RL33553
Agricultural Export and Food Aid Programs
January 17, 2008
Download Locations
Summary
The U.S. Department of Agriculture (USDA) administers programs to promote agricultural exports and to provide food aid, all currently 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 activities expires with the 2002 farm bill in 2007, and the 110th Congress has been deliberating a new farm bill. USDA's direct export 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. Export subsidies, but not other U.S. export and food aid programs, are subject to reduction commitments agreed to in multilateral trade negotiations. Export market development programs include the Market Access Program (MAP) and the Foreign Market Development or "Cooperator" Program (FMDP). Although criticized by some as corporate welfare, these programs are considered to be non-trade-distorting by the World Trade Organization (WTO) and are exempt from multilateral spending constraints. The FSRIA authorizes MAP spending of $200 million annually in FY2006 and FY2007 and sets FMDP spending at $34.5 million annually through FY2007. 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 2002 farm bill 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, also can provide surplus commodities for donation overseas. Average annual spending on food aid under the 2002 farm bill has been $2.2 billion. Global food emergencies are putting pressure on the ability of food aid providers, including the United States, to meet estimated needs. Increased allocations of U.S. food aid for emergency relief has reduced the volume of food aid available for development projects. The administration announced its proposals for farm bill program changes on January 31, 2007. The House and Senate have each approved their respective versions of a new farm bill, and conference deliberations are expected as Congress reconvenes for the second session of the 110th Congress. The President has threatened to veto the legislation because of disagreement with Congress over tax and spending provisions. The President signed the Consolidated Appropriations Act of 2008 (P.L. 110-161), which includes funding for USDA's international activities for the current fiscal year and an extension of 2002 farm bill programs, including export and food aid programs, through March 15, 2008.
