95 



10%, even as sharp growth in this sector has overtaken the value of U.S. 

 bulk exports. Critics in the Commerce Department are pointing out that, 

 while USDA gets 80% of export promotion funding, agricultural trade 

 represents only 10% of the value of U.S. exports. While our critics 

 knowingly include all government humanitcirian, credit guarantee and 

 concessional sales initiatives in their calculations, they are tarnishing the 

 only sector with a positive balance of trade for the United States as they 

 attempt to grab the limited resources available for our efforts. 



There is a pressing need for USDA's export policies to reflect the reality 

 that world agricultural trade is now driven by demand from global 

 consumers for high value products. If the U.S. is to compete effectively in 

 these markets in the 21st century, FAS must reorient its mission, focus, 

 programs, and relationship with the private sector to marketing products 

 consumers want to buy, rather than simply disposing of bulk commodities, 

 surplus commodities or commodities that U.S. producers want to grow. 



The fact that high value products (HVP) now represent virtually all of the 

 growth in the value of world agricultural trade provides sufficient reason for 

 the U.S. to refocus its export policies eind programs. However, the benefits 

 derived from HVP exports are even more compelling. These benefits 

 include: 



The Economic Research Service (ERS) indicates that each dollar of HVP 

 exports generates $1.63 in additional economic activity, compared to $1.08 

 for each dollar of bulk commodity exports: E>ery billion dollars in HVP 

 exports creates an additional 23,000 new jobs in the U.S. economy. While 

 current U.S. farm exports support an estimated 900,000 jobs in direct and 

 related industries, the much higher percentage of HVP exports by the EC 

 supports nearly 2.5 million jobs: Increased personal and corporate incomes 

 from HVP exports raises the tax base for local and state governments as well 

 as increasing federal revenues; exports represent additional employment of 

 people and additional income rather than a diversion of these resources 

 from other sectors of the economy: HVP exports maximize the positive 

 contribution agriculture makes to the U.S. balance of trade. 



Mr. Chairman, the Export Processing Industry Coalition, offers the following 

 five specific recommendations related to the proposed restructuring of FAS 

 into a new International Trade Service Agency (ISTA) to refocus U.S. 

 agricultural trade priorities and export promotion activities on the dynamic 

 growth in the high value/value added agricultural export market: 



1. The Administration must identify the urgent need to increase the U.S. 

 share of world trade in processed and high value agricultural products as 

 a key national priority, and ask USDA to spearhead a campaign to double 

 the U.S. share of world trade in processed and high value agricultural 

 products by the year 2000. 



2. The "multiplier" formulas developed by ERS to measure the economic 



