Agricultural Competitiveness

GAO reviewed issues affecting U.S. agricultural exports, focusing on: (1) the growth and decline in U.S. agricultural exports; (2) factors affecting the competitiveness of international trade; and (3) the consequences of a declining world market.

GAO found that: (1) in fiscal year 1982, U.S. agricultural exports began a downward trend that resulted from changing global macroeconomic conditions, domestic farm programs, and international trade policy decisions; (2) foreign competition intensified as global agricultural production increased and world trade declined; (3) high price-support levels contributed to declining exports because foreign competitors used the support levels as a basis for pricing their exports and setting production levels; and (4) past agricultural policies failed to recognize international supply and demand factors and lacked the flexibility to adjust to changes in economic or environmental conditions. Options for increasing the demand for U.S. farm exports include: (1) assisting countries with limited hard currency reserves through barter and countertrade arrangements; (2) increasing the use of long-term bilateral sales agreements; (3) emphasizing the export of processed food products; and (4) improving the quality of U.S. grain shipments.