07/11/05 USDA changes export credit programs

Farm and Ranch July 11, 2005 The U.S. Department of Agriculture has announced changes in three export credit guarantee programs to comply with a recent World Trade Organization decision that arose out a dispute with Brazil over cotton. The three Commodity Credit Programs that will be changed are the Export Credit Guarantee Program, or GSM-102, the Intermediate Export Credit Guarantee Program, or GSM 103 and the Supplier Credit Guarantee Program. Undersecretary J.B. Penn says the changes still allow the credit programs to work as intended. Penn: "We are trying to minimize any impact that the changes have. These programs were all put in place to achieve a purpose and so what we are trying to do is trying to make changes in the program that allows them to still achieve a stated purpose, but at the same time be fully compliant with the WTO that helps us meet out WTO obligations in every regard." The CCC is now using a risk-based fee structure for the GSM 102 and the Supplier Credit Guarantee Programs and the GSM 103 program is being phased out. U.S. Wheat Associates president Alan Tracy says it is logical to adjust fees according to risk and they can live with that. Tracy also says U.S. Wheat is eager to work with USDA to ensure that the implementation details work for the U.S. grain trade and U.S. customers. The USDA has also asked that congress eliminate the step 2 program which relates specifically to cotton and which the WTO ruled as illegal. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.