94 



programs and policies. These roles have included: (1) Disposal of 

 commodity surpluses generated by farm programs; (2) partnership with the 

 private sector in foreign market development and export promotion efforts; 

 (3) administration of export programs to achieve goals ranging from 

 marketplace competition to pressuring trading partners to liberalize trade 

 policies and practices; and. (4) reporting of domestic and foreign 

 agricultural trade data. 



The philosophy underljong these various roles was summed up in the Long- 

 Term Agricultural Trade Strategy (LATS) released by USDA in January 1993: 

 "LATS aims at creating an environment where the natural comparative 

 advantages of U.S. agriculture Ccin prevail." While "there is a clear societal 

 consensus that government has a legitimate role in agricultural trade." that 

 role should be defined as "assisting rather than managing trade." 



LATS does not define a middle ground where USDA could participate as a 

 partner with the private sector in developing export strategies to maximize 

 the impact of mutual efforts to expand agricultural exports. According to 

 USDA, "the statute (requiring LATS] contemplates a strategy for the 

 government , not for the private sector." 



The problem with this "hands ofi' approach is that it does not recognize the 

 more aggressive role which governments of our competitors take in 

 promoting exports. The governments of the European Community (EC) and 

 other exporting countries have sophisticated working relationships with 

 their food processing industries which identify and target growth markets 

 for high value products through marketing strategies involving sales and 

 credit incentives as well as promotional activities and market access 

 initiatives. 



From our perspective, the very future of American agriculture and rural 

 development are dependant on an aggressive and effective value added 

 export trade policy that provides the tools to allow U.S. value added and high 

 value products such as vegetable oil, wheat flour, com gluten meal and red 

 meat to compete in foreign markets. Without the implementation of an 

 aggressive value added agricultural product export policy — and if the status 

 quo is allowed to continue — the future of U.S. agriculture will continue to 

 belong to our competition. 



In the absence of a relationship setting similar priorities established and 

 using aggressive marketing efforts planned and implemented jointly by 

 government and industry, the U.S. will continue to trail its competitors in 

 economically potent and fast-growing value added agricultural markets. The 

 results of the current approach are clearly unacceptable. 



While the U.S. remains the largest world supplier of bulk commodities, this 

 market has remained stagnant at about $60 billion cinnually for over 10 

 years, and is showing signs of actual shrinkage. The U.S. share of value 

 added and high value product trade (including intra-EC) remains at less than 



