USDA PROPOSES LEGISLATIVE CHANGES TO COTTON AND EXPORT CREDIT PROGRAMS

"By implementing these proposed changes, we are being fully responsive to the WTO decision," said Johanns. "This step is essential for United States to continue to be a leader in the WTO Doha negotiations, which are crucial to U.S. market access and the long-term prosperity of our farmers and ranchers. We very much appreciate the close cooperation of the industry groups in developing this approach and will work with the Congress as this proposed legislation is considered."

The proposed statutory changes would eliminate the Step 2 program, remove a one-percent cap on fees that can be charged under the export credit programs, and terminate the Intermediate Export Guarantee Program ( GSM-103 ).

Repealing the Step 2 program would remove both the export subsidies and import substitution subsidies that the WTO cited and address issues related to suppression of cotton prices in world markets. Eliminating the one-percent fee cap would make the Export Credit Guarantee Program more risk-based. Terminating the GSM-103 program would reinforce the recent U.S. decision to stop using longer-term export credit guarantees.

On June 30, USDA announced that beginning July 1, the Commodity Credit Corporation ( CCC ) would use a risk-based fee structure for the Export Credit Guarantee Program ( GSM-102 ) and the Supplier Credit Guarantee Program ( SCGP ). Fee rates are now based on the country risk that CCC is undertaking, as well as the repayment term ( tenor ) and repayment frequency ( annual or semi-annual ) under the guarantee. The new structure responds to a key finding by the WTO that the fees charged by the programs should be risk based.

In addition, the CCC no longer accepts applications for payment guarantees under GSM-103. Any remaining country and regional allocations for GSM-103 coverage under fiscal year 2005 program announcements will be reallocated to the existing GSM-102 program for that country or region.

Author:  

Email:    

Topic:    

Content:

Related Articles

• More States Giving Consumers Power to Freeze Credit Files;
  5 July 2005



• Heating Oil Partners Income Fund Provides Update on Credit Facilities
  5 July 2005



• CMS installs Corporate Credit Manager Energy version for Premcor
  30 June 2005



• Credit Repair System Is Also A Real Cash Cow
  29 June 2005



• Power 1 Credit Union to Host Fundraiser for Florida State Representatives
  24 June 2005



• Research and Markets: Credit Card Issuer Safety Scorecard: Ranking Top 39 Issuers on Fraud Safety Concerns
  23 June 2005



• What Everybody Ought to Know about Protecting Themselves from Credit Card Fraud and Identity Theft
  22 June 2005



• If Your Business Accepts Credit Cards, be Aware and be Prepared - Identity Theft, Hackers & Fraud...
  21 June 2005



• Sears Canada to Evaluate Strategic Alternatives for Credit and Financial Services
  14 June 2005



• Erase Bad Credit and Smash all your Debts.
  13 June 2005