Chairman Frank Lucas today released the following statement on Scott O'Malia's last day as Commissioner of the Commodity Futures Trading Commission (CFTC). Last month, O’Malia announced he would resign to pursue other opportunities.
President's Support for Credit Sales Good for U.S. Farmers
Preparing to lead next month's agricultural delegation to the World Trade Organization (WTO) talks in Seattle, House Agriculture Committee Chairman Larry Combest (R-Texas) hailed the president's recent granting of export credit guarantees for agricultural sales as a valuable trade tool for U.S. farmers and ranchers.
U.S. export credit guarantees provide federal backing as security to the financing of large-scale commercial sales of U.S. agricultural commodities to nations overseas. Chairman Combest commended the presidential determination that made possible the sale of wheat to India and Pakistan. Combest noted that export credit guarantee programs are vital to the success of U.S. farmers in the competitive world of agricultural trade.
"Farmers live to grow and sell their crops to feed a hungry world, banks are in business to finance the deals, but it ultimately the federal government must stand behind its stated support for American trade," said Combest. "In the case of export credit guarantees, this government must put its money where its mouth is, knowing full well that the cost is little compared with the risk of lost trade sales."
"U.S. exports face tremendous competition from State Trading Enterprises, which have the advantage of a government-backed monopoly status," said Charlie Stenholm (D-Texas), the Committee's ranking minority member. "Our export credit guarantee program has proven to be a vital tool in facilitating U.S. exports in the face of this unfair advantage, and U.S. agricultural exporters cannot afford to forego the market opportunities afforded by this program."
The export credit guarantees, (also known as the GSM-102 Export Guarantee Program), ensure the repayment of short-term credits of 90 days to 3 years extended by U.S. financial institutions to eligible foreign banks for the commercial sales of U.S. agricultural products.
As U.S. trade negotiators prepare for upcoming World Trade Organization talks, other nations claim the export credits give the United States a trade-distorting advantage.