U.S. Wheat Associates (USW) is disappointed that, once again, a new national Farm Bill could not be passed and implemented on time. This all too common outcome is more concerning for wheat growers and our entire agricultural industry this time because the future of a highly successful export market development program hangs in the balance.
In the current Farm Bill, 39 programs that received mandatory funding at $50 million per year or less do not have a baseline budget beyond FY-2018 that ends on Sept. 30. If this Congress can’t agree on a new Farm Bill, an extension of the current Farm Bill would have to include additional funding, or these programs would disappear. The Foreign Market Development (FMD) program, administered by USDA’s Foreign Agricultural Service, has a budget of $34.5 million per year, making it one of these “orphan” programs.
“The FMD program is fundamental to our work promoting U.S. wheat around the world,” said Vince Peterson, President of U.S. Wheat Associates, which is one of 23 organizations awarded FMD funding in FY-2018. “We use FMD funding to cover the salaries of more than 40 non-American employees and expenses for 14 overseas offices. With no FMD allocation, we will have to cover costs incurred after October 1 by shifting funds away from our activities or by using reserves from producer funds. That is a short-term bridge that we have used in the past. But it is not sustainable for more than several months; beyond that, we would have to start cutting activities and eventually closing offices.
“This comes at a particularly bad time as wheat export markets have been hard hit by the effects of the tariff retaliation that has come from both China and Mexico this year,” Peterson added. “USDA calculated tariff losses to the wheat industry at close to $250 million and that meter is running. Without our cornerstone market development funding program, our ability to limit those losses, prevent further erosion in our reputation and get our exports back on track is severely handicapped.”
U.S. Wheat Associates is encouraged that the legislation in conference now includes a long-term fix for the FMD budget issue. And, when budget fights or late Farm Bill passage held up FMD and Market Access Program allocations in the past, retroactive funding was made available. However, USW must now bridge the gap caused by another delay without undermining its work for farmers in the competitive world wheat market — and hope that it is not building a bridge to nowhere.