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Alabama is an important producer and exporter of agricultural products. In
2008, the State's cash farm receipts totaled $4.5 billion. As for exports, the
State's agricultural sales overseas were estimated at $1 billion in 2008.
Agricultural exports help boost farm prices and income, while supporting about
11,583 jobs both on and off the farm in food processing, storage, and
transportation. Exports remain important to Alabama's agricultural and statewide
economy. Measured as exports divided by farm cash receipts, the State's reliance
on agricultural exports was 22 percent in 2008.
Alabama's top agricultural exports in 2008 were:
poultry and products -- $429 million
cotton -- $172 million
wheat and products -- $94 million
soybeans and products -- $80 million
World demand for these products is increasing, but so is competition among
suppliers. If Alabama's farmers, ranchers, and food processors are to compete
successfully for the export opportunities of the 21st century, they need fair
trade and more open access to growing global markets.
How Trade Agreements Benefit Alabama Agriculture
As one of the leading states in poultry production, Alabama benefited under
the Uruguay Round agreement when Korea eliminated its import quotas on frozen
chicken in 1997, and reduced its tariffs to between 18 to 20 percent by 2004.
These steps supported a rise in U.S. poultry to 120,000 tons valued at $79
million by 2002. The Philippines opened a tariff-rate quota for poultry meat of
16,701 tons in 1998, which rose to 23,500 tons by 2004.
Under the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR)
all applied import tariffs on U.S. poultry meats that currently range between 30
and 164 percent will be eliminated over 10 to 18 years depending on the product
and country. Each country also commits to adopting a "systems approach" to the
recognition of the U.S. poultry inspection system, thereby eliminating
plant-by-plant inspections and facilitating trade. From 2001 through 2003, U.S.
poultry meat suppliers annually shipped on average 65,550 metric tons valued at
$61 million to all six countries combined.
Alabama benefits under NAFTA with new rules of origin that increase demand
for U.S. textiles in Canada and Mexico. Mexico’s 10-percent tariff on cotton has
been eliminated. This tariff reduction supports U.S. cotton exports to Mexico,
which rose from 558,000 bales to 2.2 million bales from marketing year 1995 to
2002. U.S. industry estimates that the Caribbean Basin Initiative and Africa
Growth and Opportunity Act will increase annual cotton sales by 100,000 bales.
Export Success Stories
Since launch in 2000, Cotton Council International (CCI) and Cotton
Incorporated’s COTTON USA Sourcing Program, funded by FMD and checkoff
resources, has dramatically enhanced the level of U.S-made cotton textile
exports to the Caribbean Basin. Cotton yarn exports to the region increased from
$30 million in 1999 to $205 million in 2003. Meanwhile, knit fabric exports
skyrocketed from $21 million to $618 million. CCI and Cotton Incorporated
achieved these results by partnering the two organizations and their respective
marketing and technical strengths, and by market development outreach to the
supply chain and retail industries in the United States and supplying countries.
The resulting business contacts have now become established trading
relationships that compete favorably with products from anywhere in the world.
Using Market Access Program funds, the American Peanut Council promotes the
value of U.S. peanuts over lower price peanuts from other origins by
demonstrating the higher quality, superior flavor and longer shelf life of U.S.
peanuts. Canada annually purchases over $50 million worth of U.S. peanuts. In
2003, Canada purchased almost 3,500 metric tons of in-shell peanuts from the
U.S. valued at approximately $3 million.