Agriculture Secretary Tom Vilsack said Thursday that U.S. farm exports are on pace to set a record high in 2013 but that sales will suffer if Congress does not resurrect a $200 million-a-year foreign marketing program that expired Oct. 1.
“We now are no longer in the business of being able to promote trade,” Vilsack in an interview.
At issue is the contentious “market-access program,” which helps private small- and medium-sized businesses make forays into foreign markets.
Vilsack said the U.S. Department of Agriculture has been pushing hard on the trade front since he took the job in 2009, when U.S. farm exports hit $96 billion. They’re projected to reach $143.5 billion next year, an increase of nearly 50 percent in four years.
“It’s the best four years in agricultural exports that we’ve ever had,” said Vilsack, the former Democratic governor of Iowa who made a brief run for his party’s 2008 presidential nomination.
Vilsack said progress could stall if Congress does not fund the department’s market-access program. Using money appropriated under the 2008 farm bill, Vilsack said, the department has helped about 1,000 small- to medium-sized businesses participate in 100 trade shows in 24 different countries, allowing them to make more than 55,000 business contacts and to promote 28,000 different products.
Critics say it’s wrong to ask taxpayers to pay for the marketing of successful private companies. In Congress, Republican Sen. Tom Coburn of Oklahoma and Rep. Paul Ryan of Wisconsin (now the GOP vice presidential nominee) are among those who have called for an end to the subsidies.
Vilsack said farm exports have risen in response to new markets that opened for the United States after Congress passed new free-trade agreements last year with Colombia, South Korea and Panama. And he said the USDA has made “a more concerted, more focused effort” to increase foreign trade after President Barack Obama challenged his Cabinet secretaries to double U.S. exports during the five-year period from 2009 to 2014.
But when members of Congress declined to renew the farm bill before their pre-election break last month, that funding came to an end. As a result, Vilsack said, U.S. farmers, ranchers and others who rely on exports are “in a pickle.”
“We have no authority, nor do we have money at this point, to allow companies to sign up for trade shows in 2013, which is going to compromise our ability to continue this progress and this momentum,” Vilsack said. “You’ve got to commit to these trade shows months in advance so that you get appropriate space and location.”
Coburn, known as one of the top deficit hawks in Congress, released a report in June that blasted the marketing program and its “bounty of waste, loot and spoils plundered from taxpayers.” He said the program had spent a total of more than $2 billion to subsidize foreign advertising for some of the most profitable agriculture companies and trade associations doing business overseas, including Sunkist, Blue Diamond, Tyson Foods, Purina, Hershey’s, Georgia-Pacific and Jack Daniels.
“We need to make tough choices,” Coburn said.
Asked to respond to Coburn’s report, Vilsack cited the case of Bassett’s Ice Cream, a Philadelphia company that began exporting its ice cream after its domestic sales declined. With the help of the USDA, Vilsack said, the company began selling more ice cream in China: Its sales there are expected to rise from $50,000 in 2008 to $2 million by the end of 2012.
“With due respect to the senator, these small companies would not be able to have the opportunity to export,” Vilsack said.
A USDA study in 2010 reported that exports increase by $35 for every dollar spent by the government or industry on marketing. And every $1 billion in U.S. exports generates or supports 7,800 U.S. jobs, Vilsack said.
Vilsack said he expects Congress to take up the farm bill when members return to work for a lame-duck session after Election Day.