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Indiana is an important producer and exporter of agricultural products. In
20076, the State's cash farm receipts totaled $7.7 billion. Indiana ranked 10th
among all 50 states in 2007, with agricultural exports estimated at $2.4
billion. Agricultural exports help boost farm prices and income, while
supporting about 25,575 jobs both on the farm and off the farm in food
processing, storage, and transportation. Exports remain important to Indiana's
agricultural and statewide economy. Measured as exports divided by farm cash
receipts, the State's reliance on agricultural exports was 31 percent in 2007.
Indiana’s top five agricultural exports in 2007 were:
soybeans and products -- $898 million
feed grains and products -- $824 million
live animals and red meats -- $253 million
poultry and products -- $154 million
wheat and products -- $118 million
World demand for these products is increasing, but so is competition among
suppliers. If Indiana's farmers, ranchers, and food processors are to compete
successfully for opportunities of the 21st century, they need fair trade
and more open access to growing global markets.
How Trade Agreements Benefit Indiana Agriculture
As one of the nation’s leading soybean producers, Indiana benefits under the
Uruguay Round agreement as South Korea reduced its tariffs on soybean oil by
14.5 percent from 1995 to 2004. Thus far, the tariff reduction has supported a
threefold increase in export volume. The Philippines reduced its tariffs on
soybean meal from 10 to 3 percent during the same period. China’s accession to
the WTO has helped to raise our exports of soybeans to that country by over six
fold from 1999 to 2004, surpassing $2.4 billion this year.
Indiana, one of the nation’s largest feed corn producers, benefited under the
NAFTA when Mexico converted its import licensing system for corn to a
transitional tariff-rate quota that will remain in effect until 2008. Under this
system, the volume of U.S. corn exports to Mexico has risen over 42 percent
since 1994, reaching 120 million bushels valued at $585 million in 2002.
Under the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR),
U.S. prime and choice cuts of beef gain preferential access as applied tariffs
of 15 to 30 percent are immediately eliminated (except the Dominican Republic)
while those applied to other cuts are phased-out over 15 years. Tariffs on beef
offal and other beef products are phased out over 5 to 10 years. As part of the
agreement, all six countries are working toward the recognition of the U.S. meat
inspection and certification systems, which would replace the existing policy of
plant-by-plant inspections and approval. From 2001 through 2003, U.S. suppliers
annually shipped on average 4,094 metric tons valued at $9.8 million to all six
countries combined.
Export Success Stories
Since 1998, using Foreign Market Development program funds, the American
Soybean Association has trained Taiwanese tofu and soymilk producers on modern
production and marketing techniques in order to improve the quality and price of
their products for high-end consumers. As a result, there was a 50 percent
growth in the consumption of specialty soybeans between 1997 and 2003.
Currently, there are more than 30 premium soy food shops in Taiwan and they
imported a total of 7,500 MT of containerized specialty soybeans in 2003. These
initiatives also helped preserve wholesome image of soy foods while the
Taiwanese government was instituting labeling requirements for the products of
modern biotechnology. Taiwan currently consumes 250,000 MT soybeans for food
that is equivalent to a market value of $62 million annually. U.S. soybeans make
up almost 98 percent of food soybean market.