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Statement By Sharon Colon -2- 



FAS mformation and education about U.S. agriculture and U.S. exports, and the opponunity 

 to trade with the U.S- agricultural industry, play an iniportant role in the success of our trade 

 programs. The U.S.D.A.. through the CCC, the FAS and other departments and agencies, 

 has done a good job but could u.se more support. 



Trade associations and representative groups along with private enterprises need to utilize 

 and support these efforts. Wc have found the cooperation and support of these various 

 organizations to be helpful to us in promoting the sales of our customers. We believe it 

 would be beneficial if there was a broader understanding of the commodity information, the 

 existence of various buyers and sellers, and the financing and assistance programs available. 

 FAS clearly could expand its role in this area. 



As mdicated, CoBank believes the most important and effective export financing programs 

 to date have been the CCC's GSM-102 and 103 pro-ams. Some distorted and unwarranted 

 criticism has been directed toward the programs m recent months; however, they have 

 generally been effective and positive in furthering trade. Rather than considering 

 significandy different approaches, CoBank believes that the GSM programs need some 

 improvements, refinements, expanded use and support 



Program changes that would facilitate commercial transactions on a competitive basis are 

 understood and well-received by foreign banks and buyers, and can be handled with minimal 

 expense and acceptable risk to the U.S. guvermuent and the exporting and banking 

 communities. 



For example, we believe a better balance could be achieved between tlie market 

 development, trade enhancement, and foreign policy issues on one hand and 

 "creditworthiness" issues and other requirements on the other hand. In this regard, we would 

 encourage the development of a "partnership" between commercial lenders and the U.S.D.A. 

 in estabUshing "creditwonhiness guidelines" for prospective buyers or importing countries, 

 giving consideration for utilizing the expertise and exj>^ence of lenders in this area. 



In recent years, many of CoBank's customers have sought new business opportunities 

 throi]gh joint ventures and partnerships in foreign countries and In the U.S. Such strategic 

 alliances are common for many businesses ai^ essential for farmer-owned cooperatives 

 seeking to enter new markets or create new sources of profits for farmers by adding value to 

 agriculniral commodities. The FAS could be of assistance in helping U.S. companies 

 identify opportunities and develop foreign markets for processed or value-added products. 



Several years ago, for example, FAS officials were instrumental in helping purchaser.*! in 

 Mexico acquire nonfat dry milk from the U.S. That success helped open a very significant 

 market for U.S. processed dairy products. 



It is estimated that each $1 in U.S. agricultural expons generates an additional $1.40 in 

 related economic activity. Each $1 billion in agriculturaJ expons is estimated to create 

 21,900 jobs. The correlation between exports and farm income is graphically displayed in 

 the attachment to my testimony. 



The future of rural America will be largely dependent on the maintenance and expansion of 

 export markets, the development of new markets in foreign countries, and on the ability of 

 farmers to capture profits that can be realized be adding value to their product after it leaves 

 the farm gate. For those reasons wc will strongly suppon any efforts by the administration 



and Congress to make the Foreign Agricultural Service and related federal agencies more 

 effective. 



Mr. Chairman and members of the committee, I appreciate Uie opportunity to appear here 

 today. I would be pleased to respond to any questions. 



(Attachment follows:) 



