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Arkansas is an important producer and exporter of agricultural products. In
2008, the State's cash farm receipts totaled $8.3 billion. Arkansas ranked 11th
among all 50 states in 2008 with agricultural exports estimated at $3.2 billion.
Agricultural exports help boost farm prices and income, while supporting about
37,065 jobs both on the farm and off the farm in food processing, storage, and
transportation. Exports remain important to Arkansas' agricultural and statewide
economy. Measured as exports divided by farm cash receipts, the State's reliance
on agricultural exports was 38 percent in 2008.
Arkansas' top five agricultural exports in 2008 were:
rice -- $918 million
soybeans and products -- $807 million
poultry and products -- $509 million
cotton -- $473 million
wheat and products -- $276 million
World demand for these products is increasing, but so is competition among
suppliers. If Arkansas'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 Arkansas Agriculture
Rice, Arkansas’ number one export will benefit tremendously from recently
negotiated trade agreements. Under the U.S.-Chile FTA, Chile’s import tariff on
U.S. rice falls from 6 percent to zero over 12 years. Rice will be subject to
price-based safeguards until tariffs are eliminated. If Congress ratifies the US
– Dominican and Central American FTA in its current form, U.S. rice exporters
gain preferential access through duty free in-quota access as out-of-quota
tariffs are eliminated during 18 to 20-year transition periods. During this
transition period, volume-based safeguards are available to the Central American
countries. Quotas and their growth rates vary depending on the country and type
Arkansas has benefited from the opening of the Japanese rice market under the
Uruguay Round. Japan opened its market to 375,000 tons of imported rice in 1995;
by 2000, the tariff-rate quota had expanded to 682,200 tons. As a result, Japan
has emerged as one of the largest export markets for U.S. rice.
As one of the leading states in poultry production, Arkansas 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.
Export Success Stories
As a major soybean producer, Arkansas has benefited from the efforts of the
American Soybean Association (ASA), in partnership with USDA, and various
producer organizations to increase demand for U.S. soybeans and meal in a number
of key markets in Asia. For example, in China, ASA's technical assistance has
increased demand for soy-based aquaculture feed. The Chinese aquaculture
industry currently uses 3 million metric tons of soybeans, valued at $616
million, compared to zero a decade ago.
The Arkansas rice industry has benefited from efforts of USA Rice trade
association’s efforts to expand the Japanese rice shop network selling U.S. rice
year-round from 44 members in the Tokyo area to 105 members across Japan. U.S.
rice is now penetrating Japanese supermarkets. USA Rice's sponsored delegation
of Hong Kong importers/wholesalers last year has already resulted in trial
purchases of U.S. rice, and more sales are expected.