The U.S. Grains Council applauds the U.S. Department of Agriculture’s Foreign Agricultural Service’s (FAS) announcement of new credit guarantee allocations for sales of U.S. agricultural commodities under the Commodity Credit Corporation’s (CCC) Export Credit Guarantee Program (GSM-102). USDA suspended the program April 6 and reinstated it April 20 with revised rules that adjust the terms of guarantees based on each country’s credit risk score. The GSM-102 program guarantees payments due from approved foreign banks for agricultural commodities exported from the United States.
“A stable financing mechanism is always an integral part of trade. In the world of risk management, GSM-102 makes for a better business environment,� said USGC Board member and Trade Policy Advisory Team Liaison Ron Gray of the Illinois Corn Marketing Board. “This shows the commitment in our administration to the National Export Initiative and the efforts to increase trade.�
The National Corn Growers Association (NCGA) also commended this week’s announcement.
“The GSM-102 program provides competitive credit terms for the export of U.S. agricultural products,� said DaNita Murray, NCGA director of public policy.
One country that has utilized the GSM-102 program is South Korea, which has historically been the world’s second or third-largest feed grains import market. Under the amended structure, South Korea will have an additional $150 million available for fiscal year 2010. Other countries and regions that utilize the credit guarantee program include Turkey, the Sub-Sahara Africa region, the Southeast Balkans region, Southeast Asia, South Asia, Mexico, Eurasia, Central America and the China-Hong Kong region.
Written by Jodi Kiely, USGC Contributing Writer