International trade boosting Virginia’s agriculture

During my 27 month tenure as VDACS Commissioner, I have considered myself the Commonwealth’s Chief Agricultural Marketing and Development Officer.

In that capacity, I have worked with Virginia growers and agribusinesses to help them move more of their products into marketplaces all around the world. A good portion of my work on behalf of Virginia agriculture has been focused on increasing agriculture exports from the state.

For example, last month I went with a group of farmers, agribusiness leaders and exporters to Havana, Cuba. We attended the Havana International Trade Fair and met with some heartening success despite the current economic recession that is impacting this island nation. Standing there in the trade hall, after a contract had been signed for Virginia apples, I was reminded again that participation in such events is a key part of Virginia’s continued efforts to expand international sales for a diverse offering of agricultural products.

On the whole, we had a good mission despite the economic impacts on Cuba and three major hurricanes last year. Cuba remains a good market for certain agricultural exports from Virginia, including apples and soybeans. During business meetings at the trade show, I learned that the challenging economic climate, coupled with trade barriers faced by U.S. exporters, will mean 35 to 37 percent fewer goods purchased this year from the United States. Despite this downward trend we expect Virginia’s agricultural exports to Cuba to be up by about 10 percent in 2009. That’s the first amazing fact about Virginia’s exports to Cuba: Despite a national reduction of 35 to 37 percent, our exports to Cuba should be up.

The continued growth of agricultural exports to Cuba and many other foreign markets is a testament to several factors. Pre-eminent, I believe, is Virginia’s diversified portfolio of agricultural products. We also have growers, producers and agribusinesses that produce and ship very high-quality products, a fact that has not gone unnoticed in the international community. We have an outstanding port system that quickly moves products into the marketplace. Finally, I believe VDACS’ aggressive international marketing strategy is paying off for us in these tough economic times just as it will as the economy improves.

Our market development strategy at VDACS has been to maintain market share in well-established markets, such as Canada and Japan, while also looking for opportunities for our farm products in emerging markets. Based on this philosophy, VDACS aggressively began promoting Virginia’s agricultural products to Cuba early this decade. Virginia currently ranks in the top five U.S. states exporting to Cuba. Virginia’s agricultural exports to Cuba have increased dramatically, from $838,000 in 2003 (the first year in which agricultural exports from the Commonwealth to Cuba occurred since the 1962 trade embargo) to more than $40 million in 2008. So far in 2009, Virginia’s exports to this market already have surpassed $45 million. That $45 million plus export total is amazing fact No. 2.

Moving from Cuba into the year ahead worldwide, I see challenges but I also see great opportunities. From January through September 2009, Virginia’s agricultural exports were at $1.48 billion. We are about two percent below last year's record export value so far this year, but it is important to note that Virginia is fairing better that most other states in terms of exports. So far, it appears that the combined agricultural exports of other states are down about 20 percent this year. Amazing fact number three: while other states’ exports are down about 20 percent, we expect ours to be up by about two percent.

Let me be frank; we have some challenges facing us in 2010 and an aggressive marketing strategy is not the only answer. In the Cuban market, for example, we desperately need trade and travel reforms that reduce the transaction costs of exporting to this market and help offset the negative impacts of the global recession. We are shutting ourselves out of this important market by not addressing the antiquated trade barriers that have been in place for nearly half a century. In other important markets, trade barriers have been erected based on misguided health or food safety pretenses. Our pork exports to China, for instance, have suffered recently because of the unfortunate and incorrect assertion that H1N1 is linked to swine. Boosting Virginia’s agricultural exports sometimes means pressing our trade negotiators and other policy makers to champion fair and free market access for our farm products in all foreign markets.

Agriculture is Virginia’s No. 1 industry, with an annual economic impact of $55 billion. The industry also provides more than 350,000 jobs across the Commonwealth. Success in the international marketplace, including Cuba, helps maintain agriculture as Virginia’s leading industry. In 2008, Virginia exported $2.22 billion worth of agricultural products, an all-time record for the Commonwealth. We will be close to hitting that mark again this year, which is excellent considering the worldwide economic recession.

Once again, diversity is our friend. We export to North, South and Central America; the Caribbean; Europe; Africa and Asia. Our top 20 agricultural export markets include Canada, China, Switzerland, Venezuela, Egypt, Germany, the Netherlands, Morocco, Indonesia, Malaysia, Cuba, Russia, Mexico, Portugal, Vietnam, Japan, Saudi Arabia, Hong Kong, Jamaica and Turkey. Part of Virginia’s success with regards to international market development has been leveraging federal funds, such as funds available through the U.S. Department of Agriculture’ Market Access Program (MAP) to maximize the Commonwealth’s exposure in various foreign markets. In the next few months VDACS will be managing projects as far ranging as organizing a seafood promotion in Europe, promoting Virginia wine in the United Kingdom, promoting livestock exports to the Middle East and hosting a delegation of agricultural buyers from Japan.

Agricultural exports contribute to farm profitability and support jobs in agriculture and many related industries. Virginia’s high-quality products are in demand around the world and the Commonwealth enjoys the advantage of a strategic Mid-Atlantic location and world-class port facilities. That serves our farmers, our businesses and our citizens well, even in tough economic times, and I pledge to you that we will do everything we can at VDACS to keep our export markets strong and healthy.

On behalf of the Virginia Department of Agriculture and Consumer Services, I want to take this opportunity to wish the citizens of the Commonwealth a very safe and happy holiday season. May the New Year bring you much prosperity and good fortune.

TAGS: Outlook
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