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• United States Diplomatic Mission to Italy

Summary

The U.S. Department of Agriculture (USDA) operates four kinds of international programs to promote agricultural exports or provide food aid, all authorized in the 2002 farm bill, the Farm Security and Rural Investment Act (FSRIA, P.L. 107-171), or in permanent legislation. These programs include direct export subsidies, export market development, export credit guarantees, and foreign food aid. Legislative authority for most of these programs expires in 2007. Export subsidies, but not other U.S. export and food aid programs, are subject to reduction commitments agreed to in multilateral trade negotiations. USDA's direct subsidies include the Export Enhancement Program (EEP) and the Dairy Export Incentive Program (DEIP). EEP spending has been negligible since 1996, and DEIP spending has been declining since 2002. Market development programs include the Market Access Program (MAP) and the Foreign Market Development or "Cooperator" Program (FMDP). Considered to be non-trade distorting by the World Trade Organization, these programs are exempt from spending constraints agreed to in trade agreements. The FSRIA authorizes MAP spending of $200 million annually by FY2006 and sets FMDP spending at $34.5 million annually. The FSRIA authorizes export credit guarantees by USDA's Commodity Credit Corporation (CCC) of up to $5.5 billion worth of farm exports annually plus an additional $1 billion for emerging markets through 2007. Actual levels guaranteed depend on economic conditions and the demand for financing by eligible countries. The FSRIA also authorizes through FY2007 foreign food aid programs including P.L. 480 Food for Peace, Food for Progress, the Emerson Trust (a reserve of commodities and cash), and a new international school feeding program. Section 416(b), permanently authorized in the Agricultural Act of 1949, can provide surplus commodities for donation overseas. Global food emergencies are putting pressure on the ability of food aid providers, including the United States, to meet estimated needs and reducing food aid available for development projects. Current fiscal year funding for USDA's international activities is estimated at $5.2 billion. The President's FY2007 budget proposal estimates spending for USDA's international activities of $5.3 billion in FY2007. Agricultural export subsidies, export credits, and food aid programs could be affected by the outcomes of on-going multilateral trade negotiations in the Doha Round. These programs will also be debated as Congress considers legislation to replace the 2002 farm bill which expires in 2007. This report, which will be updated, replaces CRS Issue Brief IB98006, Agricultural Export and Food Aid Programs, by Charles E. Hanrahan.

Related Reports:
• RL33553

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