**TheForeign Agricultural Service**

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**June 1996**

The Agency and Its Mission 

The Foreign Agricultural Service (FAS) is an agency of theU.S. Department of Agriculture (USDA) that represents the diverseinterests of U.S. farmers and the food and agricultural sectorabroad. It also collects, analyzes, and disseminates informationabout global supply and demand, trade trends, and emerging marketopportunities. FAS seeks improved market access for U.S. productsand implements programs designed to build new markets and tomaintain the competitive position of U.S. products in the globalmarketplace. 

FAS also carries out food aid and market-related technicalassistance programs, as well as operates a variety ofCongressionally mandated import and export programs. FAS helpsUSDA and other federal agencies, U.S. universities, and othersenhance the global competitiveness of U.S. agriculture and helpsincrease income and food availability in developing nations bymobilizing expertise for agriculturally led economic growth. 

Formed in 1953 by executive reorganization, FAS is one of thesmaller USDA agencies, with a personnel strength of about 900.FAS operates worldwide with personnel located in more than 75posts covering more than 130 countries. Its overseas staff isbacked up by a team of analysts, negotiators, and marketingspecialists located in Washington, D.C. 

Annually, roughly 70 percent of the FAS budget is devoted tobuilding markets overseas for U.S. farm products. This includesthe funding for all of FAS' trade and attache offices overseas,as well as its work with U.S. commodity associations oncooperative promotion projects. The remaining funds cover othertrade functions, including the gathering and dissemination ofmarket information and trade policy efforts. 

Market Development 

Virtually every type of U.S. farm product entering world tradeis promoted by market development activities. FAS programs helpU.S. exporters develop and maintain markets overseas for hundredsof food and agricultural products ranging from bulk commoditiesto brand-name grocery items. 

Promotional activities are carried out chiefly in cooperationwith non-profit agricultural trade associations and firms thatagree to plan, manage, and contribute staff resources and fundsto support these activities. The largest of FAS' promotionalprograms are the Foreign Market Development Cooperator programand the Market Access Program (MAP). In addition, FAS sponsorsU.S. participation in several major trade shows and a number ofsingle-industry exhibitions overseas each year. 

Trade offices in 12 key market countries function as servicecenters for U.S. exporters and foreign buyers seeking marketinformation. U.S. agricultural trade offices and attache officesprovide foreign buyers with up-to-the-minute communication withpotential suppliers in the United States. They also assist U.S.exporters in launching products in overseas markets characterizedby different food preferences, social customs, and marketingsystems. 

International Trade Policy 

FAS coordinates and directs USDA's responsibilities ininternational trade agreement programs and negotiations, workingclosely with the U.S. Trade Representative's office in thiseffort. International trade policy experts within FAS helpidentify--and work to reduce--foreign trade barriers andpractices that discourage the export of U.S. farm products. 

In virtually every foreign market, U.S. agricultural exportsare subject to import duties and non-tariff trade restrictions.Trade information sent to Washington from FAS personnel overseasis used to map strategies for improving market access, pursuingU.S. rights under trade agreements, and developing programs andpolicies to make U.S. farm products more competitive. 

FAS has certain responsibilities with respect to imports ofagricultural products. The agency administers the quantities ofdairy products and sugar that enter the United States at thelow-tier duty of the tariff-rate quotas that resulted from theUruguay Round Agreement. 

Through a licensing system, FAS controls imports of about 70percent of all cheese and most other dairy products coming intothe United States. FAS also administers the tariff-rate quota forsugar and sugar syrups at the level determined by the Secretary,as well as several programs to permit domestic refineries andmanufacturers to use foreign sugar for re-exported productswithout disrupting the U.S. market. 

Statistics and Market Information 

FAS collects global crop and livestock production data andimport/export information provided by the attache service, U.S.agricultural traders, remote sensing systems, and other sources.FAS uses this information to prepare production forecasts andassess export marketing opportunities, as well as to trackchanges in policies affecting U.S. agricultural exports andimports. These analyses are used by policy makers, programadministrators, farmers, exporters, and others. 

FAS publishes nearly 200 commodity reports a year that presenta world picture of production, consumption, and trade flows forabout 100 crop and livestock commodities. These reports analyzechanges in international trading conditions and indicate marketopportunities for U.S. exporters. The agency also issues about1,000 news release and program announcements a year on a widerange of topics such as Export Enhancement Program initiatives,P.L. 480 (Food for Peace) allocations, export credit guarantees,export sales, and other fast-breaking news vital to U.S. farmersand exporters. 

Commercial Export Financing 

FAS provides U.S. agricultural exporters with short- andintermediate-term commercial financing support through theCommodity Credit Corporation (CCC) export credit guaranteeprograms. These programs, the Export Credit Guarantee Program(GSM-102) and the Intermediate Export Credit Guarantee Program(GSM-103), protect U.S. exporters or U.S. financial institutionsagainst risk if the importer's foreign bank fails to makepayment. The GSM-102/103 programs are designed to expand andmaintain foreign markets for U.S. agricultural commodities, andmay serve to help developing nations make the transition fromconcessional financing to cash purchases. CCC has proposed aSupplier Credit Guarantee Program. Under this program, CCC willguarantee a portion of the payments due from a private importerunder short-term financing (up to 180 days). This credit will beextended directly by exporters to importers for the purchase ofU.S. agricultural products. 

Concessional Sales 

The United States is the world's largest food aid donor. Overthe years, donated U.S. food has often meant a life-or-deathdifference to victims of earthquakes, floods, droughts, and civilstrife. The administration of U.S. food aid programs is shared bythe U.S. Department of Agriculture (USDA) and the Agency forInternational Development (A.I.D.) in providing assistance toneedy people around the world. 

USDA has available three channels for providing food aid: thePublic Law 480, Title I program, the Food for Progress program(FFP), and the Section 416(b) program. The Title I programprovides for long-term (up to 30 years) concessional sales ofU.S. agricultural commodities to help develop markets incountries in need of food assistance. The Federal AgricultureImprovement and Reform (FAIR) Act of 1996 modified the repaymentterms for Title I credit. The minimum repayment period of 10years was eliminated and the maximum grace period was reducedfrom 7 to 5 years. It also provided authority for entering intoagreements with private entities, including agricultural tradeorganizations in addition to the current government-to-governmentauthority. 

The FAIR Act also authorized changes to the FFP and theSection 416(b) Program. The FFP provides commodities to supportcountries that have made commitments to expand free enterprise intheir agricultural economies. The new legislation permitsagreements with inter-governmental organizations in addition toother governments and private entities. And, under the Section416(b) program, through which USDA donates surplus CCCcommodities overseas, local currencies derived from the sale ofthese commodities may be used to cover administrative expenses. 

A.I.D. administers Titles II and III of the Public Law 480program. Title II provides for the donation of agriculturalcommodities to meet emergency and non-emergency food needs. TitleIII provides for government-to-government grants to supportlong-term growth in the least developed countries.

Agricultural Linkages 

The Foreign Agricultural Service's International Cooperationand Development (ICD) program area enhances U.S. agriculture'scompetitiveness by providing linkages to world resources andinternational organizations and building a spirit of cooperation.These linkages produce new technologies that are vital toimproving the agricultural base and producing new and alternativeproducts. ICD helps scientists and leaders from other agencieswithin USDA, the university community, and elsewhere to establishrelationships. 

ICD also serves as a link between the technical expertise ofthe U.S. agricultural community and counterparts in Africa, Asia,Latin America, and the states of the former Soviet Union. In thisway, the U.S. agricultural sector gains access to emergingtechnologies and a wider array of genetic material, which can becrucial to creating new--and improving existing--agriculturalproducts, practices, and markets. At the same time, developingnations have access to the technical expertise that can help themsurmount the barriers of hunger and poverty and build more stableeconomies. 

 

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| *Last modified: Tuesday, April 21, 1998* |