Editors, Progressive Farmer
Senators from major farm states have petitioned the U.S. government to beef up the U.S. export credit program. Sen. Tom Harkin (D-IA) and Max Baucus (D-MT) have asked Secretary of Agriculture Ann Veneman and Treasury Secretary Paul O'Neil to reject proposals they say would weaken USDA's export credit guarantee program during upcoming international economic talks in Paris.
"Considering the huge advantage the European Union already has over the U.S. in subsidizing agricultural trade, it would be unwise for the U.S. to make unilateral concessions that can only diminish our ability to compete with European ag exports," said Harkin.
The availability of export credits is a concern for the U.S. Wheat Associates, the export promotion arm of the U.S. wheat industry. In Indonesia, for example, near-record imports of 737,000 metric tons of U.S. wheat are expected to be purchased by millers in that large Asian nation of 204 million people. But much of those purchases come through the USDA GSM guaranteed credit program.
"U.S. Wheat Associates is concerned, however, that the full GSM allocation will be used up during the first six months of the fiscal year, and additional allocations might not be available, thus forcing the Indonesian mills to look to alternative origins for their wheat import needs," says the group's president, Alan Tracy.
U.S. Wheat Associates says it will continue working to increase the credit allocations. The group notes that GSM credit totals $3.8 billion but only costs the federal government $200 million/year. By contrast, the European Union spends $6 billion a year on direct export subsidies.:
