Major Trade Programs
The 2002 Farm Act continued and modified agricultural export
programs designed to develop and expand commercial outlets for
U.S. commodities in world markets and to provide international food
assistance. The act oriented export programs toward greater
market development, with increased emphasis on high-value and value-added
products.
USDA's Foreign Agricultural Service (FAS) administers the export
and food aid programs contained in the Farm Act, except for Titles
II and III of the revised P.L. 480, which are assigned by law to
the Agency for International Development.
Major export programs include:
- Dairy Export Incentive Program offers subsidies to exporters
of U.S. dairy products to help them compete with other subsidizing
nations. The Commodity Credit Corporation (CCC) makes payments
on a bid basis in cash, in kind, or through certificates redeemable
for commodities. The program was originally authorized by the
Food Security Act of 1985 (P.L. 99-198) and reauthorized by the
Food, Agriculture, Conservation, and Trade Act of 1990 (P.L. 101-624). Program
details
- Export Credit Guarantee Program (GSM-102), begun in 1982,
is the largest U.S. agricultural export promotion program. It
guarantees repayment of private, short-term credit for up to 3
years. The 1996 Farm Act continues the authorization for GSM-102,
mandates annual program funding levels for GSM-102 and GSM-103,
and allows flexibility in how much is made available for each
program. Program
details
- Export Enhancement Program (EEP) was initiated in May
1985 under the Commodity Credit Corporation charter to help U.S.
exporters meet competitors' prices in subsidized markets. The
program was formally authorized by the Food Security Act of 1985
(P.L. 99-198). Under the EEP, exporters are awarded generic commodity
certificates or cash payments. The certificates are redeemable
for CCC-owned commodities. The certificates or payments enable
an exporter to sell certain commodities to specified countries
at prices below those of the U.S. market. The 2002 Farm Act caps
EEP expenditures at $478 million per year and allows the Secretary
of Agriculture to target up to $100 million annually for the sale
of intermediate-value products. Program
details
- Intermediate Export Credit Guarantee Program (GSM-103) was established by the Food Security Act of 1985 (P.L. 99-198).
GSM-103 complements the Export Credit Guarantee Program (GSM-102),
but guarantees repayment of private credit for 3 to 10 years.
The 2002 Farm Act continues the authorization for GSM-103, mandates
annual program funding levels for GSM-103 and GSM-102, and allows
flexibility in how much is made available for each program.
- Market Access Program (MAP) is an export promotion program
authorized by the 1996 Farm Act. The MAP is designed to encourage
development, maintenance, and expansion of commercial farm export
markets. The program promotes exports of specific U.S. commodities
or products in specific markets. Under the MAP, eligible participants
receive generic commodity certificates or payments for promotional
activities approved by the Secretary of Agriculture. Participating
organizations include nonprofit trade associations, state regional
trade groups, and private companies. The 2002 Act prohibits direct
assistance for brand promotion to large firms unless they are
agricultural cooperatives. More than 80 percent of MAP funds go
to develop markets for high-value and processed products. Program
details
Food aid programs include:
- Public Law 480 (P.L. 480), the common name for the Agricultural
Trade Development and Assistance Act of 1954 (P.L. 83-480), seeks
to expand foreign markets for U.S. agricultural products, combat
hunger, and encourage economic development in developing countries.
It is also called the Food for Peace Program.
Title I of P.L. 480 makes U.S. agricultural commodities available
through long-term dollar credit sales at low interest rates for
up to 30 years. Title II provides donations for emergency food
relief and nonemergency assistance. Title III authorizes "food
for development" projects. The Food, Agriculture, Conservation,
and Trade Act of 1990 (P.L. 101-624) authorized a new Food for
Development program under Title III that provides government-to-government
grant food assistance to least developed countries. Program
details
- Food for Progress Program (FPP) was originally authorized
under Section 416b of the Agricultural Act of 1949 to provide
commodities to the governments of developing countries and emerging
democracies or to private voluntary organizations to introduce
elements of free enterprise into the countries' agricultural economies.
The 2002 Farm Act extends authority for the FPP. Program
details
- Section 416(b) of the Agricultural Act of 1949 provides
for overseas donations of CCC-owned surplus commodities to friendly
developing countries. Program
details
- Bill Emerson Humanitarian Trust (BEHT)/Food Security Commodity
Reserve. The Africa Seeds of Hope Act of 1998 amended Title
III of the Agricultural Act of 1980 replacing the Food Security
Commodity Reserve and its predecessor, the Food Security Wheat
Reserve, with the Bill Emerson Humanitarian Trust (BEHT). Commodities
authorized for the 4-million-ton reserve have been expanded to
include corn, grain sorghum, and rice in addition to wheat. CCC
is authorized to hold funds as well as commodities in the reserve.
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