Table II below itemizes a summary of support and related operations: Table II: CCC Loan, Inventory, and Related Activities (millions of dollars) Exhibits 1 and 2 on the following pages depict the history of selected items on loan and inventory activities for fiscal years 1970 through 1994, and for fiscal years 1962 through 1994, respectively. COMMODITY LOANS MADE DURING THE YEAR AND OUTSTANDING LOANS AT THE END OF THE YEAR COMMODITY EXPORT ACTIVITIES The Corporation promotes the export of agricultural commodities and products through sales, payments, direct credit, credit guarantees, and the conduct of other activities related to the exportation of commodities. During fiscal year 1994, CCC commercial export credit activities consisted of credit guarantees under the Export Credit Guarantee Program and the Intermediate Export Guarantee Program. There was no credit activity under the short-term or intermediate direct export credit sales programs. Direct Credit CCC may provide financing of commercial export sales of eligible U.S. agricultural commodities through short-term and intermediate credit sales programs. These programs are not intended to displace cash sales, but are designed to maintain or expand overseas markets. The short-term export credit sales program (GSM-5) provides financing, on terms not to exceed three years, for the commercial sales of agricultural commodities from private stocks. Sales are made by U.S. exporters and require an assurance of payment from a U.S. or foreign bank. Repayments are made in U.S. dollars with interest at rates determined by the Corporation. These commercial transactions are financed under the Corporation's charter authority and section 201 of the Agricultural Trade Act of 1978, as amended by the FACT Act. From the beginning of the short-term export credit sales program in 1956 through September 30, 1994, sales of agricultural commodities amounted to approximately $9,649.2 million, with an additional $681.3 million in capitalized interest resulting from debt rescheduling. There has been no new program activity in fiscal years 1987 through 1994. Amounts outstanding under this program were $356.1 million as of September 30, 1994, most of which were rescheduled credits. This total also reflects $220.3 million in loans to Poland that were charged-off in fiscal year 1994. Principal repayments from inception through September 30, 1994, totaled $9,225.9 million, including $2.2 million in fiscal year 1994. Credit Guarantees In 1980, CCC instituted the Export Credit Guarantee Program (GSM-102) under its charter authority. With this program, for a fee, CCC guarantees payments 'due U.S. exporters under deferred payment sales contracts (up to 36 months) for defaults due to commercial as well as noncommercial risk. The risk to CCC extends from the date of export to the end of the deferred payment period covered in the export sales contract and covers only that portion of the payments agreed to in the assurance agreement. Operation of this program is based on criteria which will assure that it is used only where it is determined that it will develop new market opportunities and maintain and expand existing world markets for U.S. agricultural commodities. The program encourages U.S. financial institutions to provide financing to those areas where the institutions would be unwilling to provide financing in the absence of the CCC guarantees. Loan commitments incurred in fiscal year 1994 under the GSM-102 program were $4,212.8 million. In 1986, the Intermediate Export Credit Guarantee Program (GSM-103) was implemented by CCC under its charter authority as required by the Food Security Act of 1985. The program is similar to the Export Credit Guarantee Program (GSM-102), but provides for CCC guarantees to exporters for commodities sold on credit terms in excess of 3 years but not more than 10 years. The program also provides for adjusting the maximum amount of interest which CCC guarantees to pay under the payment guarantee and permits freight costs to be covered for breeding animals financed under the GSM-103 program. Loan commitments incurred in fiscal year 1994 under the GSM-103 program were $280 million. Export Promotion Activities in the Emerging Democracies The FACT Act of 1990 mandates that an additional $1 billion in export credit guarantees be made available between fiscal year 1991 and fiscal year 1995 for emerging democracies. The FACT Act also authorizes, for each of the fiscal years 1991 through 1995, a program for promoting agricultural exports to emerging democracies through the sharing of U.S. agricultural expertise. This assistance will be provided through teams consisting of agricultural consultants and government officials expert in assessing the food and rural business systems of other countries. The FACT Act, as amended by the Food, Agriculture, Conservation, and Trade Act Amendments of 1991, mandates the use for this purpose of not more than $10 million in CCC funds in any fiscal year from 1992 through 1995. Costs for the 1994 program were $8.2 million. Export Enhancement Program An export enhancement program was initiated in 1985 under which CCC funds or commodities are made available to exporters as bonuses to make U.S. agricultural products competitive in foreign markets. The FACT Act continues the Export Enhancement Program. By law, CCC must make a minimum of $500 million available in CCC commodities or cash each fiscal year to carry out the program. All sales involving bonus CCC commodities are intended to increase and enhance U.S. agncultural exports above what would have occurred in the absence of the program. Sales are targeted to specific markets to challenge competitors who subsidize their exports. Bonus payments to exporters may be made in cash, in kind, or through.commodity certificates which may be redeemed for CCC-owned commodities. No fiscal year 1994 bonus payments were made in CCC commodity certificates. Fiscal year 1994 bonus payments made in cash totalled $1.1 billion. Market Promotion Program (formerly TEA) The Targeted Export Assistance Program was authorized by the Food Security Act of 1985, and has been succeeded by the Market Promotion Program under the FACT Act of 1990. The program mandates the use of CCC funds or an equivalent value of CCC commodities to encourage the development, maintenance, and expansion of commercial export markets for agricultural commodities through cost-share assistance to eligible trade organizations. A program level of $100 million was established by statute for fiscal year 1994. Cash payments in fiscal year 1994, including payments from prior year programs, totalled $148.812 million against agreements totalling $100 million. Certificate issuance discontinued in fiscal year 1991 and a cash program was implemented. |