USDA EXPECTS TO USE ALL EEP FUNDS IN '90

USDA EXPECTS TO USE ALL EEP FUNDS IN '90

The U.S. Department of Agriculture is likely to use the full $566 million appropriation granted by Congress in fiscal 1990 for the export bonus program, according to a memo sent by the agency to a congressional office and obtained by Knight-Ridder Financial News.

According to the memo titled "Status of FY 1990 EEP Programming," dated April 27, "It is likely that the total $566 million program level currently authorized will be fully used by the end of FY 1990." The fiscal year ends Sept. 30.The memo was sent by USDA's Foreign Agricultural Service, which administers the five-year-old Export Enhancement Program that is designed to make U.S. commodities, especially wheat, more competitive in foreign markets where EC nations are selling subsidized farm products.

In fiscal 1989, Congress appropriated $770 million for the export bonus program, but USDA spent only $338 million of it to subsidize sales of commodities abroad. That in part was due to reduced world supplies last year, which created more of a sellers' market for wheat, thus reducing the need for government subsidies.

However, larger U.S. and world wheat crops in 1990 may put pressure on USDA to more aggressively use the export bonus program to sell U.S. commodities abroad. In 1987 and 1988, when grain supplies were higher than last year, USDA spent $900 million to nearly $1 billion subsidizing wheat and other agricultural commodities.

The April 27 USDA memo said that as of April 26, there had been $183 million worth of export bonus awards made for the fiscal year. Further, it said, the estimated value of initiatives that already were approved by USDA and "expected to be utilized by the end of FY 1990 is about $210 million.

''Total EEP bonuses awarded to date plus those for initiatives outstanding and under active consideration are estimated between $475 million and $525 million for FY 1990," the memo stated.

It added that additional offers will be required by the end of the fiscal year "for countries which are expected to deplete outstanding announced initiatives prior to the end of the fiscal year."

The memo concluded that it was likely that the total $566 million appropriated by Congress "will be fully used by the end of FY 1990."