions overseas each year.
International trade policy
FAS coordinates and directs USDA's international trade agreement programs and negotiations, working closely with the U.S. Trade Representative's office. International trade policy experts within FAS help identify—and work to reduce—foreign trade practices that discourage U.S. farm exports.
Statistics and market information
FAS collects global crop and livestock production data and import/export information from its attaches, ag traders, remote sensing systems and other sources. FAS uses this information to prepare production forecasts and assess export marketing opportunities, as well as track changes in policies affecting U.S. agricultural exports and imports. FAS publishes nearly 200 commodity reports per year that present a world picture of production, consumption and trade flows for about 100 crop and livestock commodities. These reports and much more information are just a click away through the FAS homepage at http://www.fas.usda.gov
Commercial export financing
FAS provides exporters with short and intermediate-term commercial financing support through Commodity Credit Corporation export credit guarantee programs. These programs protect U.S. exporters or financial institutions against risk if an importer's foreign bank fails to make payment. The GSM-102/103 programs are designed to expand and maintain foreign markets for U.S. agricultural commodities, and may help developing nations make the transition from concessional financing to cash purchases.
The Supplier Credit Guarantee Program guarantees payments on promissory notes from importers for a percentage of the face value up to 180 days. And the Facility Guarantee Program provides payment guarantees to facilitate the financing of manufactured goods and services exported from the United States to improve or establish agriculture-related facilities in emerging markets.
The United States is one of the world's largest food-aid donors. Over the years, donated U.S. food has often meant life or death to victims of earthquakes, floods, droughts and civil strife. The administration of U.S. food aid programs is shared by the U.S. Department of Agriculture (USDA) and the Agency for International Development (USAID). USDA has available three channels for providing food aid: the Public Law 480, Title I program, the Food for Progress program (FFP), and the Section 416(b) program.
International cooperation and development activities enhance the competitiveness of U.S. agriculture and preserve natural resource systems. These efforts help U.S. agriculture gain access to emerging technologies and international research, both of which are critical to creating new products, practices and markets. FAS also shares U.S. agricultural knowledge and assists low- and middle-income countries in building stable economies to battle hunger and poverty while increasing their imports of U.S. agricultural products. FAS collaborates with USAID, other government agencies, foreign governments, international organizations, universities and the private sector to achieve these goals.
For more information about FAS and its multi-faceted programs, visit its website at: http://www.fas.usda.gov , or contact the Office of Outreach at 202-720-7420, fax 202-205-9728 or e-mail at email@example.com.
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