U.S. Agricultural Trade: Trends, Composition, Direction, and Policy

98-253 ENR CRS Report for Congress Received through the CRS Web U.S. Agricultural Trade: Trends, Composition, Direction, and Policy Updated October 24, 2000 Charles E. Hanrahan Senior Specialist in Agricultural Policy Resources, Science, and Industry Division Mary L. Dunkley Research Production Assistant Resources, Science, and Industry Division Congressional Research Service ˜ The Library of Congress ABSTRACT This report identifies trends in U.S. agricultural trade, examines the commodity composition of both agricultural exports and imports, assesses the relative importance of agricultural exports in relation to domestic production, provides estimates of export market shares for major categories of agricultural products, and discusses the principal markets for exports as well as major suppliers of agricultural products to the U.S. market. The report compares levels of support for agriculture in the United States and the European Union and compares the domestic, trade, and food aid policies and programs of the United States, the European Union, Canada, and Australia. The report is updated as new information becomes available. U.S. Agricultural Trade: Trends, Composition, Direction, and Policy Summary U.S. agricultural exports in FY2001 are forecast by the U.S. Department of Agriculture at $51.5 billion. Agricultural imports are expected to reach a record $39.5 billion. The trade surplus, is projected to be $12 billion. Agricultural exports account for about 20% of the value of production and make a positive contribution to the balance of payments. Exports of bulk commodities, e.g., oilseeds, wheat and feed grains, remain significant, but exports of high value products (HVPs), e.g., meats, fruits, and vegetables, are increasing. HVPs accounted for 62% of total U.S. agricultural exports in 1999. Leading markets for U.S. agricultural exports are Japan, Canada, the European Union, Mexico, Taiwan and Korea. The United States dominates world markets for corn, wheat, soybeans, and cotton. Most U.S. agricultural imports are high value products. For some imports (grains, meats, horticultural products), similar products are produced in the United States; production of other categories of imports (bananas, coffee, cocoa) is very limited. The biggest import suppliers are Canada, the European Union (EU), Australia-New Zealand, Mexico, Indonesia, Brazil, and Colombia. U.S. agricultural exports to Asian countries, Canada, and Mexico have shown considerable growth. Financial and economic difficulties have slowed the growth of exports to Asia since 1997, but FY2000 exports to Asian markets are estimated to increase. Exports to the Former Soviet Union (FSU), Japan, and China also are estimated to increase in FY2000. Both the EU and the United States subsidize agriculture, but the EU outsubsidizes the United States. Canada supports some sectors (e.g., dairy and poultry) more than others. Australia provides less support to its agriculture. Single desk sellers with monopoly powers operate wheat markets and markets for some other commodities in Canada and Australia. Export subsidies are more important in the EU than in the United States; border measures (tariffs) are more important in Canada than in either the United States or the EU. Australia operates a mix of trade measures. The United States is the dominant supplier of foreign food aid, followed by the EU, Canada and Australia. The United States has the most diverse food aid programs; others limit food aid to development assistance and emergencies. Contents U.S. Agricultural Trade: Trends, Composition, Direction, and Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Share of U.S. Production Exported . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Commodity Composition of U.S. Agricultural Exports . . . . . . . . . . . . . 9 Composition of U.S. Agricultural Exports: Bulk, Consumer-Ready, and Intermediate . . . . . . . . . . . . . . . . . . . . . . 13 Major Country Markets for U.S. Agricultural Exports . . . . . . . . . . . . 17 U.S. Market Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Major U.S. Agricultural Imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 U.S. Agricultural Imports by Country of Origin . . . . . . . . . . . . . . . . . 47 Growth in U.S. Agricultural Exports, 1988 -2000F . . . . . . . . . . . . . . 51 Growth in U.S. Agricultural Exports to Asian Markets . . . . . . . . . . . . 55 Growth in Agricultural Exports to North and South America . . . . . . . 59 Market Development Programs in Selected Countries . . . . . . . . . . . . 63 Domestic Support and Export Subsidies in the United States and the European Union . . . . . . . . . . . . . . . . . . . 67 Producer Support Estimates (PSEs) in the United States and the European Union . . . . . . . . . . . . . . . . . . . . . 69 Agricultural and Trade Policies in the United States and the European Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Agricultural and Trade Policies in Canada and Australia . . . . . . . . . . . 78 U.S. Agricultural Trade: Trends, Composition, Direction, and Policy U.S. Agricultural Exports, Imports and Trade Balance ! ! ! ! U.S. agricultural exports in FY2001 are projected to be $51.5 billion, $1.5 billion more than in FY2000. FY2001 increases in exports reflect strong world economic growth and resulting increases in demand. Agricultural imports are forecast at a record $39.5 billion in FY2001, $500 million more than in FY2000. High-value products -- mainly fruits, vegetables, and wine and malt beverages -- make up most of the increase in imports. CRS-2 U.S. Agricultural Exports and Imports, FY 1985 - FY 2001F $ Billions 70 60 50 40 30 20 10 0 1985 1987 1989 1991 1993 Source: U.S. Department of Agriculture. Economic Research Service. F = Forecast 1995 1997 1999 2001F CRS-3 Table 1. U.S. Agricultural Exports and Imports, FY 1985 - FY 2001F ($ Millions) Year Exports Imports Trade 1985 31,201 19,740 11,461 1986 26,312 20,884 5,428 1987 27,876 20,650 7,226 1988 35,316 21,014 14,302 1989 39,590 21,476 18,114 1990 40,220 22,560 17,660 1991 37,609 22,588 15,021 1992 42,430 24,323 18,107 1993 42,590 24,454 18,136 1994 43,900 26,600 17,300 1995 54,600 29,900 24,700 1996 59,800 32,600 27,200 1997 57,300 35,800 21,500 1998 53.6 37.0 16.6 1999 49.0 37.5 11.5 2000 50.5 39.0 11.5 2001F 51.5 39.5 12.0 Source: U.S. Department of Agriculture. Economic Research Service F = Forecast Share of U.S. Production Exported ! Production from one-third of harvested acreage is exported. ! About 20% of the value of U.S. agricultural output is exported. In FY2000, around 47% of the U.S. wheat crop was exported, while 20% of the U.S. corn crop moved into world markets. (Forecasts for FY2001 are for 49% and 20% respectively.) ! ! ! Export markets are important for soybeans (32%) and cotton (40%). Beef exports have grown rapidly, but a relatively small percentage of output (9% in FY2000) is exported. CRS-5 U.S. Agricultural Exports: Share of U.S. Production Exported, 1997 - 2001F Wheat Corn Cotton Soybeans Beef Percent 60 50 40 30 20 10 0 1997 1998 1999 2000F Source: U.S. Department of Agriculture. Foreign Agricultural Service; Economic Research Service. F = Forecast 2001F CRS-6 Table 2. U.S. Agricultural Exports: Percentage Share of U.S. Production Exported, 1988 - 2001F Year Wheat Corn Cotton Soybeans Beef 1988 75.81 24.06 44.59 41.38 2.88 1989 78.09 41.10 39.61 34.02 4.43 1990 60.48 31.44 63.11 32.38 4.42 1991 39.16 21.74 50.32 28.92 5.18 1992 64.75 21.19 38.07 34.42 5.74 1993 54.88 16.39 32.10 35.16 5.53 1994 51.25 20.96 42.86 31.48 6.61 1995 51.18 21.54 47.71 33.29 7.22 1996 56.8 30.1 43.0 39.1 7.4 1997 44.0 19.5 36.5 37.1 8.4 1998 41.9 16.3 39.9 32.5 8.5 1999 40.9 20.3 30.9 29.2 9.0 2000 47.3 19.9 40.0 32.2 9.4 2001F 49.0 20.5 42.5 33.0 9.7 Source: U.S. Department of Agriculture. Economic Research Service, Agriculture Outlook Various Issues. F = Forecast Commodity Composition of U.S. Agricultural Exports ! ! The United States exports a wide range of agricultural products, including both bulk commodities and high value products. Oilseeds (mainly soybeans) and oilseed products were the leading (by value) commodity components of U.S. agricultural exports in FY2000, followed by feed grains, fruits, meats, wheat, and vegetables. CRS-8 U.S. Agricultural Exports of Major Commodities, FY2000e $Billions Oilseed and Products 8.7 Feed Grains & Prods. 5.2 Meats, excl. poultry 5.0 Fruits, Juices, Nuts, and Prep 4.2 Wheat and Prods. 3.5 Vegetables/Prep 2.9 Feeds/Fodder 2.4 Poultry/Prods. 2.3 Cotton 1.8 Tobacco 1.3 0.0 2.0 Source: U.S. Department of Agriculture. Economic Research Service. e = estimate 4.0 6.0 8.0 10.0 CRS-9 Table 3. U.S. Agricultural Exports of Major Commodities, FY 2000e Commodity ($Billions) Oilseeds and Products 8.7 Feed Grains 5.2 Meats, excl. Poultry 5.0 Fruits, Juices, Nuts, and Preps. 4.2 Wheat and Prods 3.5 Vegetables/Preps. 2.9 Feeds/Fodder 2.4 Poultry/Prods. 2.3 Cotton 1.8 Tobacco 1.3 Source: U.S. Department of Agriculture. Economic Research Service. e = estimate Composition of U.S. Agricultural Exports: Bulk, Consumer-Ready, and Intermediate ! ! ! ! ! Bulk agricultural exports include products like wheat, coarse grains, and soybeans. Intermediate products have been processed to some extent and include products like wheat flour, soybean oil, and feeds. Consumer-ready includes both processed products such as breakfast cereals and products such as fresh fruits and vegetables. Since FY 1991, the total of high value intermediate and consumerready products has exceeded the value of bulk agricultural exports. In FY 1999, high value exports accounted for 62% of total U.S. agricultural exports, bulk for 38%. CRS-11 U.S. Agricultural Exports, FY 1981, FY 1985 - 1999 Bulk, Consumer-Ready, and Intermediate Product Exports Bulk 70.0 Consumer-Ready Intermediate $ Billions 60.0 50.0 40.0 30.0 20.0 10.0 0.0 81 85 86 87 88 89 90 91 92 Source: U.S. Department of Agriculture. Foreign Agricultural Service. 93 94 95 96 97 98 99 CRS-12 Table 4. U.S. Agricultural Exports, FY 1981 - FY 1999: Total, Bulk, Consumer-Ready, and Intermediate Product Exports ($ Thousands) Year Total Bulk % of Total ConsumerReady % of Total Intermediate % of Total 1981 43,782,436 30,484,758 69.6 5,498,271 12.6 7,799,407 17.8 1985 31,202,986 19,991,004 64.1 4,794,811 15.4 6,417,171 20.6 1986 26,335,846 14,455,870 54.9 4,959,782 18.8 6,920,194 26.3 1987 27,877,509 14,650,403 52.6 5,951,124 21.3 7,275,982 26.1 1988 35,336,356 19,360,317 54.8 7,360,473 20.8 8,615,566 24.4 1989 39,522,729 22,295,358 56.4 8,352,422 21.1 8,874,949 22.5 1990 40,122,362 21,785,568 54.3 9,766,813 24.3 8,569,981 21.4 1991 37,534,222 17,610,418 46.9 11,431,178 30.5 8,492,626 22.6 1992 42,315,630 19,556,582 46.2 13,521,311 32.0 9,237,737 21.8 1993 42,454,370 18,913,731 44.6 14,626,124 34.5 8,914,515 21.0 1994 43,475,000 17,967,000 41.3 16,167,000 37.2 9,340,000 21.5 1995 54,629,263 24,452,852 44.7 18,717,630 34.3 11,458,781 21.0 1996 59,794,787 28,792,244 48.1 20,047,654 33.5 10,954,889 18.3 1997 57,260,562 24,143,573 42.2 20,793,043 36.3 12,323,946 21.5 1998 53,628,843 20,879,395 39.0 20,626,187 38.5 12,123,261 22.6 1999 49,003,869 18,566,167 38.0 19,809,814 40.0 10,627,888 22.1 Source: U.S. Department of Agriculture. Foreign Agricultural Service. Major Country Markets for U.S. Agricultural Exports ! ! ! ! Japan is the leading country market for U.S. agricultural exports. Canada and Mexico, U.S. partners in the North American Free Trade Agreement, are the 2nd and 3rd largest markets for U.S. agricultural products. The EU is now the 4th largest U.S. export market. The Republic of Korea and Taiwan are in fifth and sixth place. U.S. exports to Asian countries are expanding but have yet to rebound to pre1997 levels. CRS-14 Major Country Markets for U.S. Agricultural Exports FY 1999 - FY 2001F 1999 2000 2001 $ Billions 8.9 9.2 9.5 Japan 7.0 Canada Mexico 5.7 6.0 6.2 EU 6.2 5.9 7.5 7.6 7.0 2.5 2.6 2.6 Korea, Republic of 2.0 2.0 2.1 Taiwan 0.0 2.0 4.0 Source: U.S. Department of Agriculture. Economic Research Service. F = Forecast 6.0 8.0 10.0 12.0 CRS-15 Table 5. Major Country Markets for U.S. Agricultural Exports, FY1999 - FY2001F Country 1999 2000 2001F Japan 8.9 9.2 9.5 Canada 7.0 7.5 7.6 Mexico 5.7 6.0 6.2 EU 7.0 6.2 5.9 Korea, Republic of 2.5 2.6 2.6 Taiwan 2.0 2.0 2.1 Source: U.S. Department of Agriculture. Economic Research Service. F = Forecast U.S. Market Shares Crops ! Wheat: Although it has lost market share in the 1990s the United States is the major supplier of wheat and wheat products to the world market; its share was 27.3% in 1999/2000. The European Union, Canada, Australia, and Argentina are major competitors in this market. ! Rice: Thailand (27%) is the world's dominant rice exporter; Vietnam (18%) is re-establishing itself in world rice markets. The United States held 11% of the market in 2000. ! Corn: The United States provided 67% of world corn exports in 1999 and Argentina, 12%; China, whose domestic demand for corn is growing, was an important exporter in 1999/2000. ! Soybeans: In 1999/2000, the U.S. share of this market was 56%; Brazil and Argentina, who export more soybean meal and oil than beans, together held more than 30% of the world soybean market. ! Cotton: U.S. cotton exports were 25% of world exports in 1999/2000. Uzbekistan, a Republic of the Former Soviet Union, and Franc-Zone West African countries accounted for 15% and 13% respectively of world cotton exports. CRS-17 Share of World Exports of Wheat and Wheat Products, 1999/2000 United States 27% European Union 15% Canada 18% Rest of World 10% Kazakhstan, Rep. 4% Argentina 10% Australia 16% Source: U.S. Department of Agriculture. Foreign Agricultural Service. CRS-18 Table 6. Share of World Exports of Wheat and Wheat Products (%), 1991 - 2001F Country 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01F Argentina 5.2 6.5 4.5 8.1 5.6 9.7 9.2 8.7 10.0 10.5 Australia 7.5 8.4 12.7 8.0 13.0 17.5 14.8 15.7 15.8 15.7 Canada 22.6 19.3 18.7 21.6 18.1 17.5 20.5 14.0 17.9 17.1 European Union 20.0 21.0 20.0 17.4 13.4 17.2 13.7 14.2 14.8 15.2 -- 5.1 5.5 3.6 3.2 2.2 3.3 2.2 4.2 3.8 United States 32.1 33.0 33.0 33.4 36.0 26.1 27.0 28.3 27.3 29.0 Rest of World 13.0 6.6 5.6 7.9 10.7 10.3 11.5 17.2 10.0 8.7 Kazakhstan, Rep. Source: U.S. Department of Agriculture. Foreign Agricultural Service. July June year. F = Forecast -- = Less than .1%. CRS-19 Share of World Exports of Rice, 2000 Pakistan 8% Thailand 27% India 5% China 14% Rest of World 18% United States 12% Vietnam 15% Source: U.S. Department of Agriculture. Foreign Agricultural Service. CRS-20 Table 7. Share of World Exports of Rice (%), 1991 - 2001F Country 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000F 2001F China 5.7 6.6 9.2 9.2 -- 1.3 5.0 13.7 10.8 14.3 13.8 India 5.4 4.0 4.2 3.6 20.0 18.0 10.4 16.5 10.2 4.9 7.3 Pakistan 10.7 9.6 6.3 8.5 7.6 8.5 10.5 6.6 7.3 8.3 7.3 Thailand 33.1 34.0 36.2 28.4 28.3 26.8 27.7 23.3 26.6 26.8 26.8 United States 18.2 14.9 17.7 17.0 14.6 13.3 12.2 11.6 10.6 12.3 11.2 8.7 13.6 11.8 13.5 11.0 15.4 17.7 13.8 18.2 15.2 16.2 17.7 17.4 14.6 19.8 18.5 16.7 16.5 14.5 16.3 18.2 17.4 Vietnam Rest of World Source: U.S. Department of Agriculture. Foreign Agricultural Service. Calendar year. F = Forecast -- = Less than .1% CRS-21 Share of World Exports of Corn, 1999/2000 United States 67% Rest of World 6% South Africa, Rep. 1% Argentina 12% China 14% Source: U.S. Department of Agriculture. Foreign Agricultural Service. CRS-22 Table 8. Share of World Exports of Corn (%) , 1990 - 2000F Country Argentina China South Africa, Rep. United States Rest of World 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 6.1 9.4 7.7 7.5 8.5 10.6 15.4 20.2 11.5 12.1 11.7 11.6 15.9 20.3 20.9 2.0 -- 5.9 9.8 4.9 13.7 5.5 1.2 1.3 0 5.3 3.5 2.5 2.4 1.8 1.3 1.2 1.8 75.3 65.0 67.1 58.8 82.4 79.8 70.2 59.8 75.7 67.3 78.5 5.8 8.4 4.9 7.5 3.6 7.1 6.1 8.4 6.6 5.7 2.5 Source: U.S. Department of Agriculture. Foreign Agricultural Service. October September year. F = Forecast -- = Less than .1%. 2000/01F CRS-23 Share of World Exports of Soybeans, 1999/00 United States 56% Rest of World 5% Paraguay 5% Argentina 10% Brazil 24% Source: U.S. Department of Agriculture. Foreign Agricultural Service. CRS-24 Table 9. Share of World Exports of Soybeans (%), 1990/91 - 2000/01e Country 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00P 2000/01 Argentina 17.5 11.3 8.1 10.9 7.8 6.9 2.0 8.0 8.3 10.2 9.8 Brazil 10.3 13.7 14.0 19.3 11.1 10.1 22.5 21.6 23.1 23.9 21.9 4.1 2.9 4.2 4.3 4.5 4.7 5.8 5.9 5.9 4.7 5.1 United States 10.4 66.0 70.2 56.9 70.9 73.0 65.0 58.7 56.6 56.3 58.2 Rest of World 7.7 6.1 3.5 8.6 5.7 5.3 4.7 5.8 6.1 4.9 5.0 Paraguay Source: U.S. Department of Agriculture. Foreign Agricultural Service. Marketing year. e = estimate CRS-25 Share of World Exports of Cotton, 1999/00 Rest of World 35% Australia 12% United States 25% Uzbekistan 15% Franc-Zone Africa 13% Source: U.S. Department of Agriculture. Foreign Agricultural Service. CRS-26 Table 10. Share of World Exports of Cotton (%), 1990/91 - 1999/2000e Country 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/2000e Australia 4.6 8.3 6.6 6.3 4.7 5.3 8.8 10.1 12.8 11.8 Franc-Zone Africa 6.9 7.9 8.0 7.6 9.4 10.1 12.3 13.5 15.0 13.1 United States 26.2 23.5 20.5 25.7 33.0 27.4 25.5 28.0 18.3 24.8 Uzbekistan 18.1 18.4 21.5 21.7 17.2 16.3 16.9 17.1 16.1 15.0 Rest of World 39.6 35.0 39.0 37.5 34.8 40.9 36.5 31.3 37.8 35.3 Source: U.S. Department of Agriculture. Foreign Agricultural Service. Marketing year. e = estimate f = forecast U.S. Market Shares Livestock and Dairy ! Beef: Australia and New Zealand together supply about 30% of world beef exports. The United States' share of world beef exports was 19% in 1999. The EU, Brazil and Argentina are the other major suppliers of beef to global markets. ! Pork: In 1999, the U.S. share of world pork markets was 17%; the EU's share was around 42%. Canada is the second major supplier of pork to world markets, with a share of 18% in 1999. ! Poultry: The United States is the world's leading supplier of poultry meat (42% in 1999). The EU, with around 14% of the world market, is a distant second. ! Dairy Products: In 1999, the European Union was the leading supplier of dairy products to the world market, followed by New Zealand and Australia. The United States has only a shall share of world markets for dairy products. CRS-28 Share of World Exports of Beef and Veal, 1999P United States 19% European Union 14% Rest of World 22% New Zealand 7% Argentina 6% Brazil 10% Source: U.S. Department of Agriculture. Foreign Agricultural Service. P = Preliminary Australia 22% CRS-29 Table 11. Share of World Exports of Beef and Veal, (%) 1990 - 2000F Country Argentina 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999P 2000F 8.4 7.0 5.5 5.2 7.3 10.1 9.1 7.9 5.4 5.9 6.5 19.7 22.4 21.2 20.6 21.1 17.9 17.7 16.4 12.6 14.3 11.2 United States 8.5 9.6 11.2 10.9 14.3 15.9 16.5 17.6 18.4 18.6 18.4 Brazil 7.5 6.1 8.4 7.7 7.5 5.6 5.3 5.3 7.0 9.7 11.4 21.0 20.1 23.0 23.0 22.8 21.0 19.7 20.9 23.5 22.0 21.3 New Zealand 7.0 8.0 8.2 8.8 9.1 9.7 10.0 9.7 9.7 7.4 8.0 Rest of World 27.9 26.8 22.5 23.8 17.9 19.8 21.7 22.2 23.4 22.1 23.2 European Union Australia Source: U.S. Department of Agriculture. Foreign Agricultural Service. P = Preliminary F = Forecast CRS-30 Share of World Pork Exports, 1999P United States 17.3% China, Peoples Republic of 3.9% Rest of World 10.6% Poland 6.5% European Union 42.4% Hungary 1.0% Source: U.S. Department of Agriculture. Foreign Agricultural Service. P = Preliminary Canada 18.3% CRS-31 Table 12. Share of World Pork Exports (%), 1989 - 2000F Country Canada 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999P 2000F 16.8 15.8 13.9 17.8 17.7 14.1 15.4 14.6 15.4 15.9 18.3 20.0 6.5 5.4 6.7 11.2 11.5 11.4 15.4 17.3 17.6 20.5 17.3 17.8 32.2 35.4 32.2 28.5 34.2 41.0 30.5 27.5 36.0 37.0 42.4 40.6 Hungary 7.4 10.6 7.5 4.2 2.6 1.9 2.3 4.0 1.8 1.0 1.0 0.8 Poland 4.0 2.5 1.1 .8 .6 1.2 3.5 6.3 10.5 8.2 6.5 6.5 11.2 11.8 14.0 7.1 8.7 8.5 10.0 7.5 6.0 6.0 3.9 3.3 Taiwan 8.8 11.3 16.9 18.4 16.5 15.6 16.4 15.2 2.6 -- -- -- Rest of World 3.1 7.2 7.7 12.0 8.2 6.3 6.5 7.6 10.1 11.4 10.6 11.0 United States European Union China, Peoples Republic of Source: U.S. Department of Agriculture. Foreign Agricultural Service. P = Preliminary F = Forecast N/A = Not available -- = Less than .1%. CRS-32 Share of World Total Poultry Meat Exports, 1999 Brazil 13.2% United States 41.7% European Union 13.8% China (PRC) 6.5% Hong Kong 13.0% Source: U.S. Department of Agriculture. Foreign Agricultural Service. Rest of World 11.8% CRS-33 Table 13. Share of World Total Poultry Meat Exports (%), 1990 - 2000F Country 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999P 2000F United States 20.3 21.1 23.1 36.2 39.6 44.2 45.2 46.1 44.0 41.7 40.1 Brazil 11.2 10.9 11.6 15.1 13.3 9.8 11.3 11.9 11.0 13.3 13.8 European Union 45.9 45.2 46.6 22.4 20.9 16.6 14.8 14.0 14.8 13.9 13.4 China (PRC) 4.0 4.1 4.7 6.2 6.8 7.4 7.2 6.7 6.2 6.5 6.9 Hong Kong 2.7 3.1 3.2 7.2 8.6 11.0 11.0 10.5 10.7 13.1 14.5 15.9 15.6 10.8 12.9 10.8 11.0 10.5 10.8 13.3 11.5 11.3 Rest of World Source: U.S. Department of Agriculture. Foreign Agricultural Service. P = Preliminary F = Forecast CRS-34 Share of World Nonfat Dry Milk Exports, 1999P European Union 24.3% United States 19.3% Poland 8.5% Canada 3.6% Rest of World 4.8% Australia 21.2% New Zealand 18.3% Source: U.S. Department of Agriculture. Foreign Agricultural Service. P = Preliminary CRS-35 Table 14. Share of World Nonfat Dry Milk Exports (%), 1990 - 2000F Country 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999P 2000F Canada 5.0 5.7 3.3 1.9 3.8 4.0 4.3 2.9 3.7 3.6 2.5 United States 1.2 8.3 14.5 15.9 14.4 14.9 4.2 11.2 11.2 19.3 13.7 43.1 30.5 39.8 33.6 21.1 35.1 30.3 28.3 22.1 24.3 28.3 8.3 10.6 6.7 14.5 13.1 8.9 10.4 10.7 10.9 8.5 9.5 Australia 11.4 16.0 13.5 15.0 20.6 17.1 21.9 19.6 21.5 21.2 21.1 New Zealand 21.0 21.3 18.3 13.1 17.7 15.1 19.6 20.6 21.2 18.3 8.8 Rest of World 10.0 7.6 3.9 6.0 9.3 4.9 9.3 6.7 9.5 4.8 6.1 European Union Poland Source: U.S. Department of Agriculture. Foreign Agricultural Service. P = Preliminary F = Forecast Major U.S. Agricultural Imports ! ! ! ! Most U.S. agricultural imports are high value products. Some imports, such as vegetables, fruits, meats, and live animals, are also produced in the United States. Other imports, such as coffee, bananas, and cocoa are not produced in the United States. Horticultural products (fruits, nuts, vegetables and preparations) have been the largest component of imports. CRS-37 Major U.S. Agricultural Imports by Commodity FY2000 Fruits and Nuts 5.4 Vegetables and Preps 4.6 Wine & Malt Beverage 4.4 Red Meats 3.7 Coffee 2.9 Oilseeds & Products 1.9 Animals 1.8 Dairy Products 1.7 Cocoa 1.5 Sugar & Products 1.5 Nursery and cut flowers 1.2 Bananas 1.1 0.0 1.0 2.0 3.0 Source: U.S. Department of Agriculture. Economic Research Service. 4.0 5.0 6.0 7.0 CRS-38 Table 15. Major U.S. Agricultural Imports, FY2000 Commodity FY 2000 Imports ($ Billions) Fruits and Nuts 5.4 Vegetables & Preps 4.6 Wine and Malt Beverage 4.4 Red Meats 3.7 Coffee 2.9 Oilseeds and Products 1.9 Animals 1.8 Dairy Products 1.7 Cocoa 1.5 Sugar and Products 1.5 Nursery and cut flowers 1.2 Bananas 1.1 Source: U.S. Department of Agriculture. Economic Research Service. U.S. Agricultural Imports by Country of Origin ! ! Canada, the European Union, and Mexico are the major suppliers of U.S. agricultural imports. Australia and New Zealand, Brazil, Colombia, Indonesia, and other Latin American countries, are also major import suppliers. CRS-40 Major U.S. Agricultural Imports by Country of Origin FY 1998 - FY 2000F 1998 1999 2000 $ Billions 7.8 7.9 Canada 7.3 European Union 7.8 8.4 8.4 4.7 4.8 5.0 Mexico 2.1 2.2 Oceania Brazil 1.2 1.4 1.4 Colombia 1.4 1.2 1.2 Indonesia 1.4 1.2 0.9 0.0 2.0 2.7 4.0 Source: U.S. Department of Agriculture. Economic Research Service. F = Forecast 6.0 8.0 10.0 CRS-41 Table 16. U.S. Agricultural Imports by Country of Origin 1998 - 2000F ($ Billions) Country 1998 1999 Canada 7.8 7.9 8.4 European Union 7.3 7.8 8.4 Mexico 4.7 4.8 5.0 Oceania1 2.1 2.2 2.7 Brazil 1.2 1.4 1.4 Colombia 1.4 1.2 1.2 Indonesia 1.4 1.2 0.9 Source: U.S. Department of Agriculture. Economic Research Service. F = Forecast 1 2000F Australia, New Zealand, and Papua New Guinea. Growth in U.S. Agricultural Exports, 1988 - 2000F ! Asian markets for U.S. agricultural exports grew substantially from 1988-1996. Because of financial and economic problems, FY2000 U.S. agricultural exports to Asia are forecast to be 23% less than in FY1996. ! U.S. agricultural exports to the European Union grew relatively slowly during the 1990s. FY2000 U.S. farm exports to the EU are forecast to be 36% less than in FY1996. ! Agricultural exports to the Former Soviet Union are forecast to increase from $816 million in FY1999 to $1.4 billion in FY2000. ! Agricultural exports to Latin America, including Mexico, and to Canada have grown rapidly during the 1990's. They declined less rapidly than have exports to Asian markets in 1999. F = Forecast CRS-43 Growth in U.S. Agricultural Exports FY 1988 - FY 2000F Asia 60.0 European Union Latin America Former Soviet Union Canada $ Billions 50.0 40.0 30.0 20.0 10.0 0.0 1988 1989 1990 1991 1992 1993 1994 Source: U.S. Department of Agriculture. Economic Research Service. F = Forecast 1995 1996 1997 1998 1999 2000 CRS-44 Table 17. Growth in U.S. Agricultural Exports, FY1988 - FY2000F ($ Billions) Year Asia European Union Former Soviet Union Canada 1988 15.928 7.486 4.401 1.940 1.973 1989 18.674 6.539 5.439 3.299 2.179 1990 18.174 6.815 5.155 3.006 3.715 1991 16.094 6.776 5.499 1.758 4.409 1992 17.782 7.193 6.438 2.704 4.812 1993 17.832 7.022 6.883 1.561 5.220 1994 17.272 6.857 7.309 1.497 5.303 1995 24.199 8.493 8.178 1.168 5.890 1996 26.018 9.180 9.991 1.666 6.004 1997 23.873 8.997 10.020 1.593 6.620 1998 19.668 8.844 11.348 1.456 7.022 1999 18.468 6.960 10.502 0.816 6.957 2000F 19.9 5.9 10.3 1.4 7.6 Source: U.S. Department of Agriculture. Economic Research Service. F = Forecast 1 Latin America1 Including Mexico Growth in U.S. Agricultural Exports to Asian Markets ! ! ! ! Japan is the United States largest agricultural export market. Because of it’s continuing recession, U.S. farm exports to Japan declined by 25% from 1996 to 1999. Rapid income growth in Southeast Asia stimulated demand for U.S. agricultural exports in the 1990s. Financial and economic problems in the region have since slowed the growth in agricultural exports. U.S. agricultural exports to China grew during the 1990s but fluctuated considerably. U.S. exports declined in 1999 as China increased domestic production of grains and cotton. Agricultural exports to Asian markets (except South Asia) are forecast to increase in FY2000. CRS-46 Growth in Agricultural Exports to Asian Markets FY 1988 - FY 2000F Japan 20.0 Southeast Asia South Asia China 1995 1997 $ Billions 15.0 10.0 5.0 0.0 1988 1989 1990 1991 1992 1993 1994 Source: U.S. Department of Agriculture. Economic Research Service. F = Forecast 1996 1998 1999 2000 CRS-47 Table 18. Growth in Agricultural Exports to Asian Markets, FY1988 - FY2000F ($ Billions) Year Japan Southeast Asia China 1988 7.274 1.015 .805 .612 1989 8.148 .975 1.161 1.496 1990 8.155 1.184 .723 .909 1991 7.736 1.239 .375 .668 1992 8.383 1.470 .536 .690 1993 8.461 1.551 .641 .322 1994 9.281 1.803 .560 .884 1995 10.546 2.605 .801 2.434 1996 11.882 3.386 .730 1.828 1997 10.713 3.136 .728 1.774 1998 9.469 2.288 0.626 1.514 1999 8.940 2.202 0.500 1.012 2000F 9.5 2.6 0.4 1.5 Source: U.S. Department of Agriculture. Economic Research Service. F = Forecast South Asia Growth in Agricultural Exports to North and South America ! ! ! ! Growth in U.S. agricultural trade with Canada and Mexico, NAFTA trading partners, has been particularly strong. Latin American markets have declined since FY1998. U.S. agricultural exports to Canada are forecast to reach $7.6 billion in FY2000. U.S. agricultural export to Mexico are expected to increase by more than $500 million in 2000. CRS-49 Growth in Agricultural Exports to North and South America FY 1988 - FY 2000F South America 20.0 Canada Mexico $ Billions 15.0 10.0 5.0 0.0 1988 1989 1990 1991 1992 1993 1994 1995 Source: U.S. Department of Agriculture. Economic Research Service. F = Forecast 1996 1997 1998 1999 2000 CRS-50 Table 19. Growth in Agricultural Exports to North and South America, FY1988 - FY2000F ($ Billions) Year Latin America ex. Mexico Canada 1988 2.675 1.973 1.726 1989 2.682 2.179 2.757 1990 2.491 3.715 2.666 1991 2.615 4.409 2.885 1992 2.762 4.812 3.676 1993 3.223 5.220 3.660 1994 3.119 5.303 4.166 1995 4.503 5.890 3.733 1996 4.968 6.004 5.023 1997 4.907 6.620 5.077 1998 5.407 7.022 5.956 1999 4.827 6.957 5.675 2000F 4.1 7.6 6.2 Source: U.S. Department of Agriculture. Economic Research Service. F= Forecast Mexico Market Development Programs in Selected Countries ! Most major agricultural exporting countries have programs to promote agricultural exports and develop markets. Programs include consumer promotions, market research, technical assistance, and trade servicing. ! 52% of the funds for U.S. market development programs are from the Federal Government; and 48% from commodity groups, trade associations, or firms. ! European Union countries operate market development/export promotion programs funded by mandatory producer levies (59% in 1998) and national budgets (41% in 1998). ! In Australia and especially New Zealand, where less direct government funding is provided, most agricultural export promotion is carried out by commodity marketing boards, trade associations, and private firms. CRS-52 Expenditures for Market Development, Selected Countries, 1998 Government Funded Industry U.S. $ Millions 500 378.8 355.4 400 286.9 300 200 109.9 100 0 EU Countries United States Australia Source: Foreign Agricultural Service. EU Countries includes Denmark, France, Germany, Italy, Netherlands, Spain, and U.K. New Zealand CRS-53 ` Table 20. Expenditures for Market Development, Selected Countries, 1998 ($ Millions) Country Funding Total Government % Industry % EU Countries 378.8 156.2 41.2 222.6 58.8 United States 286.9 149.2 52.0 137.7 48.0 Australia 109.9 0.3 0.3 109.6 99.7 New Zealand 355.4 8.6 2.4 346.8 97.6 Source: Foreign Agricultural Service Domestic Support and Export Subsidies in the United States and the European Union ! ! ! ! The Governments of both the United States and the European Union provide income support to farmers and subsidize agricultural exports. EU direct subsidies in 1998 were more than 4 times larger than direct U.S. subsidies; in 1999 EU subsidies were a little over 2 times as large. In the United States, domestic support and export subsidies are concentrated on wheat, rice, feed grains, and cotton. U.S. support increased by 80% in 1999 because of a large emergency assistance program for farmers and because low prices triggered increased outlays for marketing assistance and loan deficiency payments. The European Union provides domestic support and export subsidies to a broader range of products including grains, sugar, oils and fats, dairy products, meat, poultry and eggs, and fruits and vegetables. CRS-55 Table 21. A Comparison of U.S. and EU Government Spending on Agricultural Support, 1996-1999 European Union 1996 1997 1998e 1999e Export Subsidies a 7.221 6.696 5.913 5.699 Domestic Support b 42.328 39.306 39.077 37.389 Total 49.549 46.002 44.990 43.088 1996 1997 1998 1999e Export Subsidies c 0.422 0.125 0.212 0.344 Domestic Support d 5.068 7.131 9.931 18.047 Total 4.646 7.256 10.143 18.391 United States Source: U.S. Dept. of Agriculture and Commission of the European Union. e=estimate a EU export subsidies include export refunds (amounts paid to exporters who bought at high internal market prices and sold at world market prices), but exclude food aid. b EU domestic support includes expenditures for intervention purchasing and other price support measures, production and processing subsidies, set-aside and income support, monetary compensatory amounts, and stock depreciation. c U.S. export subsidies include net outlays of the Commodity Credit Corporation for the Export Enhancement Program, Dairy Export Incentive Program, Export Credit Guarantee Programs, and the Market Access Program. Foreign food aid is excluded. d U.S. domestic support includes net CCC outlays, including 1999 emergency assistance, interest payments, and operating expenses, minus CCC export outlays. Conservation Reserve Program spending is excluded. CRS-56 Producer Support Estimates (PSEs) in the United States and the European Union ! PSEs measure assistance to producers in terms of the value of transfers to farmers generated by agricultural policy. Transfers are paid either by consumers or by taxpayers in the form of market price support, direct payments or other support. They are a broader measure of support than direct government subsidies alone. PSEs can be expressed in money terms in aggregate or per unit of production, or in percentage terms. ! The PSE for all agricultural products in the EU declined from 44% to 39% from 1997 to1998, but rose to 49% in 1999. ! The PSE for all agricultural products in the United States which declined from 1986-88 to 1997, increased from 14% in 1997 to 24% in 1999. ! Products most heavily supported in the EU are beef and veal, milk, sugar, wheat, and oilseeds. ! Products most heavily supported in the United States are sugar, milk, wheat and corn. CRS-57 Producer Support Estimates (PSEs) Selected Commodities in the United States Wheat Oilseeds Sugar Milk Beef and Veal Percent 80 70 60 50 40 30 20 10 0 1986-88 1997-99 Source: OECD, 2000. Estimates for 1998 and 1999 are provisional. 1997 1998 1999 CRS-58 Table 22. Producer Support Estimates (PSE) in the United States by Commodity Percent Products 1986-88 (Average) 1997-99 1999p Wheat 49 37 25 39 46 Corn 38 24 14 27 30 Rice 52 17 10 15 26 8 15 4 15 25 Sugar 58 56 44 56 68 Milk 60 54 45 61 57 Beef and Veal 6 4 3 4 4 Pork 4 4 3 3 5 Poultry 13 3 3 3 4 All Products 25 20 14 22 24 Oilseeds Source: Organization for Economic Cooperation and Development, 2000. p 1998p 1997 = provisional CRS-59 Producer Support Estimates (PSEs) Selected Commodities in the European Union Wheat Oilseeds Sugar Milk Beef and Veal Percent 70 60 50 40 30 20 10 0 1986-88 1997-98 Source: OECD, 2000. Estimates for 1998 and 1999 are provisional. 1997 1998 1999 CRS-60 Table 23. Producer Support Estimates (PSEs) in the European Union Percent Products 1986-88 (Average) 1997-98 1999p Wheat 55 53 44 55 58 Corn 54 40 35 42 42 Rice 57 23 20 18 29 Oilseeds 66 47 49 46 46 Sugar 60 51 44 51 58 Milk 56 54 48 56 58 Beef and Veal 48 58 56 59 60 1 11 10 12 10 Poultry 22 23 20 12 35 All Products 44 44 38 45 49 Pork Source: Organization for Economic Cooperation and Development, 2000. P 1998p 1997 = provisional Agricultural and Trade Policies in the United States and the European Union United States European Union Domestic Support Producers of wheat, feed grains, upland cotton, and rice are eligible for production flexibility contracts entitling them to fixed but declining annual payments until 2002. Payments are based on established acreage and yields. A few planting restrictions apply and conservation rules must be observed. Holders of contracts qualify for nonrecourse marketing assistance loans and loan deficiency payments. Producers of soybeans, other oilseeds, and ELS cotton are not eligible for contract payments but are eligible for nonrecourse marketing assistance loans and loan deficiency payments. Substantial emergency assistance was provided to U.S. farmers in 1998, 1999, and 2000 to counter the effects of declining commodity prices and natural disasters. Prices of milk and dairy products are supported by an administered minimum price for milk, CCC purchase of dairy products, tariffs and import quotas. Other livestock products are not supported by administered prices. The price of sugar is supported above an administered minimum price by controlling supply through a tariff import quota. Agricultural support has been based primarily on market price support provided through institutional prices. For many commodities, these policies have been operated together with measures to limit the volume of production to which the price support applies. From 1993/1994 on, as part of the May 1992 reform of the Common Agricultural Policy (CAP), there has been some substitution of market price support by direct payments. For supported crops, direct payments are based on historical areas and yields and are operated in conjunction with a land set-aside requirement. Oilseeds support is based on area payments. For livestock products, direct payments are based on fixed reference numbers and for beef they are subject to limitations on stocking density. Further price reductions, part of Agenda 2000 reform have further reduced grain and meat prices and will be only partially compensated by increases in direct payments. CRS-62 Agricultural and Trade Policies in the United States and the European Union United States European Union Trade Measures Import quotas for dairy and sugar are subject to conversion to tariff quotas under the Uruguay Round Agreement on Agriculture Trade restrictions have been generally in the form of variable import levies and export subsidies. Export subsidies provided under the Export Enhancement Program (EEP) and other commodity specific subsidies are subject to reduction under the UR Agreement Variable import levies, which keep imported agricultural products at prices that are as high as EU internal prices, have been converted to tariff quotas as the EU implements the Uruguay Round Agreement on Agriculture. Export market development programs, MAP and FMDP, assist producer groups, associations, and firms with promotional and other activities. Export restitutions or refunds are provided to traders to cover the difference between internal EU commodity prices and world market prices. Export restitutions are subject to reduction commitments negotiated in the Uruguay Round Agreement on Agriculture. The CCC makes credit guarantees available to private financial institutions who lend to countries that want to purchase U.S. agricultural exports. The United States has negotiated free trade agreements with Canada and Mexico which cover substantially all agricultural trade among FTA signatories. EU countries (but not the EU itself) operate market development and export promotion programs funded by Government outlays and mandatory producer levies. France, Netherlands, and Germany have the largest programs devoted to promoting mainly exports of high value products. The EU does not have a broad export financing program. Individual countries have their own programs. France, for example, assists with export financing through the Company for International Trade Insurance (COFACE), which is majority held independently. COFACE commercial risk coverage is usually less than 3 years, but longer terms are available in certain cases. Several preferential trade arrangements have been concluded with former European colonies in Africa, the Caribbean, and the Pacific. More recently, some trade concessions for central and eastern European countries have been negotiated. CRS-63 Agricultural and Trade Policies in the United States and the European Union United States European Union Food Aid The United States is the world's leading supplier of food aid. It provides more than half of the global total. The United States provides food aid mainly through P.L. 480 also known as the Food for Peace program. Wheat and wheat flour are the main commodities provided as food aid, but rice and vegetable oils are also important in P.L. 480 programs. Higher value products are made available in special feeding programs. Responsibility for implementing food aid programs is shared by USDA and the U.S. Agency for International Development (AID). P.L. 480 food aid is provided on concessional terms (Title I) and as donations (Titles II and III). Title I food aid is intended to help develop overseas markets; Titles II and III are for humanitarian or developmental purposes. Two other food aid programs are conducted under Section 416(b) of the Agricultural Act of 1949 and the Food for Progress Act of 1985. The former provides surplus CCC inventories as donations; the latter provides concessional credit terms or commodity donations to support emerging democracies or countries making free market economic reforms. The EU provides about 1/3 of world food aid. EU food aid consists of two parts, EU aid and individual country bilateral programs. EU aid is distributed mainly through the United Nations' World Food Program; bilateral aid is distributed directly to receiving countries. Bilateral food aid constitutes about 70% of the total of EU food aid. All EU food aid is provided as donations. Wheat is the predominant commodity in EU food aid; lesser amounts of skim milk powder, vegetable oils, sugar and pulses are provided. CRS-64 Agricultural and Trade Policies in Canada and Australia Canada Australia Domestic Support Agricultural policy involves a broad range of measures implemented by both the Federal and Provincial Governments. Producers of grains and oilseeds receive assistance under a FederalProvincial income stabilization program. Assistance through transport subsidies has been eliminated. The Canadian Wheat Board (CWB) has an exclusive right to purchase wheat produced in Manitoba, Saskatchewan, Alberta, and the Peace River Valley of British Columbia, and to export it or sell it domestically. Producers of livestock receive support under the National Tripartite Stabilization Programs, funded by the Federal and Provincial Governments and producers. Farmers can participate in the Net Income Stabilization Account (NISA) program. Farmers set aside money in individual accounts, which is then matched by Federal and Provincial treasuries. Farmers can make withdrawals when their incomes fall below their 5-year average returns after costs, or when their taxable incomes fall below a fixed level. Supply management systems exist for several commodities, including milk, poultry, and eggs. Marketing boards set producer prices and production quotas for some commodities. Provincial governments operate other, autonomous programs, often through provincial marketing boards. About one-third of total budgetary expenditure for Canadian agriculture is provided by Provincial Governments. Both Commonwealth and State programs provide funds for farm restructuring, rural development and research, and income-tax concessions. Under the Rural Adjustment Scheme, the Commonwealth offers interest rate subsidies on commercial loans for productivity improvements, short-term downturns, or reestablishment after leaving farming. Excise taxes on diesel fuel used in off-road vehicles and machinery are refunded under the Diesel Fuel Rebate Scheme. The Commonwealth guarantees Australian Wheat Board loans used to finance advance payments to wheat producers. A large number of statutory marketing boards exist at the Commonwealth and State levels. The purposes of these boards are to increase producer returns, stabilize prices, and assist with marketing. States impose supply controls on milk. Some States impose supply controls on eggs, sugar, and rice. Marketing arrangements operate in some States for barley, sorghum, corn, rice, and tobacco. CRS-65 Agricultural and Trade Policies in Canada and Australia Canada Australia Trade Measures Import quotas apply to imports of certain products, particularly dairy, poultry, and eggs, and are used in conjunction with supply management schemes for those products. The Uruguay Round Agreement requires that these quotas be converted to tariffs with some minimum access for imports provided. Tariffs protect sugar, tobacco, and processed fruit and vegetables. A tariff-rate quota applies to cheese imports from all countries except New Zealand A tariff rate quota on imports of boneless beef applies to imports from all countries except the United States and Mexico, Canada's partners in NAFTA. Manufacturing milk (milk used in the manufacturing of dairy products) is supported through export subsidies financed by levies on all domestic milk production. Canada agreed to gradually eliminate its tariffs on most U.S. agricultural products under the bilateral free trade agreement with the United States. It reached a separate bilateral agreement with Mexico under the North American Free Trade Agreement, which also requires a scheduled elimination of tariffs on most agricultural products. AWB Ltd., the privatized version of the Australian Wheat Board has monopoly control of wheat exports. A Crown corporation is the sole exporting authority for sugar in Queensland, the main sugar producing state. The Federal Government guarantees export credit for wheat exports, usually for 3 years or less. It is also responsible for debt of the Canadian Wheat Board, which can borrow money to finance wheat sales. Canada promotes exports, including agricultural exports, through the Program for Export Market Development. Assistance is made available to commodity associations. Some important commodity groups and associations fund all are part of their own export market development activities. Provincial Governments have modest export promotion programs. Local content restrictions apply to fruit juices and tobacco. The Commonwealth provides export credit for wheat exports and extends credit insurance. The Australian Wheat Board makes sales on credit terms. The Government's Export Finance and Insurance Corporation provides export insurance and insures credit sales by the Australian Wheat Board. Export promotion is provided primarily by commodity marketing boards and associations; the Commonwealth Government provides only modest assistance to promote agricultural exports. CRS-66 Agricultural and Trade Policies in Canada and Australia Canada Australia Food Aid Canada is the third largest provider of food aid. Food aid is administered as part of Canada's foreign aid program; the Canadian International Development Agency (CIDA) is responsible for implementing the program. Food aid is donated and used to help recipient countries reform their agricultural policies or to meet humanitarian emergencies. In 1994, 60% of Canadian food aid was distributed multilaterally, mainly through the U.N. World Food Program. Wheat and wheat flour make up the largest portion of Canadian food aid. Non-grain products, especially canola (rapeseed) oil, pulses and fish account for about a third. Australian food aid is provided mainly to meet disaster or emergency situations. Australian food aid is provided both bilaterally and through the U.N. World Food Program. The main commodities provided under Australia's food aid program have been wheat, rice, and wheat flour. Other commodities include vegetable oils, peas, and biscuits.