STATEMENT OF ROBERT F. SMITH 



BEFORE THE 



HOUSE COMMITTEE ON AGRICULTURE 



FEBRUARY 1, 1993 



Mr. Chairman, I'd like to thank you for calling this hearing to discuss 

 economic conditions for agriculture and rural America. 



It is appropriate at the beginning of each Congress to pause a moment in 

 order to take stock of current conditions and to consider our objectives. And 

 while much of today's hearing will doubtless focus on problems, I would like 

 to be more positive. 



I would like to talk about the Importance of exports to American 

 agriculture and I will use the beef industry as my example. 



Domestic demand for beef has flattened. From a high in 1976 of 88.8 

 pounds per capita, domestic consumption has stabilized at around 64 pounds per 

 capita. While some of the stabilization comes as a result of the checkoff and 

 promotion, it is clear that exports present our best opportunity for growth. 

 This growth is helping to eliminate the traditional cycles that have 

 threatened our Industry for so long. 



The US exports about 5.1 percent of our production. From a value of 

 $500 million in 1980, exports have grown to about $1.7 billion today. If we 

 can sustain this level of international market penetration, beef exports are 

 projected to grow to $4.75 billion by the year 2,000. 



The Japanese Beef & Citrus Agreement taught us the value of export 

 markets in a dramatic way. From being virtually shut out, the US now relies 

 on Japan to purchase 62X of its beef exports. We have achieved the $1 billion 

 mark and are driving towards a $2 billion market share. 



April 1st will mark the beginning of the 6th year of the Beef & Citrus 

 Agreement. Tariffs on beef imports will fall from 70 percent to 50 percent. 

 It is anticipated that negotiations about future tariff discussions will start 

 sometime this year and industry representatives are hopeful that these will 

 prove fruitful. 



The beef agreement negotiated with South Korea in 1989 set import quotas 

 of 52,000 metric tons in 1990, 56,000 metric tons in 1991, and 60,000 metric 

 tons in 1992. They have exceeded this greatly each year, with over 100,000 

 metric tons for 1992. 



Consumer demand has been very high as a result of exposure to American 

 product and domestic production remains inefficient. South Korea remains as a 

 tremendous potential for growth. Talks are scheduled for next month to try to 

 obtain a truly free market. 



