Horticultural exporters, do
not overlook the billions of dollars available to help
facilitate sales to buyers in countries where credit is
necessary to maintain or increase U.S. sales but where
financing may not be available without credit guarantees.
Invest the time to learn more about the Export Credit
Guarantee Program (GSM-102) and Supplier Credit Guarantee
Program (SCGP) to increase your sales and lower your
risks. GSM-102 and SCGP ensure that American farm and
food products continue to move to markets around the
world. USDA does not provide financing, but it guarantees
payments due to U.S. exporters in case the foreign banks
or importers default.
Since the last publication,
the U.S. Department of Agriculture (USDA) has authorized
credit guarantees for sales of U.S. agricultural
commodities to Lebanon, South America Region, Peru, West
Africa Region, Caribbean Region, Southern Africa Region,
Baltic Region, Poland, Kazakstan, Morocco, Southeast
Europe Region, Central Europe Region, and China and
Special Administrative Region of Hong Kong under GSM-102.
Also credit guarantees have been authorized for sales of
U.S. agricultural products under the SCGP to Russia,
Bulgaria, Caribbean Region, West Africa Region, Baltic
Region, Japan, Poland, Kazakstan, Yemen, Israel, Taiwan,
South America Region, Southeast Europe Region, and
Central Europe Region. You may access specific GSM-102
and SCGP information regarding allocations, definition of
regions, terms of coverage, eligible banks, guarantee fee
rates, and other special terms and conditions on the
Internet at:
The following tablespresent
the FY 2001 GSM-102 and SCCP for which USDA has
authorized credit guarantees for sales of U.S.
horticultural products. For most countries and regions,
exporters may apply for credit guarantees on a
first-come-first-served basis to cover sales of any of
the eligible commodities published in FAS program
announcement PR 0240-00, issued June 12, 2000 or as
superseded. The following horticultural products are
eligible under the export credit guarantee programs:
dried fruit; fresh fruit; frozen fruit; canned fruit;
100-percent fruit juices; fruit and vegetable
concentrates, pastes, pulps and purees; honey; hops or
hops extract; beer; tree nuts; fresh vegetables; canned
vegetables; dried vegetables; wine; and brandy. The
General Sales Manager will consider requests to establish
an SCGP and/or GSM Program for a country or region or
amend an authorized program to include horticultural
commodities and products which are currently not
eligible.
GSM-102
The GSM-102 program makes
available credit guarantees for sales of U.S.
agricultural commodities overseas. USDA does not provide
financing, but guarantees payments due from foreign
banks. USDA typically guarantees 98 percent of the
principal and a portion of the interest. The GSM-102
program covers credit terms from 90 days to 3 years.
Under the program, once a
firm sale exists, the qualified U.S. exporter applies for
a payment guarantee before the date of export. The U.S.
exporter pays a fee calculated on the dollar amount
guaranteed, based on a schedule of rates applicable to
different lengths of credit periods. The Commodity Credit
Corporation (CCC)-approved foreign bank issues a
dollar-denominated, irrevocable letter of credit in favor
of the U.S. exporter, ordinarily advised or confirmed by
the financial institution in the United States agreeing
to extend credit to the foreign bank. The U.S. exporter
may negotiate an arrangement to be paid as exports occur
by assigning the U.S. financial institution the right to
proceeds that may become payable under the guarantee, and
later presenting required documents to that financial
institution. Such documents normally include a copy of
the export report. If a foreign bank fails to make any
payment as agreed, the exporter or the assignee may file
a claim with USDA for the amounts due and covered by the
guarantee. USDA will pay the U.S. bank and will take on
the responsibility of collecting the overdue amount from
the foreign bank.
The GSM-102 table presents
the FY 2001 GSM-102 for which USDA has allocated credit
guarantees for sales of U.S. horticultural products as of
October 27, 2000. Additional information about the
GSM-102 program, regulations, country specific press
releases and program announcements, and a Monthly Summary
of Export Credit Guarantee Program Activity may be
accessed on the Internet at:
The SCGP is unique because
it covers short-term financing extended directly by U.S.
exporters to foreign buyers and requires that the
importers sign a promissory note in case of default on
the CCC-backed payment guarantee. The SCGP emphasizes
high-value and value-added products, but may include
commodities or products that also have been programmed
under the GSM-102 program.
The Supplier Credit
Guarantee table presents the FY 2001 Supplier Credit
Guarantee Program for which USDA has allocated credit
guarantees for sales of U.S. horticultural products as of
October 27, 2000. Additional information about the SCGP,
regulations, country specific press releases and program
announcements, and a Monthly Summary of Export Credit
Guarantee Program Activity may be accessed on the
Internet at:
The SCGP encourages exports
to buyers in countries where credit is necessary to
maintain or increase U.S. sales but where financing may
not be available without CCC guarantees. Under the SCGP,
CCC guarantees a portion of payments due from importers
under short-term financing (up to 180 days) that
exporters have extended directly to the importers for the
purchase of U.S. agricultural commodities and products.
These direct credits must be secured by promissory notes
signed by the importers. CCC does not provide financing
but guarantees payment due from the importer.
Program announcements,
available on the Internet, provide information on
specific country and commodity allocations, length of
credit periods, the required form of promissory note, and
other program information and requirements.
(For further
information on the SCGP or GSM-102 Program for
horticultural commodities, contact Yvette Wedderburn
Bomersheim on 202-720-0911).
