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 FAS HiBBion 

 Richard Krajecik 

 November 10, 1993 



In total, the GSM program has been highly succeaaful and has met the criteria of 

 contributing to the profitability of U.S. agriculture through the development and 

 Bervicing of export markets. However, as the international market changes and 

 countries such as Rusaia go through the transition from one form of government 

 or economy to another, we need to devise new GSM type programs to react to these 

 challenges. 



Long Term Strategy 



To my knowledge, the Council was not Invited to participate in the development 

 of USOA'8 Long-Term Agricultural Trade Strategy (XJ^TS) for export markets, nor 

 have we been asked to comment upon it since its release in January 1993. We are 

 therefore unable to comment upon how LATS has been implemented or its impact on 

 our programs. 



However, it is clear that existing FAS export promotion programs are working. 

 FAS has helped us identify future markets and has increased the meurkets for U.S. 

 agricultural products. The partnership between the public sector and the private 

 sector in the form of the cooperator program is working. 



In fact, it is the success of those efforts that are now the focus of other 

 government agencies and industrial groups. It appears that everyone wants a 

 piece of the funding that has supported these programs to increase their exports 

 without understanding the value of the private sector itself coordinating its 

 efforts. The National Export Strategy issued by the Trade Promotion Coordinating 

 Committee appears to be an effort to erode agriculture's share of the export 

 promotion and subsidy funds. It is important that the funding earmarked by 

 Congress for agricultural export promotion remain under the control of the 

 Department of Agriculture and not become part of a pot of funding that can be 

 reallocated among competing interests. It is also important that Congress 

 retain control of determining the relative importance of agricultural export 

 promotion and the need for funding. 



Mr. Chairman, we have appreciated the support of FAS and the Congress for many 

 years, as well as the support from our members. I want to note that there is an 

 increasing amount of attention being given to value added products. Most graphs, 

 comparing the US to other countries show the US lacking in the development of 

 markets for those products. However, I don't think that in our rush toward 

 change emd something new we should "throw the baby out with the bath water". If 

 you look at the sales of U.S. agricultural exports, bulk commodities make up over 

 65% of the total exports. This is no accident. With increased competition, we 

 are fighting harder than ever to maintain market share, even in those markets 

 that have long been our customers. That does not mean that we, or FAS, should 

 rest on the laurels of past successes, but it does mean we can not eUsandon bulk 

 markets just because value added markets are currently "hot" to some analyst. 

 It also does not mean that we should not provide programs and encouragement to 

 value added exports. 



Within the feed grain industry, the Council has been providing information and 

 opportunities for industrial processors in the international market place. 

 However, not every organization has the product or will to develop overseas 

 markets. We must we wary of using government funding to pursue every value added 

 idea. 



