Kimberley C. Hollon. T AMRDC Working Paper No. WP-I-89. October 1989

Transcription

1 PROBLEM ENCOUNTERED BY AGRICULTURAL MARKETING FIRM IN FOOD AND AGRICULTURAL PRODUCT EXPORTING: ANAL YI OF URVEY REULT- Kimberley C. Hollon T AMRDC Working Pper No. WP-I-8 October 8 Awrd-winning pper presented t AAEA Undergrdute Pper Competition, First Plce, Bton Rouge, Louisin, August 8. The uthor wishes to thnk Dr. Fred J. Ruppel, principl dvisor, Dr. H. L. Goodwin, co-dvisor, nd Drs. John Nichols, Wes Peterson, Gry Willims, Crl hfer, teve Fuller, John toll, nd Ron Griffin for their comments nd suggestions. Mr. Pul Lewis, the Texs Deprtment of Agriculture nd the Deprtment of Agriculturl Economics, Texs A&M University, both provided finncil ssistnce. enior Undergrdute tudent, Deprtment of Agriculturl Economics, Texs A&M University, College ttion, Texs. Mjor Advisor: Dr. Fred Ruppel.

2 PROBLEM ENCOUNTERED BY AGRICULTURAL MARKETING FIRM IN FOOD AND AGRICULTURAL PRODUCT EXPORTING: ANALYI OF URVEY REULT Pper Presented t AAEA Undergrdute Pper Competition, Bton Rouge, Louisin, August 8. Texs Agriculturl Mrket Reserch nd Development Center (TAMRDC) Working Pper No. WP -8 by Kimberley C. Hollon, enior Undergrdute, Deprtment of Agriculturl Economics, Texs A&M University, College ttion, Texs 778 ABTRACT: Agriculturl mrketing firms encounter mny problems in their exporting efforts. Unfortuntely, mny of these problems deter vlue-dded firms in prticulr from exporting, nd their potentil contribution to reducing the United ttes' trde deficit could be substntil. This pper evlutes potentil problems common to griculturl exporting firms to determine mjor deficiencies in trde support services. A three-pge survey ws miled to Texs griculturl firms, 55 of whom responded. urvey responses were elicited for three problem res (Knowledge Gps, Mrketing nd Mrket Access, nd Export Finnce) long three time frmes (trt-up, Ongoing, nd Expnsion). An nlysis of the mens of the survey items showed strt-up nd finncil problems to be the res of gretest concern to griculturl exporters. Furthermore, export finnce problems were found to be especilly troubling for smller firms nd firms with fewer yers of export experience. A revised, comprehensive export policy with n emphsis on finncil ssistnce trgeted to smller firms or designed to encourge new exporters could serve to increse totl United ttes' griculturl exports while helping those who re not ble to compete effectively in existing world mrket structures. The Texs Agriculturl Mrket Reserch nd Development Center (TAMRDC) celebrted its 0th nniversry of providing timely nd unique reserch on issues ffecting griculturl mrkets nd commodities importnt to Texs nd the ntion this yer. T AMRDC is mrket reserch service of the Texs Agriculturl Experiment ttion nd the Texs Agriculturl Extension ervice. The min objective of T AMRDC is to conduct reserch leding to more efficient mrketing of Texs And U.. griculturl products in domestic nd intemtionl mrkets. Reserch res include domestic nd foreign mrket opp0tunities for Texs nd U.. produced griculturl products; mrketing of ttditionl bulk nd high vlue/vlue-dded products in globl setting; the impct ofnew technologies on mrkets nd price,' efficiency of mrket infonntion systems; mrket structure nd perfonnnce; consumer ttitudes nd preferences.

3 Problems Encountered By Agriculturl Mrketing Firms In Food And Agriculturl Product Exporting: Anlysis of urvey Results One of the mjor problems fcing the United ttes economy is its mssive trde deficit. The positive overll trde surpluses of the 50's nd 60's ended in thee 70's, primrily due to the OPEC oil embrgo. The trde deficit incresed from $5 billion in 8 to $50 billion in 8, with little evidence of significnt reversl in the future. The trde blnce consists of non-griculturl trde deficit, which hs incresed throughout the 80's, nd n griculturl trde surplus, which hs declined in the pst eight yers from $6 billion in 8 to $5 billion in 8 (UDA, ER). Thus, the bility of the griculturl trde surplus to counterct the non-griculturl deficit hs been diminished. Further investigtion of griculturl exports revels the contribution which hs been mde by the vlue-dded sector. Approximtely 50% of the United ttes' griculturl export revenue in 87 ws generted by processed foods (Ruppel). In the future, the demnd for vlue-dded exports is likely to grow more rpidly thn the demnd for bulk commodities s countries become more developed, their incomes rise, nd vlue-dded foods become more ffordble option. The importnce nd success of these vlue-dded griculturl firms depends on their bility to penetrte foreign mrkets. The collective contribution of n increse in the number of griculturl exporting firms could hve substntil effect on the mounting United ttes' trde deficit. In ddition to the contributions tht griculturl exports mke to the trde blnce, there re mny other benefits. For every $ billion of United ttes exports, there re 5,000 jobs creted (University of Houston mll Business Development Center). ince the world popultion is incresing t fster rte thn tht of the United ttes, export mrkets represent vst potentil growth mrket (de ilv). There re lso direct benefits to the exporting firm. The dditionl sles volume trnsltes into lower unit costs through economies of scle, nd thus greter profits. A stbiliztion of totl sles ptterns often results from exporting, s overses sles tend to moderte sesonl or cyclicl conditions in the domestic mrket. Vrious federl, stte, nd locl progrms hve been encted with the specific gol of enhncing United ttes griculturl exports. The Agriculturl Trde Development nd Assistnce Act of 5 (PL-80) ws one of the first. This Act creted the Foreign Agriculturl ervice's

4 Coopertor Progrm nd Export Enhncement Progrm, which together with PL-80's concessionl progrms wsdesigned to rid the government of its mssive ccumultion of CCC stocks. There ws very little export legisltion in the 60's or 70's. Recently, however, the Trgeted Export Assistnce progrm ws creted in the Food ecurity Act of 85, nd the Agriculturl Trde nd Competitiveness Act of 88 clled for the development of Interntionl Agriculturl Trde Development Centers to ssist in the export of griculturl commodities nd products. At the stte level, the Texs World Trde Development Act in My of 85 etblished the Texs World Trde Council nd the Texs World Trde Development Authority to fcilitte the ctivity of Texs businesses involved in interntionl commerce. Other mjor exporting sttes hve similr progrms. ttewide services trgeted towrds griculture include the Texoort Food nd Fiber Directory, published by the Texs Deprtment of Agriculture, nd designed to mtch Texs griculturl suppliers with buyers brod. The University of Houston mll Business Development Center provides eductionl services, counseling, business development services, nd network ctivities. Texs is rnked fourth in the ntion mong sttes tht benefit from federlly-supported trde nd foreign economic ssistnce disbursements (pnhel). Although these federl nd stte policies re well-intended, they do not ddress problems unique to smll nd mid-sized griculturl firms, s mny of these policies re trgeted towrds non-griculturl firms or to lrge griculturl firms deling in bulk commodities. They lso reflect very uncoordinted pproch to export expnsion, s evidenced by the scttered nture of the progrms. Finlly, current policies do not dequtely ddress strt-up or finncil problems, res tht re in prticulr need of ttention. Problems fcing griculturl exporters cn be ctegorized into three res: knowledge gps, mrketing nd mrket ccess, nd export finncing. Knowledge gps include indequte price, economic, nd socil informtion needed by n exporting firm. Exmples of knowledge gp problems include indequte country-specific informtion, lck of informtion sources for ssistnce with export questions, lck of coordinted trde services, nd ignornce concerning import restrictions. The mrketing nd mrket ccess problem re is ssocited with problems in the flow of goods from the production point to the finl consumer. Exmples of problems in this re include poor knowledge of emerging mrkets, foreign mrket entry problems, product dpttion nd promotion,

5 nd interntionl trnsporttion logistics. Finncil problems re those encountered in the finncing of export ctivities domesticlly nd interntionlly, such s credit vilbility for export expnsion, bnking ssistnce, exchnge rte nd interest rte vribility, nd export tx tretment. Collectively these problems my cuse "fer" of exporting, especilly mong griculturl firms with little or no experience in interntionl trde. Thus too few firms enter wht could be potentilly lucrtive mrkets. Reserch Objectives The objective of this pper is to ssess the problems confronting Texs griculturl exporters. This objective will be ccomplished through the nlysis of survey of Texs griculturl exporting firms in April, 8. This ssessment will proceed long two fronts, the first concerning the three problem res mentioned bove (knowledge gps, mrketing spects, nd export finncing), nd the other relted to the time dimension of these problems. The time dimensions re ctegorized into strt-up, ongoing, nd expnsion phses, where strt-up problems re those ssocited with the initil export experience, ongoing problems re reflected in dy-to-dy opertions, nd expnsion problems re those ssocited with firm's movement into dditionl product lines or new countries. An implicit null hypothesis throughout this study is tht ll export problems re equl. In other words, firms on verge would view knowledge, mrketing, nd finncil brriers to be of equl difficulty, s would be problems ssocited with the strt-up, ongoing, nd expnsion phses of exporting. The results nd conclusions from this nlysis will be relevnt to stte nd federl gencies in identifying the res of trde support services in gretest need of improvement. Methods A survey entitled "Problems Encountered in Food nd Agriculturl Product Mrketing" ws miled to griculturl exporting firms listed in the Texs Deprtment of Agriculture's 8-0 TexDort Food nd Fiber Directory. The three-pge survey covered three mjor topicl res: Knowledge Gps nd Generl Issues, Mrketing Agriculturl Products Interntionlly, nd Finncil Aspects of Exporting. Ech re hd or items to which the pproprite firm decision-mker ws sked to respond. These items re listed in Figure. Also, s mentioned bove, there were

6 Figure I. Problems encountered in food nd griculturl product exporting KNOWLEDGE GAP AND GENERAL IUE. Lnguge brriers nd/or indequte overses telecommunictions fcilities. Lck of knowledge of culturl heritge in importing countries. Poor guidnce concerning ssistnce with export questions. Need to hire interntionl personnel 5. Indequte public mrketing strtegy for Texs export products 6. mll number of privte trding compnies nd export mrketing firms serving gribusiness 7. Absence of coordinted firm-oriented trde services network 8. Poor ccess to foreign mrkets due to import restrictions. Firm wreness nd firm-specific implictions of foreign sfety nd helth regultions 0. Knowledge of trde legisltion nd/or politicl considertions. Export competition from foreign nd domestic suppliers. Negotiting with foreign buyers MARKETING AGRICULTURAL PRODUCT INTERNA TIONALL Y. Assessment of firm's "rediness" to export griculturl products. Willingness to engge in long-term export plnning nd to mke long-term committment to exporting. Awreness of export profits potentil; need for n export-oriented benefit/cost nlysis. Poor knowledge of emerging mrkets or of country-specific informtion on potentilly profitble mrkets 5. Foreign mrket entry problems, overses product promotion nd/or selling through foreign distributors 6. Product diversifiction, modifiction, or dpttion necessry for interntionl mrkets 7. Lck of sttewide computerized trde led service 8. Absence of worldwide product-specific informtion on mrket conditions. Domestic trnsporttion nd hndling 0. Interntionl trnsport logistics, including freight coordintion nd insurnce vilbility. Pckge design for interntionl trnsport or foreign mrket regultions. Licensing regultions nd/or lbeling requirements. Complexity of the export trnsction, including documenttion nd "red tpe" FINANCIAL APECT OF EXPORTING. Enormous initil cpitl investment ssocited with exporting, including possible fcilities expnsion. Limited ccess to government-gurnteed export lons. Limited vilbility of commercil funds for export expnsion. Unwillingness of bnks to serve smll nd medium-sized businesses 5. Inbilities of locl bnks in interntionl business finnce 6. Inventory crrying nd lck of working cpitl finncing 7. Lck of fmilirity in legl mtters nd export terms of pyment 8. Length of time for pyment receipt for export trnsctions. Vrition in the exchnge vlue of the dollr 0. Risk of defult on pyment. Avilbility of risk insurnce for interntionl trnsctions. Confusion surrounding domestic nd foreign tx tretment nd/or investment incentives. High nd/or unpredictble interest rtes

7 three time frmes for ech item: trt-up, Ongoing, nd Expnsion. The respondents were sked to indicte their degree of concern on scle of to 7, depending on the nture of the problem. A severe problem ws indicted by 7, while minor problem ws indicted by I. Additionlly, "no problem" elicited zero response. Results of the survey were nlyzed by compring the mens of the item responses. Two types of nlysis were utilized. The first compred the mens of different vribles over the sme popultion. In this nlysis the mens of the responses were compred within problem re nd time frme, resulting in sets of (66 or 78) pirwise comprisons. Tht is, pirwise comprisons were generted for the mens of ech of the vribles within ech problem re nd time frme. The second type of nlysis ws comprison of mens of different clsses of respondents with respect to the sme vrible. For exmple, the mens between firms with mny yers of exporting experience nd firms hving only few yers of exporting experience were compred for significnt differences. The null hypothesis in both cses stted there ws no sigificnt difference between ech pir of mens. Results Of the firms surveyed, 55 usble responses were received (pproximtely 5 percent). Mens from survey responses were generted for ech item in the three problem res nd re presented in Tble. Three observtions re immeditely pprent. The first is the noticeble difference between the strt-up mens nd their mgnitudes, s compred to the ongoing nd expnsion phses. A totl of 7 out of 8 mens were higher in the strt-up phse thn in either the ongoing or expnsion phses. Differences between the ongoing nd expnsion mens re mixed. For some items, the ongoing phse is much more problemtic; for others, expnsion is more troubling. For still others, there is no discernible difference between the two. econdly, there is much less vribility mong the mens of the finncil items, s compred with the other two res. The knowledge nd mrketing mens rnge from. to.8 nd.8 to.50, respectively, wheres the finnce mens rnge from only. to.78. Even the mens for ech time frme within the finnce re disply reltively little vribility. The third observtion concerning Tble I concerns the problems identified s being of mjor.

8 Tble. urvey Results: Items Mens by Problem Are nd Time Frme KN(H.EDGE GAP MARKETING APECT FINANCIAL APECT ITEM TIME MEAN ITEM TIME MEAN ITEM TIME MEAN. Lnsuse 0 Brriers E "Rediness" 0 E Investment 0 Cpitl E Culturl 0 Beritse E Plnnins/ 0 COIIIIIittment E Gurnteed 0 Lons E Export 0 Assistnce E Benefit/ 0 Cost Anlysis E.5... COIIIIIercil 0 Funds E Interntionl 0 Personnel E Emersins 0 Mrkets E..7.. Bnks' 0 Unwillingness E Public 0 trtesy E Mrket 0 Entry E Bnks' 0 Inbilities E Mrketins 0 Firms E Product 0 Adpttion E Inventory 0 Cpitl E ervices 0 Coordintion E Computerized 0 Trde Leds E Lesl 0 Mtters E , 8. Import 0 Restrictions E. fety/belth 0 Resultions E Mrket 0 Conditions E. Domestic 0 LOistics E Pyment 0 Receipt E. Exchnse 0 Rtes E Trde 0 Lesisltion E Interntionl 0 Loistics E Pyment 0 Defult Risk E Export 0 Competition E Pckse 0 Dessn E Insurnce 0 Av!lbility E Foreisn 0 esotitions E Licensins/ 0 LbelUns E Txtion 0 E Complexity/ 0 "Red Tpe" E Interest 0 Rtes E

9 importnce, nd the problems seen s being of very little importnce. Items K, K6, nd M (interntionl personnel, privte trding compnies, nd domestic trnsporttion) hve prticulrly low mens in every time frme (compred to the other mens). On the other hnd, items K8 (import restrictions), KII (export competition), M (country-specific informtion), M5 (product promotion), nd Ml (complexity of the export trnsction) re high reltive to other mens. It is interesting to note tht none of the finncil mens re drmticlly different from one nother. The lrge mens in this ctegory seem to reflect the overll importnce of finncil problems. Problem Are nd Time Dimension Anlysis The observtions noted bove were tested sttisticlly using Anlysis of Vrince (ANOVA). A comprison of the mens of ech problem re by ech time frme generted Tble, with the x mtrix of prt () combining ll of the knowledge gp strt-up mens from Tble into one cell, the knowledge gp ongoing mens into nother cell, nd so on for ech of the three problem res with respect to ech of the three time frmes. Rownd column mens re lso provided. A comprison of the mens of Tble - by problem re nd by time dimension produced two distinct results. The first is tht the overll men of the finnce items (.) is lrger thn the mens of either the knowledge or mrketing items nd is significntly different from the overll knowledge men (.68). The second result is tht the strt-up men (.5) is both lrger thn nd significntly different from both the ongoing nd expnsion mens. As indicted erlier, mjor problems exist for exporting firms in the finnce relm nd in the export strt-up phse. Tble -b compres the sttisticl significnce of the mens of these nine cells with one nother in order to determine which combintions produce significnt differences. The probbilities of the t-sttistic testing whether the men of the row item reported in () is equl to the men of the column item re reported in the digonl mtrix. The verge knowledge strt-up men (.0) is significntly lrger (t the five percent level) thn the verge ongoing nd expnsion mens (.6 nd., respectively). Likewise, the mrketing strt-up men (.) is significntly lrger thn the mrketing ongoing (.68) nd expnsion (.66) mens. Interestingly enough, the verge finncil strt-up men is significntly different from the verge mrketing nd knowledge expnsion nd ongoing mens, but it is not significntly different from its own ongoing nd expnsion mens, s

10 Tble. urvey Results: Aggregte Mens by Problem Are nd Time Frme () trt-up Qn&oin& Expnsion Row Mens Knowledge Mrketing Finnce Column Mens (b) Knowled&e Mrketing Finnce -L....L -L....L - -L....L (Probbility vlues for It I) Knowledge 0 0.0* E 0.0* * 0.00* Mrketing * E * * 0.0* * 0.0* Finnce E ,5 0.8 * highlights probbility of 0.05 or less

11 there is much less vribility between the mens in the finnce re. Finlly, for ll problem res, the verge ongoing nd expnsion mens re not significntly different from ech other. Items Anlysis Pirwise mens comprisons of the vribles constituting ech cell of Tble - were performed so s to test for significnt differences. This nlysis resulted in 666 pirwise comprisons « ) ). Of these, 7 were significntly different t the five percent level, ll but four of these being within the knowledge nd mrketing problem res. Tble, which summrizes these results, revels tht four of the knowledge gp items, (K, K6, K8 nd K II) nd three of the mrketing items (M, M, nd M) hve lrge number of significntly different mens from other vribles within their own problem res. The knowledge gp problem re reveled items which were both mjor problems nd minor problems, s shown by their mens in Tble LItem K8, which refers to import restrictions, is mjor problem in the expnsion time frme, but is less prominent in the strt-up nd ongoing phses. If firm is contemplting expnsion, import restrictions will pose problem becuse expnsion with regrd to either new product lines or new countries will require dditionl knowledge nd effort. Item K II (export competition from foreign nd domestic suppliers) ppers to be n incresing problem over time. In the strt-up phse, the new firm is itself thret to existing firms. However, the longer firm exports nd its mrket nd product shres increse, export competition poses more of thret. Items K nd K6 reveled unusully low mens, which were significntly different from mjority of the other knowledge gp mens (prticulrly in the strt-up phse), implying tht the hiring of interntionl personnel nd the number of privte trding compnies in Texs re of little overll concern to Texs exporters. In the re of mrketing, items M, M, nd M generted high mens over ll time dimensions, prticulrly in the strt-up phse (see Tble I). It is not surprising tht country-specific informtion, foreign mrket entry problems, nd the export trnsction itself generte higher strt-up mens. One would expect these problems to lessen s exporting becomes more integrted prt of business, nd s fmilirity with foreign mrkets nd export trnsctions increses over time. These decresing mens re significntly different from other mrketing problems, so despite

12 Tble. Results of Pirwise Comprsions Within Problem Are nd Time Frme KNOWLEDGE MARKETING FINANCE Item.s. Q ~ um.s. Q ~ um.s. Q ~ wn (Nwnber of significnt differences between items) l s ,. ums

13 their decresing mgnitudes, the problems remin in every time frme. Item M (trnsporttion), with its low men, is significntly different compred to other mens in the strt-up phse, implying tht domestic trnsporttion problems re unimportnt in the erly going. A number of finncil items re bimodlly distributed. Tht is, the responding firms were split in their ssessment of ccess to government-gurnteed lons nd commercil funds, bnking ssistnce, nd working cpitl finncing (items F through F6) s either mjor or minor problems. This observtion offers n explntion s to why there were mrkedly few significnt differences mong the mens in the finncil re. A second type of nlysis involved comprison of the mens of ech of the 8 items over ll three time frmes to test for significnt differences between different clssifictions of firms. The firms were divided long two ctegories: dollr vlue of export sles nd yers of export experience. Concerning the former, the two sub-ctegories were firms with under $ million nd firms with over $ million in nnul export sles. For the ltter, firms were grouped s hving ten or more yers or under ten yers of export experience. The knowledge nd mrketing problem res yielded very few significnt differences in ny of the ctegories. Hence the nlysis ws limited to the finncil vribles. This ws fortuitous in tht none of the finncil problems could be singled out in the erlier nlysis. ix items stood out when the firms were split by vlue of export sles. ignificnt differences between lrge nd smll firms re shown by sterisks in Tble. Items F (gurnteed lons), F (bnks' unwillingness), nd F6 (inventory cpitl) yielded significnt differences in ll time frmes. Firms with high vlue of export sles rnked these problems lower thn those firms with lower vlue of export sles. The results for F (commercil funds) nd FlO (pyment defult risk) were much the sme, except tht their significnt differences were limited to only the ongoing nd expnsionry phses. Item F8 (pyment receipt) showed significnt differences in the expnsionry phse. Agin, the problems were greter for firms with lower nnul export sles. The second ctegory, yers of export experience, ws nlyzed in the sme mnner. Agin F nd F yielded significntly different mens in ll time frmes, while items F nd F5 (bnks' inbilities) yielded significnt differences in the ongoing nd expnsionry phses only. Not surprisingly, problems were greter for firms with less experience.

14 Tble : Finnce Items Mens by Firm ize nd Experience FIRM IZE EXPERIEICE TIME ITEM FRAME MM!. HALL ~ flti ~ (-5) (R-8) (R-) (R-) Investment Cpitl E *.56.6 *.50. Gurnteed * *. Lons E * * *.50. COIIIIlercil 0.0. *.0.55 *.5 Funds E..6 *..7 * *.6.68 *.7. Bnks' *..86 *.77 Unwillingness E. 5.8 *.0. * Bnks' *.5 Inbilities E *.5 6. Inventory Cpitl 7. Legl Htters 8. Pyment Receipt. Exchnge Rtes 0. Pyment Defult Risk.8.50 * E *.0 * E E.00. * E E * Insurnce Avilbility E Txtion E Interest Rtes E

15 Discussion nd Conclusions The objective of this reserch ws to ssess the problems fcing Texs griculturl exporting firms. The intent behind the objective ws to find wys to enhnce griculturl exports nd thereby contribute to the reduction of the mssive United ttes trde deficit. From the results, it cn be concluded tht mny firms indicte strt-up difficulties in ll problem res. Thus, progrms trgeted to new or potentil exporting firms would be one method of federl, stte, or locl intervention. This ssistnce could be offered in number of wys, such s informtion vilbility, mrketing expertise, or finncil ssistnce. However, since most of the firms in the survey indicted finncil problems in virtully ll phses of exporting, better solution might be to focus on offering more ttrctive nd pertinent finncil ssistnce to ll firms in ll phses of exporting, rther thn just limiting ssistnce to those in the strt-up phse. Expnsion cpitl, inventory finncing, high nd voltile interest rtes, nd lck of vilble government-gurnteed commercil funds for gribusiness firms re ll serious problems to the gribusiness industry. There re severl finncil progrms vilble cross the United ttes which serve s exmples. The Cliforni Export Finnce Progrm gurntees credit for exporters in coopertion with commercil bnks, while the Minnesot Export Finnce Agency hs smll reserve fund which cn be leverged four times to gurntee working cpitl lons to exporters (First Wshington Assocites). These progrms serve useful purposes, but re limited to one stte or re, nd thus ssist only geogrphiclly trgeted clientele. Policy in the United ttes should be more coordinted nd possibly redirected towrd gribusiness firms due to the unique nture of the problems ssocited with griculturl exporting. Europe's success with its flourishing trde centers is lrgely result of the vilbility of public sector funds nd consulting services to smll nd medium-sized businesses. Domestic policy could provide similr encourgement nd incentives for griculturl firms. The Export-Import Bnk (EXIM), the lrgest source of export finncing, does not compre in interest rte levels or in the degree of credit prticiption to countries like Frnce, Jpn, the United Kingdom, nd West Germny. EXM receives no nnul ppropritions, nd there is n nnul budget ceiling on export-import bnk disbursements. EXIM lso offers no insurnce ginst

16 exchnge rte fluctutions, nd most of their lons re not subsidized. Obviously, these shortcomings plce exporters in the United ttes t competitive disdvntge with respect to foreign competitors (pnhel). Mny countries like Algeri, prefer to purchse products from suppliers who offer better prices nd credit finncing. Becuse of the UDA's recent introduction of $0 million GM-0 credit gurntee for lumber nd wood, sles in those products hve incresed drmticlly (UDA, F A). imilr credit finncing gurntees could be mde vilble so tht griculturl firms could benefit from export sles s well. The survey results lso indicte tht country-specific mrket reserch, including export competition, mrket entry, nd product promotion re mjor problems. In British Columbi, n "incoming buyers" progrm reimburses exporters up to $,000 for visits to foreign countries when the purpose is to estblish interntionl business. They lso py for up to 00 percent of the exhibit spce nd rentl costs involved in foreign trde shows (First Wshington Assocites). Incentives such s these could be provided to smll nd medium-sized griculturl firms which often do not hve the resources necessry to develop overses mrkets. A vible solution to this problem might be the cretion of sttewide coopertive orgniztions which pool resources of gribusiness firms to fund the cost of showing their products t trde shows brod. Federl policy towrd griculturl export firms reflects lck of concern for smll nd medium-sized firms through its series of short-lived, uncoordinted progrms trgeted mostly towrd lrger or non-griculturl firms. Agriculturl businesses should be llowed to benefit from the incresed sles, profits, nd productivity ssocited with exporting. A revised, comprehensive export policy with n emphsis on finncil ssistnce trgeted to smller firms or designed to encourge new exporters could serve to increse totl United ttes' griculturl exports while helping those who re not ble to compete effectively in existing world mrket structures.

17 References Bender, Filmore E., Lrry W. Douglss, nd Amihud Krmer. ttisticl Methods for Food nd Agriculture. Connecticut A VI Publishing Compny, Inc., 8. de ilv, Dhrm. "Export Mrket Development in Chnging World." Nebrsk Business Development Center Report No., eptember 88. First Wshington Assocites. "A Comprehensive Pln for Improving Wshington tte's Interntionl Trde Development Progrms." Volume I (Executive ummry), June 87. Ruppel, Fred J. "Knowledge Gps Fcing mller Firms in Interntionl Agriculturl Product Mrketing." Journl of Food Distribution Reserch. Volume 0, No.., Februry 8. pnhel, Cynthi L. "Export Promotion: An Introduction." University of Texs t Austin, Deprtment of Mrketing Administrtion. August II, 86. pnhel, Cynthi L. "Texs Export urvey." University of Texs t Austin, Deprtment of Mrketing Administrtion. Austin, Texs. June, 87. tout, Hilry. "Export Dvids ling ome hots t Trde-Gp Golith." Wll treet Journl. Mrch, 8. Texs Deprtment of Agriculture. Texport 8-0 Food nd Fiber Directory. Austin, Texs. United ttes Deprtment of Agriculture, Economic Reserch ervice. Agriculturl Outlook. Jnury-Februry 8. United ttes Deprtment of Agriculture, Foreign Agriculturl ervice. "Algeri Offers Opportunities to United ttes Wood Exporters." Foreign Agriculture. My 88. University of Houston mll Business Development Center. "University of Houston mll Business Development Center Offers Interntionl Business Assistnce." Informtionl pmphlet, 8.