USDA Announces $1.175 Billion in Credit Guarantees for 2010 PDF Print E-mail
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EricksonOn Nov. 13, 2009, USDA’s Foreign Agricultural Service announced $1.175 billion to the GSM-102 program for fiscal year 2010, which began Oct. 1, 2009, allocating the first tranche of the $5.5 billion limit set by Congress. According to the U.S. Grains Council, the GSM-102 program is an effective program that encourages international consumers to purchase their agricultural needs from the United States. “The GSM-102 program is a credit guarantee program whereby the U.S. government guarantees against the default of an exporting country paying for agricultural commodities they buy from the United States. The key is that it is effective only for purchases from the United States, so the use of this program guarantees those agricultural commodities are coming from the United States,” said Erick Erickson, USGC special assistant for planning, evaluation and projects. With rare exceptions, this program does not involve the expenditure of U.S. government funds because of the due diligence USDA’s Commodity Credit Corporation exercises in approving foreign lenders. 

Countries allocated GSM-102 credit guarantees for export sales include:

  • $200 million for South Korea;
  • $125 million for Turkey;
  • $125 million for Eurasia Region;
  • $100 million for Southeast Asia;
  • $100 million for the Caribbean Region;
  • $100 million for Central America;
  • $100 million for Mexico;
  • $100 million for South America;
  • $75 million for the Middle East and North Africa;
  • $75 million for Sub-Saharan Africa;
  • $50 million for China and Hong Kong; and
  • $25 million for South Asia.

The Council works proactively in these markets to ensure new and continued customers for U.S. corn, barley, sorghum and their value-added products. According to Erickson, the Council works closely with end-users and foreign banks to educate them on the program, which has helped make it what it is today. “U.S. farmers benefit from having a guaranteed market while our overseas customers are able to get the credit necessary to providing food and fiber for their people,” said Erickson. “It is a very popular program.” Click here for audio.

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The U.S. Grains Council is a private, non-profit organization dedicated to building export markets for barley, corn, sorghum and their products. The Council is headquartered in Washington, D.C., and has 10 international offices and active market development programs in more than 50 countries. Financial support from the Council’s private industry members, including state checkoffs, agribusinesses, state entities and others, triggers federal matching funds from the government and support from cooperating groups in other countries, producing an annual market development program valued at more than $28.3 million.

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