US TRADE PROMOTION PROGRAMS DEFENDED FEDERAL OFFICIALS SAY PLAYING FIELD FAR FROM LEVEL

US TRADE PROMOTION PROGRAMS DEFENDED FEDERAL OFFICIALS SAY PLAYING FIELD FAR FROM LEVEL

With federal trade promotion programs like the Export-Import Bank and the agricultural marketing promotion program barely surviving budget-cutting attacks on Capitol Hill, federal officials seized the opportunity to defend them during a farm products show here in the other Washington.

"We're still a long way from a fair and level playing field in world competition," said Eugene Moos, The U.S. Department of Agriculture's undersecretary for farm and agricultural services. "This is not a time to cut back on export programs."He told a group at the Washington State Agricultural Showcase that the European Union, for example, "will spend more on wine subsidies than we spend on our entire market promotion program."

While federal help in seizing market opportunities is legitimate, "we need to ask where our efforts should be concentrated and we need greater cooperation between USDA, states, trade groups and agribusiness to make sure those opportunities are open."

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JAPAN IS America's No. 1 agricultural customer and it is Washington state's best customer for farm products also, but the changes in the Japanese market and economy over the past few years "caught everyone flat-footed," said Scott Hitchman, director of the Washington State Agricultural Trade office in Tokyo.

The "deflationary economy" that the Japanese have been battling likely will continue for the rest of the decade, he said. Falling stocks and real estate values, uncertainties about wages and changes in Japan's distribution system are creating new opportunities for exporters, especially for food exporters.

"The Japanese consumer mindset has changed," said Mr. Hitchman. Previously, the focus was on prestige items, "but now many workers find they may be laid off and they are looking for value in what they buy.

"Washington growers are finding that the Japanese buyer is no longer so obsessed with a high-priced product that looks like it should be on display in a museum."

A significant long-term factor for U.S. exporters to track is the generational shift in Japan's farming population, he said. The average age of the farmers in Japan's apple growing region is 63 years, for example, and there appear to be few successors, said Mr. Hitchman, meaning that food production likely will decline in Japan within a few years.

All those items translate into a "tremendous opportunity" for Washington vegetable and fruit growers, he said.

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MEXICO'S CURRENCY crisis and resulting economic slowdown have hurt U.S. exports to that country, none more so than Washington apples. Shipments to Mexico this year - technically the 1994-1995 season - dropped 50 percent to 4 million boxes.

But Mexico still ranked as the No. 1 market for the state's apples, and coupled with other big and emerging export markets - Hong Kong, Taiwan, Indonesia, Israel, Latin America - Washington shipped a record 30.5 million boxes to foreign climes, out of a total production of 93 million boxes.

"It was an excellent year for exports," said Steve Lutz, president and chief executive officer of the Washington State Apple Commission. "I'm optimistic that the future is bright for Mexico" and that shipments there will return to previous levels, he said.

"This year's crop is superb," although it is not projected to be as large as the '94/'95 crop, said Jim Thomas, a spokesman for the apple commission. Even at an estimated 84 million boxes, it will be the second-largest crop ever, he said.

Japan opened its market to Washington apples for the first time in decades last year, but the country's phytosanitary requirements limit huge export numbers. About 500,000 boxes were shipped. This year additional acreage has been set aside for the Japanese market, "so hopefully more apples will be available in Japan and we'll expand our market share," said Mr. Thomas.

"It won't happen overnight, but we'll stick it out."