USDA: Exports Could Lose Momentum Without Farm Bill

USDA warns that farm bill sluggishness could have impact on ag exports

Published on: Dec 20, 2013

If a new farm bill isn't passed soon, the United States' strong track record of growing agricultural exports could be at stake, USDA Under Secretary Michael Scuse said Thursday.

Scuse, in a USDA press call, explained that without a five-year farm bill, programs like the Market Access Program and Foreign Market Development Programs aren't available. That has a trickle-down effect on the businesses that use those programs to help export agricultural goods – and the towns and local economies that the businesses support.

"The importance of the farm bill cannot be overestimated in terms of our ability to help these smaller companies and the jobs they support in communities, both rural and urban," Tim Hamilton, director of Food Export-Midwest and Food Export-Northeast, explained on the call.

USDA warns that farm bill sluggishness could have impact on ag exports
USDA warns that farm bill sluggishness could have impact on ag exports

The two Food Export Programs help business owners grow exports of U.S. agriculture products through work with the Market Access and FMD programs.

Hamilton said the uncertainty has left American export businesses behind.

"We need to make commitments to retailers to importers, distributors around the world," he said. "Because we haven't had a commitment on the farm bill, unfortunately we haven't been able to make those commitments."

Hamilton likened the feeling to running a business out of a cash box, but not knowing when more money will come in, allowing next steps. That creates uncertainty.

"If you are successful in business you have to plan ahead," Hamilton said. "Our customers just don't understand the challenges we face – previously with the government shutdown and now why we can't answer questions about what our plans will be for 2014."

Dave Ramirez of Trophy Nut, an Ohio-based nut exporter, added that the repercussions for small businesses are steep.

For his company, export sales have grown from $75,000 in 2010 to $3 million currently. And, export sales account for 8.5% of overall sales – the fastest growing area in the company.

According to Scuse, U.S. ag exports in total were valued at $140.9 billion in the last fiscal year. And, for every $1 spent with MAP and FMD, there is a $35 investment.

"We have a need to continue this momentum and we need a farm bill," Scuse said. He said he was optimistic that one would be on the way for January, but for the MAP and FMD, the situation is "critical."

"There is a great deal of competition for these markets, and our competitors are spending a tremendous amount of money to get into some of these markets," Scuse said. "We need these programs, we need the funding for these programs to help our companies, our producers, compete against some pretty stiff competition."