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[Agriculture Fact Book 98]
The Farm and Foreign Agricultural Services mission area includes three agencies: the Farm Service Agency (FSA), the Foreign Agricultural Service (FAS), and the Risk Management Agency (RMA). This mission area serves production agriculture, helping to keep America’s farmers and ranchers in business as they face the uncertainties of weather and markets.
These agencies deliver commodity, credit, conservation, and emergency assistance programs that help improve the stability and strength of the agricultural economy, expand overseas markets for U.S. agricultural products, and promote world food security. They also sanction the provision by the private sector of a broad-based crop insurance program and other risk management tools.
The ongoing evolution of the Farm and Foreign Agricultural Services mission area, through reorganization, crop insurance reform, and farm program changes, has profoundly altered the way it operates. The Federal Agriculture Improvement and Reform Act of 1996 replaced the traditional Federal role in some farm programs with the economic forces of the marketplace. The management of risk in this volatile setting has moved more fully to an emerging partnership between Government and the private sector.
The public interest calls for a dynamic, efficient agriculture that provides a sustainable, safe, and affordable food and fiber supply. The challenge is to serve this public interest at a time of diminishing resources and a decreased role for the Federal Government.
The FSA mission is to ensure the well-being of American agriculture and the American public through efficient and equitable administration of agricultural commodity, farm loan, conservation, environmental, emergency assistance, and domestic and international food assistance programs.
The FSA home page can be found at http://www.fsa.usda.gov
FSA is a customer-driven agency with a diverse and multitalented work force, empowered and accountable to deliver programs and services efficiently, and dedicated to promoting an economically viable and environmentally sound American agriculture.
FSA was established when USDA was reorganized in 1994, incorporating programs from several agencies, including the Agricultural Stabilization and Conservation Service, the Federal Crop Insurance Corporation (now a separate Risk Management Agency), and the Farmers Home Administration. Though its name has changed over the years, the agency’s relationship with farmers dates back to the 1930's.
At that time, Congress set up a unique system under which Federal farm programs are administered locally. Farmers who are eligible to participate in these programs elect a three- to five-person county committee that reviews county office operations and makes many of the decisions on how to administer the programs. This grassroots approach gives farmers a much- needed say in how Federal actions affect their communities and their individual operations. After more than 60 years, it remains a cornerstone of FSA’s efforts to preserve and promote American agriculture.
The 1996 Act, which became law April 4, 1996, significantly changed U.S. agricultural policy by removing the link between income support payments and farm prices. Farmers who participated in the wheat, feed grains, cotton, and rice programs in any one of the previous 5 years could enter into 7-year production flexibility contracts and receive a series of fixed annual “transition payments.” These payments are independent of farm prices and specific crop production, in contrast to the past, when deficiency payments were based on farm prices and the production of specific crops.
The Federal Government no longer requires land to be idled, nor does it deny payments if farmers switch from their historical crops. The contract, however, requires participating producers to comply with existing conservation plans for the farm, wetland provisions, and planting flexibility provisions, and to keep the land in agricultural uses.
The law provided for a one-time signup, which ended August 1, 1996, for producers to enter into production flexibility contracts. There will be no additional signups except for land coming out of the Conservation Reserve Program. Farmers who entered into a contract are also eligible for market transition loans at local FSA offices.
FSA administers commodity loan programs for wheat, rice, corn, grain sorghum, barley, oats, oilseeds, tobacco, peanuts, upland and extra-long-staple cotton, and sugar.
The agency provides the operating personnel for the Commodity Credit Corporation (CCC), which provides assistance with respect to products of certain agricultural commodities through loans and purchases. This provides farmers with interim financing and helps maintain balanced and adequate supplies of farm commodities and their orderly distribution throughout the year and during times of surplus and scarcity. Instead of immediately selling the crop after harvest, a farmer who grows an eligible crop can store the produce and take out a “nonrecourse” loan for its value, pledging the crop itself as collateral. Nonrecourse means that the producer can discharge debts in full by forfeiting or delivering the commodity to the Government.
The nonrecourse loan allows farmers to pay their bills and other loan payments when they become due, without having to sell crops at a time of year when prices tend to be at their lowest. Later, when market conditions are more favorable, farmers can sell crops and repay the loan with the proceeds. Or, if the prevailing price of the crop remains below the loan level set by CCC, farmers can keep loan proceeds and forfeit the crop to CCC instead. The repayment rate may also be replaced by USDA to minimize the costs of storing commodities and to allow commodities produced in the United States to be marketed freely and competitively, both domestically and internationally.
CCC loan rates are designed to keep crops competitive in the marketplace. A producer must have entered into a production flexibility contract to be eligible for nonrecourse marketing assistance loans for wheat, feed grains, rice, and upland cotton. Any production of a contract commodity by a producer who has entered into a production flexibility contract is eligible for loans.
Nonrecourse loans are also available for oilseeds, tobacco, peanuts, extra-long-staple cotton, raw cane sugar, and refined beet sugar, regardless of whether the producer has entered into a production flexibility contract. Price support for the marketing quota crops--tobacco and peanuts--is made available through producer loan associations. By law, these programs must operate at no net cost to the U.S. Treasury, and no-net-cost and marketing assessments are applied to both producers and purchasers.
If the tariff rate quota (TRQ) on imported sugar exceeds 1.5 million tons, sugar loans are nonrecourse. If the TRQ is less than that amount, sugar loans are recourse, which means borrowers cannot necessarily discharge their debts in full by simply forfeiting the commodity to the Government.
Forfeitures under nonrecourse commodity loan programs are not the only means by which CCC acquires inventory. Under the dairy price support program, CCC buys surplus butter, cheese, and nonfat dry milk from processors at announced prices to support the price of milk. These purchases help maintain market prices at the legislated support level. The 1996 Act eliminates dairy price support after December 31, 1999.
CCC can store purchased food in over 10,000 commercial warehouses across the Nation approved for this purpose. However, commodity inventories are not simply kept in storage. FSA employees work to return stored commodities to private trade channels. At the agency’s Kansas City Commodity Office in Kansas City, Missouri, FSA merchandisers regularly sell and swap CCC inventories using commercial telecommunications trading networks.
Beyond the marketplace, CCC commodities fill the need for hunger relief both in the United States and in foreign countries. FSA employees work closely with USDA's Food and Nutrition Service to purchase and deliver foods for the National School Lunch and many other domestic feeding programs. When donated to "Food for Peace" and programs administered by voluntary organizations, these U.S. farm products and foods help USDA fight hunger worldwide.
The noninsured crop disaster assistance program (NAP) protects growers of many crops for which Federal crop insurance is not available (see Risk Management Agency). In addition, losses resulting from natural disasters not covered by the crop insurance policy may also be eligible.
NAP assistance is available for crops grown commercially for food and fiber. Floriculture, ornamental nursery products, Christmas tree crops, turfgrass sod, seed crops, aquaculture, and industrial crops are also included.
A NAP crop is eligible when the expected “area yield” for the crop is reduced by more than 35 percent because of a natural disaster. In addition to other criteria, a NAP area must include, at least, five producers of approved crops on separate and distinct farms.
To be eligible for NAP, producers must annually file an acreage and production report with the local FSA office. If a farmer does not report acres and yields by the yearly deadline, NAP assistance may be withheld following a major crop loss.
FSA provides emergency loans to help cover production and physical losses in counties declared disaster areas by the President or designated by the Secretary of Agriculture or the FSA Administrator (physical loss loans only). Emergency loans also are available in counties contiguous to such disaster areas. These loans are made to qualifying established family farm operators. Loans for crop, livestock, and non-real-estate losses are normally repaid in 1 to 7 years, and in special circumstances, up to 20 years. Loans for physical losses to real estate and buildings are normally repaid in 30 years, and in special circumstances, up to 40 years.
In the aftermath of a natural disaster, FSA makes available a variety of emergency assistance programs to farmers in counties that have been designated or declared disaster areas.
FSA has several programs that are activated, usually by congressional action, during certain types of disasters. Among these are the Tree Assistance Program, which provides payments to eligible tree and vineyard growers who incurred losses due to natural disasters, including losses caused by freeze, excessive rainfall, floods, drought, tornado, and earthquakes.
Another such program, the Livestock Indemnity Program, helps livestock producers who suffered losses from recent natural disasters. It provides a partial reimbursement to eligible producers for livestock losses.
In the event of a national emergency, FSA is responsible for ensuring adequate food production and distribution, as well as the continued availability of feed, seed, fertilizer, and farm machinery.
The Emergency Conservation Program provides emergency cost-share funding for farmers to rehabilitate farmland damaged by natural disasters that create new conservation problems which, if not treated, would:
The assistance may be used for: removing debris from farmland; grading, shaping, and re- leveling farmland; restoring livestock fences; and restoring irrigation structures.
| Indiana Youth Loan Program A Honey of a Success Story FSA Staff to the Rescue
FSA is always standing by, waiting to help U.S. farmers and ranchers survive disasters and return to productivity. |
FSA offers direct and guaranteed farm ownership and operating loan programs to farmers who are temporarily unable to obtain private, commercial credit and who meet other regulatory criteria. Often, these are beginning farmers who cannot qualify for conventional loans because they have insufficient net worth. The agency also helps established farmers who have suffered financial setbacks from natural disasters, or whose resources are too limited to maintain profitable farming operations.
Under the guaranteed farm loan program, the agency guarantees loans made by conventional agricultural lenders for up to 95 percent of principal, depending on the circumstances. The lender may sell the loan to a third party; however, the lender is always responsible for servicing the loan. All loans must meet certain qualifying criteria to be eligible for guarantees, and FSA has the right to monitor the lender’s servicing activities. Farmers interested in guaranteed loans must apply to a conventional lender, who then arranges for the guarantee.
For those unable to qualify for a guaranteed loan, FSA also lends directly. Direct loans are made and serviced by FSA officials who also provide borrowers with supervision and credit counseling. Funding authorities for direct loans are limited, and applicants may have to wait until funds become available. To qualify for a direct farm ownership or operating loan, the applicant must be able to show sufficient repayment ability, pledge enough collateral to fully secure the loan, and meet other regulatory criteria.
The Conservation Reserve Program (CRP) protects our most fragile farmland by encouraging farmers to stop growing crops on highly erodible and other environmentally sensitive acreage. In return for planting a protective cover of grass or trees on vulnerable property, the owner receives a rental payment each year of a multiyear contract. Cost-share payments are also available to
help establish permanent areas of grass, legumes, trees, windbreaks, or plants that improve water quality and give shelter and food to wildlife.
In the 16th CRP signup, held in 1997, 5.9 million acres of land were accepted into the program. The acreage USDA accepted into the CRP will allow for the restoration of more than 300,000 acres of wetlands and protective upland areas, 57,000 acres of rare and declining habitat, 150,000 acres of trees, and 3 million acres in high-priority conservation areas.
A new conservation program, the Conservation Reserve Enhancement Program, is part of the CRP. This program shields millions of acres of American topsoil from erosion by encouraging the planting of protective vegetation. By reducing wind erosion as well as runoff and sedimentation, it also protects air and groundwater quality and helps improve countless lakes, rivers, ponds, streams, and other bodies of water.
State governments have the opportunity to participate in this groundbreaking environmental improvement effort. USDA provides incentives to agricultural producers to participate, while State governments contribute specialized local knowledge, technical help, and financial assistance. The result is an environmental enhancement effort tailored to the specific environmental needs of each State.
FSA works with USDA’s Natural Resources Conservation Service and other agencies to deliver other conservation programs, including the Environmental Quality Incentives Program (EQIP). EQIP helps farmers and ranchers improve their property to protect the environment and conserve soil and water resources. Participants can take advantage of education in new conservation management practices, technical support, cost-share assistance, and incentive payments.
The Foreign Agricultural Service (FAS) represents the diverse interests of U.S. farmers and the food and agricultural sector abroad. It collects, analyzes, and disseminates information about global supply and demand, trade trends, and emerging market opportunities. FAS seeks improved market access for U.S. products and implements programs designed to build new markets and to maintain the competitive position of U.S. products in the global marketplace.
The agency’s mission is to serve U.S. agriculture’s international interests by expanding export opportunities for U.S. Agricultural, fish, and forest products and promoting world food security. This mission directly supports USDA’s priority of opening, expanding, and maintaining global market opportunities for agricultural producers. It is accomplished by partnering with other USDA and Federal agencies, international organizations, State and local governments, and the U.S. private sector to level the playing field for U.S. agricultural producers and exporters in the global marketplace and ensure a safe, nutritious, and reliable food supply to consumers worldwide.
FAS also carries out food aid and market-related technical assistance programs, and operates a variety of import and export programs. FAS helps USDA and other Federal agencies, U.S. universities, and others enhance the global competitiveness of U.S. agriculture and helps increase income and food availability in developing nations by mobilizing expertise for agriculturally led economic growth.
Formed in 1953 by executive reorganization, FAS is one of the smaller USDA agencies, with about 900 employees. FAS operates worldwide with staff in more than 75 posts covering more than 130 countries. Washington-based marketing specialists, trade policy analysts, economists, and others back up the overseas staff.
In addition, FAS has four domestic outreach offices that provide a complete range of export services to new-to-export companies and trade organizations, to help expand their business knowledge of export opportunities and USDA export assistance programs.
Roughly 70 percent of the annual FAS budget is devoted to building markets overseas for U.S. farm products. This includes the funding for all FAS trade and attache offices overseas, as well as the agency’s work with U.S. commodity associations on cooperative promotion projects. The remaining funds cover other trade functions, including gathering and disseminating market information and trade policy efforts. To get a complete picture of the services offered and information available for exporters, FAS invites you to visit its homepage at: http://www.fas.usda.gov
U.S. agricultural, fishery, and forest product exports totaled $67.4 billion in FY 1997, down $2.3 billion or 3 percent from the record set a year earlier. Many factors affect trade. The most important of these are economic growth, currency exchange rates, weather and crop conditions, barriers to market access, changing consumer lifestyles and food preferences, national support programs, and public and private market promotion efforts.
Agricultural, fishery, and forest product exports are vitally important to the Nation's economy. Exports provide expanded market opportunities and better incomes for agricultural producers, fishery and forest product harvesters, food processing companies, and associated manufacturing, financing, marketing, and transportation firms. Agricultural exports also enhance the Nation’s ability to make efficient use of land, labor, and capital resources, and this efficiency increases the United States’ comparative advantage in agricultural production.
U.S. agricultural exports alone (excluding fish and forest products) totaled $57.3 billion and created an estimated 974,000 full-time jobs in FY 1997, roughly 17,000 jobs for every $1 billion in products shipped. Many of these jobs were created off the farm. About 362,000 workers, or 10 percent of the U.S. farm labor force, produce agricultural goods for foreign markets. However, beyond farms and ranches, another 612,000 people in rural and urban areas work to process, package, store, market, finance, and ship agricultural exports. USDA economists calculate that, at the very least, each dollar earned from agricultural exports stimulates another $1.32 in business activity for the economy. In FY 1997, U.S. agricultural exports generated $76 billion in additional economic activity.
Agricultural products can be classified as bulk, intermediate, or consumer-oriented. Bulk commodities are essentially unprocessed, such as wheat, corn, soybeans, cotton, and tobacco leaf. Intermediate agricultural products (such as feeds and fodder, wheat flour, vegetable oils, and animal hides) receive some processing, but generally are not ready for final consumption. Consumer-oriented agricultural products include retail foods and beverages that have undergone various degrees of processing, as well as unprocessed products--such as fresh fruits and vegetables--that have relatively high per-unit values due to higher transportation, handling, or storage costs.
U.S. agricultural exports turned in a mixed performance in FY 1997. Value-added intermediate and consumer food export value rose, while bulk commodity sales fell. Intermediate and consumer-oriented products scored another record year.
In FY 1997, U.S. exports of bulk agricultural commodities fell to $24.1 billion, down $4.6 billion from the year before. Increased competition and lower prices in the grain markets accounted for most of the decline. Wheat exports fell to $4.1 billion (down 40 percent) while coarse grain shipments fell to $6.9 billion (down 26 percent).
U.S. exports of intermediate agricultural products rose to a record $12.3 billion in FY 1997, up $1.4 billion. Rising sales of soybean meal (up 34 percent) and soybean oil (up 137 percent) accounted for most of the gain.
U.S. exports of consumer-oriented agricultural products set another record in FY 1997, with $20.8 billion in sales, up 4 percent from the record set just the year before. Snack foods, breakfast cereals and pancake mix, meats, dairy products, eggs and egg products, fruits and vegetables, juices, wine and beer, nursery products, and pet foods all set export records.
Fishery product exports dropped 6 percent to $2.7 billion in FY 1997. Forest product exports rose 5 percent to a record $7.5 billion.
U.S. exports of agricultural, fish, and forest products are shipped worldwide. The top 10 markets for these exports accounted for three-quarters of total U.S. exports in FY 1997. These markets were Japan, the European Union (EU), Canada, Mexico, South Korea, Taiwan, China, Hong Kong, the Russian Federation, and the Philippines.
U.S. fish and forest product exports are more highly concentrated among fewer markets. The top five markets for U.S. fishery product exports--Japan, Canada, the EU, South Korea, and China--accounted for 90 percent of those exports in FY 1997. As for forest product exports, Japan, Canada, the EU, South Korea, and Mexico accounted for 86 percent of sales.
The United States ranks among the world's largest importers of agricultural, fish, and forest products, along with the European Union and Japan. However, agricultural products make up only a small portion of total U.S. merchandise imports. In FY 1997, the record $55.5 billion total in U.S. purchases of foreign agricultural, fish, and forest products accounted for only 8 percent of all U.S. merchandise imports.
Imports provide consumers with products that are either not produced or not available in sufficient quantities in the United States. Examples of major imported agricultural products include tropical spices, teas, cocoa, coffee, bananas, and rubber. Domestic production of certain other agricultural products is insufficient to meet year-round U.S. demand. This list includes certain cheeses, olives, olive oil, wool, lumber, shrimp, tuna, and tobacco. Seasonal items, such as fresh and processed fruits and vegetables, are imported during periods when U.S. production cannot fill domestic demand.
Agricultural, fish, and forest product imports provide U.S. consumers with a wider variety of lower-priced goods than would be available solely from the domestic market. Many of these products are used to manufacture high-value foods, beverages, and industrial products. Imports also support domestic jobs in the storage, processing, and distribution industries. U.S. imports provide foreign countries with needed foreign exchange which, in turn, can be used to purchase U.S. products.
Agricultural imports can be divided into three main categories based on level of processing and end-market use: bulk commodities, intermediate products, and consumer-oriented products.
Bulk commodity imports for FY 1997 totaled $8.7 billion, up 14 percent from the previous year. Intermediate products rose 6 percent to $6.8 billion. Consumer-oriented imports rose 10 percent to a record $20 billion, with gains in most major product groups. Fish and seafood rose 12 percent to $7.3 billion, and forest product imports rose 16 percent to a record $12.8 billion.
Although the United States imports products from around the world, the top 10 country suppliers provided 63 percent by value of all U.S. agricultural, fish, and forest product imports in FY 1997. Purchases from Canada rose to a record $17.9 billion, up 13 percent from a year earlier. Major imports from Canada included lumber, panel products, cattle, and red meats. Purchases from Mexico rose 7 percent to a record $4.8 billion, with shipments of fresh vegetables, cocoa beans, tea, lumber, fresh fruits, snack foods, and beer. Indonesia, Italy, Colombia, Chile, France, and China also posted records.
Data and analysis on U.S. agricultural exports are available through the FAS Home Page on the Internet: http://www.fas.usda.gov
FAS works closely with other government agencies, including the Office of the U.S. Trade Representative (USTR), to ensure that the trade interests of U.S. producers and processors are protected. For example, FAS played an instrumental role in ensuring that the Uruguay Round trade agreement, signed in 1994, led to lower tariffs and elimination of import bans on agricultural products in over 130 countries. The final agreement also included disciplines on quarantine restrictions, export subsidies, and trade-distorting production subsidies. FAS’s trade policy focus now is to monitor and enforce this agreement and others, such as the North American Free Trade Agreement (NAFTA), and to prepare for the next round of global multilateral negotiations based on the success of the Uruguay Round.
The vast majority of the thousands of individual commitments made by our trading partners are being implemented faithfully and on time. To ensure that commitments are fulfilled, FAS works with all interested parties to help identify apparent violations and address them at the appropriate level. In addition to working with the USTR, FAS works closely with agencies such as USDA’s Animal and Plant Health Inspection Service (APHIS), to field a team with the technical experience needed to resolve problems.
In the past year, for example, the U.S. trade policy team ensured that the Philippines would import pork and poultry, that Korea would open its market for oranges, and that most countries would not block imports of wheat after karnal bunt was discovered on wheat from Arizona and New Mexico. These and many other issues were resolved without initiating a formal World Trade Organization (WTO) legal process, but rather by using bilateral consultations and regular meetings of the WTO. Through the WTO dispute settlement process, the team also won a formal dispute against the European Union regarding its ban on imports of most beef from the United States.
USDA administers a number of foreign food assistance programs in conjunction with the U.S. Agency for International Development. Within USDA, the Foreign Agricultural Service is the leader in developing and executing these programs and initiatives.
For FY 1998, commodity funding available for food aid under Pub. L. 83-480 (P.L. 480) programs totals $818 million, including $295 million for Title I credit sales (including Title I/Food for Progress), $500 million for Title II donations (including Title II/World Food Program), and 23 million for Title III.
Under Title I credit sales, accomplishments in FY 1997 included continuing support for ongoing market development and humanitarian efforts. For example, USDA used the P.L. 480 Title I program to leverage the reduction of Cote d’Ivoire’s tariff on brown rice from 15 percent to 5 percent and paddy rice from 10 percent to zero. The reduction is expected to result in increased commercial sales of U.S. rice. USDA also introduced a Title I-funded Food for Progress program in Mongolia. This program provided wheat to Mongolia when there was a shortage in local production due to drought and fires.
Under Title II emergency and private assistance donations program, administered by the U.S. Agency for International Development (USAID), $28 million can be provided as overseas administrative support. For FY 1998, commodities valued at approximately $500 million are planned for donations under Title II, including Title II donations through the World Food Program.
Accomplishments under the Title II program include: the implementation of activities by CARE and “Projects in Agriculture, Rural Industry, Science and Medicine, Inc./Peru (PRISMA),” which include health and nutrition interventions, micro-enterprise development, and agricultural productivity; CARE in Bangladesh to improve infrastructure, including road improvements that have led to increased commerce; and development activities in Ethiopia, including agricultural and credit and savings programs.
The Title III Food for Development program, administered by USAID, provides government-to-government grant food assistance to least-developed countries. Local sales proceeds can be used to support a variety of economic development and related activities in recipient countries. For FY 1998, commodities valued at $23 million are planned for donation under Title III.
Accomplishments under the Title III program include the use of Title III proceeds in Bolivia to finance agricultural research, extension, credit, and marketing services, and to help finance the country’s successful immunization program. In Ethiopia, Title III multi-year activities support agricultural policy reforms designed to reduce government interventions. In Eritrea, Title III sales proceeds helped support the Government’s rural roads, improving market access to agricultural inputs and products.
Another program, Food for Progress, is carried out using commodities or funds of the Commodity Credit Corporation (CCC) or funds appropriated under Title I, P.L. 480. The program, administered by USDA, provides commodities to needy countries as a reward for undertaking economic or agricultural reform. The Food for Progress program can provide assistance in the administration, sale, and monitoring of food assistance programs to strengthen private sector agriculture in recipient countries.
FY 1998 Food for Progress bilateral agreements using the Title I funding are planned with Albania, Bangladesh, Bosnia-Herzegovina, Kyrgyzstan, Mongolia, Mozambique, and Tajikistan, totaling about $50 million. In addition, a Food for Progress agreement with a private entity using the Title I funding is planned with Russia totaling about $10 million. Food for Progress programs using CCC funds totaling about $94 million are planned with U.S. private voluntary organizations for projects in 25 countries.
About 250,000 metric tons of U.S. agricultural commodities will be donated to Private Voluntary Organizations and Non-Governmental Organizations in 25 countries in FY 1998.
In May 1998, a first-ever Food for Progress Agreement was signed with Africare, a well- known Private Voluntary Organization, for donation of 12,600 metric tons worth of commodities for South Africa. Under the program (total value worth $12.8 million), Africare will sell the commodities in South Africa and use the proceeds toward development of rural enterprise and agricultural development in economically deprived areas.
The Farmer-to-Farmer Program provides short-term U.S. agricultural technical assistance, on a people-to-people basis, to developing and emerging markets countries worldwide. The program is managed by the Office of Private and Voluntary Cooperation, Bureau for Humanitarian Response at USAID. Since 1992, USAID has provided P.L. 480 funding for farmer-to-farmer activities in the Newly Independent States of the former Soviet Union (NIS). More than 2,700 volunteer assignments have been completed in the 12 NIS countries.
Section 416(b) of the Agricultural Act of 1949 authorizes the donation to needy countries of eligible commodities held by CCC. For FY 1998, there are 10,500 metric tons of nonfortified nonfat dry milk available for programming under this program.
The GSM-102 program guarantees repayment of short-term loans (90 days to 3 years) made by U.S. financial institutions to eligible banks in countries or regions that purchase U.S. farm products.
Under the GSM-102 program in FY 1998, about $5.6 billion worth of guarantees were made available for approximately 93 countries, including 11 regional programs--the Andean, Baltic, Caucasus, Central America, Central Europe, East Africa, East Caribbean, Southeast Europe, Southern Africa, West Africa, and West Caribbean regions.
Use of the GSM program on a regional basis has been successful in providing flexibility for sales to be financed by a creditworthy bank in a third country in the region, and in promoting U.S. agricultural exports to new markets. In the Andean region, use of third-country banks has resulted in increased exports of U.S. agricultural commodities. In FY 1997, USDA established a new GSM-102 regional program in East Africa, supporting first-time sales of U.S. wheat, wheat flour, and white corn to the region. Expansion of the program in Turkey aided in a 600-percent increase in U.S. cotton exports to Turkey in 1997.
Guarantees issued under the GSM-103 program can cover financing periods of more than 3 and up to 10 years. This program is designed to help developing nations make the transition from concessional financing to cash purchases. For FY 1997, credit guarantees were made available for sales to buyers in 34 countries, including regional programs for the Central America and Southern Africa regions.
The Supplier Credit Guarantee Program (SCGP) guarantees repayment of short-term loans (up to 180 days) that exporters have extended directly to importers for the purchase of U.S. agricultural commodities and products. SCGP allocations totaled $293 million in coverage for sales to buyers in 34 countries, including regional programs for the Andean region, the Baltics, Central America, Central Europe, Southeast Asia, and Southeast Europe. Under the announced FY 1998 availability, sales registrations of about $13 million provide coverage to U.S. exporters of goods to Mexico and the Andean, Central American, and Southeast Asian regions.
The program has been targeted at high-value and value-added agricultural products, which are typically sold in smaller sized export transactions. The SCGP has generated significant interest among U.S. exporters and promises to become more widely utilized as the private sector becomes more familiar with it.
The Facility Credit Program extends credit guarantees for export sales of U.S. capital goods and services to improve agriculture-related facilities in emerging markets.
The Export Enhancement Program (EEP), announced by USDA on May 15, 1985, operates under the authority of the Agricultural Trade Act of 1978 (the 1978 Act). The EEP permits CCC to provide cash bonuses to exporters to make U.S. commodities more competitive in the world marketplace and to offset the adverse effects of unfair trade practices or subsidies.
The Federal Agriculture Improvement and Reform Act of 1996 (the 1996 Act) set the maximum amounts that CCC could make available for the EEP as follows: FY 1996, $350 million; FY 1997, $250 million; FY 1998, $500 million; FY 1999, $550 million; FY 2000, $579 million; FY 2001, $478 million; and FY 2002, $478 million. However, for FY 1998, the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1998, limited spending under the EEP to $150 million.
The Dairy Export Incentive Program (DEIP) helps exporters sell certain U.S. dairy products at competitive prices. The DEIP is authorized by the Food Security Act of 1985 (the 1985 Act). The major objective of the program is to develop export markets for dairy products where U.S. products are not competitive because of the presence of subsidized products from other countries.
Section 148 of the 1996 Act amended the 1985 Act to strengthen the DEIP’s focus on market development, with the objective of reaching the volume or spending limits on export subsidies that are consistent with U.S. obligations as a member of the World Trade Organization. The DEIP operates on a bid bonus system, with cash bonus payments.
The Market Access Program (MAP), formerly the Market Promotion Program, is authorized by section 203 of the Agricultural Trade Act of 1978. The MAP is funded at $90 million annually for FY 1996 through 2002 and is designed to encourage the development, maintenance, and expansion of foreign markets for U.S. agricultural commodities. Since its inception, the MAP has provided cost-share funds to approximately 800 U.S. companies, cooperatives, and trade organizations to promote their products overseas.
The Foreign Market Development Program, also known as the “Cooperator Program,” fosters a trade promotion partnership between USDA and U.S. agricultural producers and processors, represented by nonprofit commodity or trade associations called cooperators. Projects generally fall into one of four categories: market research, trade servicing, technical assistance, and consumer promotions for the retail market. The cooperator program has helped support growth in U.S. agricultural exports by enlisting private sector involvement and resources in coordinated efforts to promote U.S. products to foreign importers and consumers around the world.
The Foreign Agricultural Service is also responsible for coordinating, supporting, and delivering a diversified program of international agricultural cooperation and development. Its purpose is to enhance the competitiveness of U.S. agriculture, preserve natural resource ecosystems, and pursue sustainable economic development worldwide by mobilizing the resources of USDA and its affiliates.
Scientific Cooperation
Short-term exchange visits between U.S. and foreign scientists, as well as
longer term collaborative research, focus on minimizing threats to U.S.
agriculture and forestry, developing new technologies, establishing systems to
enhance trade, and providing access to genetic diversity essential to
maintaining crops that are competitive in the world marketplace.
Technical Assistance
Sponsored by such international donor institutions as the USAID, the World
Bank, regional development banks, specialized agencies of the United Nations,
and private organizations, technical assistance programs are designed to
increase income and food consumption in developing nations, help mitigate
famine and disasters, and help maintain or enhance the natural resource base.
Technical assistance is provided in areas such as food processing and
distribution, plant and animal protection and quarantine, soil and water
conservation, and forest management.
Professional Development and Training
Career-related training for foreign agriculturists provides long-term benefits
to economic development, magnifying potential because those who learn teach
others. Working collaboratively with USDA agencies, U.S. universities, and
private sector companies and organizations, FAS designs and implements study
tours, academic programs, and short-term courses and training to meet specific
needs of foreign agriculturists in a variety of areas such as agribusiness,
extension education, natural resources, policy and economics, and human
resource development. The programs help expose senior and mid-level
specialists and administrators from developing, middle-income, and
emerging-market countries to U.S. expertise, goods, and services, in order to
promote broad-based development that is mutually beneficial to continued
scientific, professional, and trade relationships.
International Organization Liaison
FAS serves as a liaison to coordinate and articulate USDA views on a number of
agricultural policy and program issues in international organizations, in order
to promote and enhance the interests of USDA and the U.S. agricultural sector.
The views of diverse USDA agencies are synthesized into one voice, and that
position is then coordinated with other U.S. Government agencies, most
importantly the State Department, and represented in international forums.
Trade and Development Missions
FAS promotes a vital, healthy private agricultural sector at home and abroad by
organizing marketing workshops, in-country technical team visits, and trade
missions that link U.S. and foreign entrepreneurs and help them expand business
and trade opportunities.
The mission of the Risk Management Agency (RMA) is to provide and support cost-effective means of managing risk for agricultural producers in order to improve the economic stability of agriculture. Crop insurance is USDA’s primary means of assisting farmers following a crop loss. For example, in 1997, nearly $24 billion in protection was provided on over 165 million acres through more than 1.1 million policies. Crop insurance helps farmers recover from crop losses, secure operating loans, and market a portion of their crop aggressively.
In 1997, an estimated 70 percent of acreage planted to major crops was insured. Crop insurance coverage is widely available on all major commodities, such as corn, wheat, and cotton. Coverage is also available on a growing number of fruits, nuts, and vegetable crops. Nationally, 80 crops are insurable, though not everywhere they are grown.
To help ensure greater farmer access to this valuable risk management tool, the Federal Crop Insurance Corporation (FCIC) Board of Directors expanded 28 crop programs into an additional 187 counties for the 1999 crop year. This expansion added to the national total of 28,154 county crop programs in 2,983 counties. Further, RMA continues to develop new pilot programs, such as insurance for cabbage, watermelons, and rangeland. By increasing the number and types of insurance plans, the program will help producers to better manage their production risks.
Multiple-Peril Crop Insurance (MPCI) policies insure producers against losses due to unavoidable causes such as drought, excessive moisture, hail, wind, frost, insects, and disease. Indemnities are paid on the difference between what was produced and the “yield guarantee” selected by the producer. Yield guarantees are selected by the producer and represent 50, 55, 60, 65 70, 75, and--for some areas and crops--85 percent of a producer’s actual production history. The prices used to pay losses are between 60 and 100 percent of the commodity price established annually by RMA.
The Group Risk Plan (GRP) policies use a county index as the basis for determining a loss. When the county yield for the insured crop, as determined by the National Agricultural Statistics Service (NASS), falls below the “trigger level” chosen by the farmer, an indemnity is paid. Yield levels are available for up to 90 percent of the expected county yield. GRP protection involves less paperwork and costs less than the farm-level coverage described above. However, individual crop losses may not be covered if the county yield does not suffer a similar level of loss.
Revenue Insurance Plans include three plans: Crop Revenue Coverage, Income Protection, and Revenue Assistance. Revenue policies are different from standard MPCI policies in that they provide farmers with a measure of price risk protection in addition to covering yield loss. Two of the policies, Crop Revenue Coverage and Revenue Assurance, were developed by private-sector insurance companies. The Income Protection pilot was developed by RMA. Essentially, these policies guarantee a level of revenue that is determined differently by each of the policies. Indemnities are paid when any combination of yields and prices results in revenue that is less than the revenue guarantee.
RMA launched an innovative cost-share initiative--the Dairy Options Pilot Program (DOPP)--to help producers create their own financial safety net by purchasing exchange-traded options on the price of their milk. When milk prices fall, producers offset losses based on projected future earnings--in effect, putting a floor under their milk prices.
“The new dairy options pilot program is only one step we are taking to help dairy farmers survive under current farm laws. We think it offers promise to help farmers manage the risk they may face from increased price volatility.”
--Dan Glickman
During each 6- to 8-month round of DOPP, producers in the seven selected pilot States receive training and hands-on experience in trading their options on either the New York Board of Trade or the Chicago Mercantile Exchange. USDA pays up to 80 percent of the options premium costs and a $30 fee for transactions executed under program guidelines.
RMA has intensified its efforts to reach beginning, minority, and limited-resource farmers. Some highlights of these efforts include:
Recent changes to farm policy have increased the risk borne by individual producers. To help them acquire the risk management skills needed to compete and win in the global marketplace, RMA funded over $3 million in educational grants to help farmers and ranchers become active risk managers. The grants support public- and private-sector partnerships working to find improved risk management strategies, develop educational curricula and materials, and train producers and their advisors. The initiative is a cooperative effort by RMA; the Cooperative State Research, Education, and Extension Service; the Commodity Futures Trading Commission; and numerous private-sector agricultural organizations.
“This initiative is vitally important, because producers who do the best job of managing risk will be better prepared to compete in the post-Farm Bill market environment.”
--Dan Glickman
Increasingly, other countries are examining the crop insurance program as an alternative to farm subsidies. RMA regularly meets with representatives from foreign governments and private organizations to explain the U.S. program. This vital outreach, which is primarily educational, is expected to grow in the future.
Farm Service Agency
USDA FSA Public Affairs Staff
1400 Independence Ave., SW
Washington, DC 20250-0506
Telephone: 202-720-5237
Director, Legislative Liaison, Executive Secretariat and Public Affairs Staff
Larry Mitchell
Rm. 3615-S Washington, D.C. 20250-0505
202-720-3865
FAX 202-720-4034
larry_mitchell@wdc.fsa.usda.gov
Chief, Public Affairs Branch
Eric L. Parsons
Rm. 3624-S Washington, D.C. 20250-0506
202-720-7809
FAX 202-690-2828
eric_parsons@wdc.fsa.usda.gov
Section Head, Field Services Section
Gregory J. Hawkins
Rm. 3623-S Washington, D.C. 20250-0506
202-720-8768
FAX 202-690-2828
greg_hawkins@wdc.fsa.usda.gov
Section Head, Communications Services Section
Danniel W. Stuart
Rm. 3631-S Washington, D.C. 20250-0506
202-690-0474
FAX 202-690-2839
dan_stuart@wdc.fsa.usda.gov
FOIA Coordinator
Bonnie Hart
Rm. 3620-S, Washington, D.C. 20250-0506
202-720-5875
FAX 202-690-2828
bonnie_hart@wdc.fsa.usda.gov
--Information on FSA can also be found on the FSA home page at www.fsa.usda.gov
Foreign Agricultural Service
Director, Information Div.
Maureen Quinn
Rm. 5074-S Washington, DC 20250
202-720-7115
FAX 202-720-1727
quinn@fas.usda.gov
Deputy Director
Sally Klusaritz
Rm. 5074-S Washington, DC 20250
202-720-3448
FAX 202-720-1727
klusaritz@fas.usda.gov
Team Leader
Lynn Goldsbrough
Rm. 5713-S Washington, DC 20250
202-720-3930
FAX 202-720-3229
goldsbrough@fas.usda.gov
Team Leader
Judy Goldich
Rm. 5717-S Washington, DC 20250
202-720-0328
FAX 202-720-3229
goldich@fas.usda.gov
Freedom of Info Act Officer
Don Washington
Rm. 5709-S Washington, DC 20250
202-720-3101
FAX 202-720-3229
washington@fas.usda.gov
Risk Management Agency
General Information
RMA Home Page
www.act.fcic.usda.gov
Webmaster: Janet Stevens
202-690-3040
FAX: 202-690-5889
Janet_Stevens@wdc.fsa.usda.gov
Claims
Michael Hand
Claims and Underwriting Division
Rm. 6749-S Washington, DC 20250
202-720-3439
FAX: 202-690-2540
mhand@wdc.fsa.usda.gov
Risk Management Education (RME)
Craig Witt
RME Division
Rm. 6751-S Washington, DC 20250
202-720-4770
FAX: 202-690-3605
cwitt@wdc.fsa.usda.gov
Product Development
Tim B. Witt
Research and Development
9435 Holmes Road
Kansas City, MO 64131
816-926-7394
FAX: 816-926-1803
timothy_witt@RM.fcic.usda.gov
FOIA Officer
Donna Bassett
Appeals, Litigation, and Legal Liaison Staff
Rm. 6704-S Washington, DC 20250
202-690-5701
FAX: 202-690-5890
dbasset@wdc.fsa.usda.gov
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