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View Title 3 of the Farm Bill

TITLE III. Agricultural Trade And Aid

A. Agricultural Export Assistance Programs

The Farm Security and Rural Investment Act of 2002 (FSRIA) makes some changes to existing agricultural trade programs and creates a few new programs.

Market Access Program (MAP). MAP encourages a public/private partnership to create, maintain, and expand foreign markets for U.S. agricultural, fishery, and forestry products. The partnership shares costs of eligible overseas marketing and promotional activities.

· Minimum funding levels will increase yearly from the current $90 million to $200 million by 2006.

· Equal consideration will be given to past program participants, as well as new ones for funding made available in excess of $90 million each year.

· Equal consideration will be given to proposals for activities in emerging markets, as well as all other markets for funding made available in excess of $90 million each year.

Export Enhancement Program (EEP). The EEP permits USDA to provide bonuses to make U.S. commodities more competitive, offsetting adverse effects of unfair trade practices or subsidies.

· Maximum funding for EEP is extended through 2007 at current funding levels of $478 million per year.

· The definition of unfair trade practices is expanded to include trade distorting subsidies, trade barriers such as labeling that restrict new technologies, unjustified sanitary and phytosanitary restrictions, and monopolistic state trading enterprises implementing non-commercial pricing practices.

Dairy Export Incentive Program (DEIP). Extended through 2007, DEIP helps exporters of U.S. dairy products meet prevailing world prices and develop foreign markets for targeted products. The DEIP operates on a bid bonus system with cash bonus payments.

Foreign Market Development Cooperator Program (FMD). FMD provides cost-share assistance to eligible nonprofit agricultural trade organizations to conduct approved international market development activities.

· FMD is authorized through 2007.

· Funding of $34.5 million will be made available from the Commodity Credit Corporation (CCC) each fiscal year, up from $27.5 million.

· Equal consideration will be given to past program participants and new ones for funding made available in excess of $27.5 million.

· Equal consideration will be given to proposals for activities in emerging markets as well as all other markets for funding made available in excess of $27.5 million.

· The FSRIA stipulates the continuing significance of exporting value-added agricultural commodities to emerging markets.

· USDA shall submit an annual report to Congress describing the amount of funding provided, the types of programs funded, the value-added products that have been targeted and the foreign markets that have been developed for those products.

Export Credit Guarantee Program. Through 2007, the CCC must make available minimum funding of $5.5 billion yearly for the Export Credit Guarantee programs. The short-term (GSM-102) and intermediate-term (GSM-103) credit programs guarantee repayment of credit extended by U.S. financial institutions to eligible foreign banks that issue letters of credit in connection with agricultural commodities.

Supplier Credit Guarantee Program. This program encourages U.S. exporters to expand, maintain, and develop markets for U.S. agricultural products in areas where commercial financing may not be available without a CCC payment guarantee.

· Short-term credits terms have been increased from 180 to 360 days, subject to appropriations needed to cover the longer term.

Promotion of Agricultural Exports to Emerging Markets. Extended through 2007, the program requires that $1 billion of direct credits or credit guarantees be made available for exports to emerging markets and funding for the Emerging Markets Program at $10 million annually.

Technical Assistance for Specialty Crops.

· This new program will provide assistance through public and private sector proposals to address unique barriers that restrict U.S. specialty crop exports.

· Funding is $2 million per year through the CCC.

· This new program authorizes USDA to provide quick response intervention on biotechnology, food safety, disease, and SPS issues and to develop protocols as part of bilateral negotiations with other countries on issues such as animal health, grain quality, and genetically modified commodities.

· Assistance may also be carried out under the Emerging Markets Program or the Cochran Program.

· The authorized funding of $6 million annually must be appropriated.

Exporter Assistance Initiative.

· This new initiative authorizes USDA to maintain a Website on the Internet to assist exporters and potential exporters of U.S. agricultural commodities with information on legal, regulatory, and other federal laws and regulations that impact an export transaction.

The FSRIA specifies two reports to Congress by the Secretary:

· The Secretary shall report to Congress one year after enactment on the feasibility of a program that would charge fees for services performed outside the United States beyond those already provided by the Foreign Agricultural Service.

· Within six months after enactment and every two years thereafter, the Secretary will consult with Congress on formulating and implementing a global market strategy that identifies growth opportunities in foreign markets for agricultural exports.

The FSRIA concludes with Congress noting the past successes of U.S. foreign assistance in encouraging democracy in developing nations and creating U.S. commercial customers. It urges an increased role for such programs in impoverished countries with disadvantaged populations. In addition, it is the sense of the Senate that in all agricultural trade negotiations, the United States seek to achieve fairer and more open conditions of agricultural trade in bulk and value-added commodities.

FAS Implementation of the Farm Bill.

FASonline, the Foreign Agricultural Service's Web site.

Analysis of the Farm Bill 2002 trade provisions by USDA's Economic Research Service.