NAWG, U.S. Wheat Associates and 17 other agriculture organizations have written Sec. of Agriculture Tom Vilsack urging additional GSM-102 export credit allocations be made available to foreign buyers by USDA’s Foreign Agricultural Service (FAS).
In a letter sent last week, the groups say they believe the immediate release of additional guarantees under the GSM-102 program will result in increased U.S. farm exports, boost the farm economy and save jobs in rural America.
Nearly five months into the program’s fiscal year, USDA has released only $1.2 billion of the $5.5 billion in GSM-102 export credit guarantees allowed by Congress in fiscal year (FY) 2010. In FY 2009, USDA issued $5.3 billion in export credit guarantees, yet demand continues to outstrip supply in the program due to continued economic challenges around the world.
The groups said, in part: “With credit markets still fragile, many would-be importers of U.S. farm products are awaiting the release of additional GSM guarantees before entering into transactions with U.S. exporters… The same very difficult global credit markets that existed at the time of the release of the $1.2 billion in guarantees persist for many importers.”
The groups also told Vilsack that further utilizing the GSM-102 program would support the Obama Administration’s National Export Initiative, announced in the State of the Union. The GSM-102 program guarantees credit extended by the private banking sector in the U.S. or by the U.S. exporter to approved foreign banks for purchases of U.S. food and agricultural products by foreign buyers. In order to comply with WTO guidelines, the GSM-102 program was reformed in the 2008 Farm Bill and now operates at no net cost to the federal government.