CRS Issue Statement on Agricultural Trade
and Development
Charles E. Hanrahan, Coordinator
Senior Specialist in Agricultural Policy
January 25, 2010
Congressional Research Service
7-5700
www.crs.gov
IS40253
CRS Report for Congress
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repared for Members and Committees of Congress
CRS Issue Statement on Agricultural Trade and Development
he United States is the world’s leading commercial exporter and importer of agricultural
products. At the same time, the United States is the world’s largest provider of food
T security assistance in the form of U.S. commodities for food aid. The Obama
Administration has called for a substantial increase in U.S. agricultural development assistance
for food-insecure countries.
Agricultural exports are important both to U.S. farmers and to the U.S. economy. Production from
almost a third of harvested acreage is exported, including an estimated 48% of food grain
production, almost 20% of feed grains, and about 36% of U.S. oilseeds. Cotton exports amounted
to more than 80% of production in 2009. The United States is a net exporter of agricultural
products. Agricultural exports in FY2010 are forecast by the U.S. Department of Agriculture
(USDA) to be $98 billion. With estimated agricultural imports of $77.5 billion, the FY2010
agricultural trade surplus would be $20.5 billion. Exports also generate economic activity in the
non-farm economy. According to USDA, each $1 received from agricultural exports stimulated
another $1.61 in supporting activities to produce those exports. Recent data show that agricultural
exports generate an estimated 841,000 full-time civilian jobs, including 441,000 jobs in the non-
farm sector.
Expanding market opportunities for U.S. farm products through bilateral, regional, and
multilateral trade negotiations has been a long-standing aim of U.S. trade policy. The U.S.
agricultural sector has, for the most part, looked to trade agreements as a means to increase U.S.
farm exports. Bilateral agreements reached with Canada and Mexico (NAFTA), Australia, and a
group of Central American countries, among others, have resulted in increased agricultural trade
for all parties involved. U.S. and global agricultural trade has benefited as well from multilateral
trade liberalization under World Trade Organization (WTO) auspices. However, some commodity
sectors face potentially greater competition under trade liberalization and view trade agreements
less favorably. The fate of bilateral agreements negotiated with South Korea, Colombia, and
Panama by the previous Administration is uncertain and the future of multilateral trade
negotiations in the WTO is a question mark. At the same time, the Obama Administration has
notified Congress that the President will enter into negotiations of a regional Asia-Pacific trade
agreement, known as the Trans-Pacific Partnership (TPP) Agreement.
G8 and G20 leaders have called for completion of the Doha Round of WTO trade negotiations by
the end of 2010. The U.S. Trade Representative has called for aggressive bilateral negotiations,
especially with large developing countries like India, Brazil, and China, as a way to bring the
Doha Round to a conclusion. Thus, continuing Doha Round negotiations, and their implications
for U.S. farm policy, are likely to be closely followed during the 111th Congress.
While multilateral negotiations are stalled, litigation of disputes in the WTO’s Dispute Settlement
Body (DSB) has become a means for achieving trade policy objectives not yet attained through
negotiations. A decision by the DSB in favor of Brazil’s challenge to U.S. cotton subsidies, for
example, accelerated the process of U.S. farm program changes outside of farm bill deliberations.
The 111th Congress could be confronted with decisions in other WTO disputes that would require
changes in U.S. farm policy in advance of the expiration of the current farm bill in 2012.
In addition to commercial exports, the United States also provides substantial commodity food
aid to promote food security in poor countries. Global food and economic crises in 2008 and 2009
pushed the
number of food-insecure or hungry people worldwide to historic levels—more than 1
billion people are undernourished, according to estimates by the United Nations (U.N.) Food and
Agriculture Organization (FAO). In addition, the U.N. Secretary General reports that the
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CRS Issue Statement on Agricultural Trade and Development
proportion of hungry people in the world has risen as a result of global food and economic crises.
This rise in the proportion of hungry people threatens achievement of the U.N.’s Millennium
Development Goal (MDG) of reducing the proportion of hungry people in the world by one-half
by 2015.
The main U.S. response to global food insecurity has been to provide U.S. commodities as
humanitarian food aid. Agricultural development also has been a significant component of the
United States’ foreign aid program, but U.S. funding for such aid is a smaller percentage of total
U.S. aid than in the 1980s.
In his inaugural address, President Obama signaled that alleviating global hunger would be a top
priority of his Administration. The Department of State has taken the lead in developing a U.S.
global food security strategy that focuses on agricultural and rural development. The G8 and G20
Summits and the FAO-sponsored World Food Summit in Rome have all endorsed the
Administration’s food security concept and pledged financial support for a global effort. World
leaders stress that humanitarian food assistance (along with other social and safety net
protections) would continue to be an important component of a global food security strategy.
Congress plays a central role in funding and overseeing agricultural development programs,
which are administered by several U.S. agencies and international organizations. Most
development assistance programs are authorized by either the Foreign Assistance Act of 1961
(P.L. 87-191, as amended) or any of three food aid laws: Title II of the Food for Peace Act (P.L.
480); Section 416(b) of the Agricultural Act of 1949; and the Food for Progress Act of 1985.
Congress typically influences development assistance programs through the appropriations
process, most notably through congressional earmarks. The United States also works through
multilateral institutions to deliver agricultural development assistance.
Bills that would authorize and fund aspects of the food security initiative have been introduced in
the 111th Congress. These include bills to increase support for agricultural development assistance
as well as food security safety net assistance. Proposed legislation to broadly revise the
authorizing statute for U.S. foreign assistance would be relevant to the global food security
initiative as well.
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CRS Issue Statement on Agricultural Trade and Development
Issue Team Members
Charles E. Hanrahan, Coordinator
Renée Johnson
Senior Specialist in Agricultural Policy
Specialist in Agricultural Policy
chanrahan@crs.loc.gov, 7-7235
rjohnson@crs.loc.gov, 7-9588
Carol Canada
Remy Jurenas
Information Research Specialist
Specialist in Agricultural Policy
ccanada@crs.loc.gov, 7-7619
rjurenas@crs.loc.gov, 7-7281
J. Michael Donnelly
Randy Schnepf
Information Research Specialist
Specialist in Agricultural Policy
mdonnelly@crs.loc.gov, 7-8722
rschnepf@crs.loc.gov, 7-4277
Ian F. Fergusson
Carolyn C. Smith
Specialist in International Trade and Finance
Information Research Specialist
ifergusson@crs.loc.gov, 7-4997
csmith@crs.loc.gov, 7-7798
Jeanne J. Grimmett
Melissa D. Ho
Legislative Attorney
Analyst in Agricultural Policy
jgrimmett@crs.loc.gov, 7-5046
mho@crs.loc.gov, 7-5342
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