On June 24 and July 2, USDA announced an additional $1.05 billion for GSM-102 export credit guarantees for the 2009 fiscal year, bringing this year's total allocations to $5.375 billion. The GSM-102 program provides guarantees to U.S. banks against the risk of non-payment by a foreign bank in the sale of U.S. agricultural commodities.

 "The GSM-102 program facilitates trade when financing is tight and affords U.S. farmers a guaranteed buyer of their grains and related co-products," said Ken Hobbie, U.S. Grains Council president and CEO. The Council, a non-profit organization focused on building export markets for U.S. corn, barley, sorghum and co-products, considers the GSM-102 program one of the most effective programs for defending U.S. market share in difficult economic times. Mexico, Central America, Turkey and South Korea were among the recipients of the recent increased allocations and are key target markets for the Council and its market development efforts. "South Korea is a vital market for U.S. feed grains and co-products. It would use even more credit if it were available," said Mike Callahan, USGC senior director of international operations for Asia. The June 24 announcement provides an additional $300 million to South Korea, totaling to $1.2 billion. Central America was allocated an additional $150 million, for a total of $700 million. $100 million was allocated for Mexico, bringing the country's total to $225 million. Turkey was allocated $50 million, bringing the total to $450 million. "During this time of slow global economic growth and tight credit, GSM-102 increases the confidence of U.S. banks to give out loans, providing many countries with credit options they would not otherwise have," said Erick Erickson, USGC special assistant for planning, evaluation and projects. GSM-102 rarely results in an expenditure of U.S. government funds because of its importance to the buying country, and the repayment history has a good track record. Congress established a $5.5 billion cap for the 2009 fiscal year and the Council hopes the remaining $125 million will be made available in coming months. Hobbie added, "The Council works with USDA to help direct GSM-102 credit guarantees toward important feed grains markets worldwide. These efforts have paid dividends. GSM-102 has become a very popular program with international buyers and U.S. banks and sellers. Our export customers are able provide food and fiber for their people while U.S. farmers benefit from having a guaranteed buyer. You can't get a more win-win situation."

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