State looks to expand on export opportunities

Nebraska products, agricultural and otherwise, are reaching customers all over the world, and Nebraska representative to the U.S. Congress Adrian Smith thinks the state can export even more if regulations and tariffs are changed.

State exports totaled $7.5 billion in 2012, Smith claimed during his visit to Sidney on Thursday.

"I tell you what, great things are happening with trade," Smith said. "With U.S. products, more specifically Nebraska products heading overseas."

Smith thinks the answer to growing the market for Nebraska products in other countries is to sign trade agreements with more nations and to reduce tariffs on both sides. Tariffs are taxes on imports and exports.

"We know we produce more food in Nebraska than Nebraskans can consume," Smith said. "We know we produce more food in America than Americans consume."

Smith pointed out that 95 percent of the consumers around the world live outside the U.S. The purchasing power in America is higher because of the standard of living, but 80 percent of the purchasing power is still outside our borders.

"We hear a lot about trade agreements," Smith said. "They're often called free trade agreements. They're not always free, if you know what I'm saying."

According to Smith, in recent years U.S. products going overseas butted up against an average 60 percent tariff, while products coming into the U.S. faced around a 12 percent tariff. He wants to bring both of these numbers down. Smith claimed that 87 percent of the world's gross domestic product is in countries that the U.S. doesn't have trade agreements with. But in recent years, the government passed trade agreements with South Korea, Columbia and Panama.

"Nebraska agriculture saw direct benefits from that," Smith said.

It's important to make agreements of this kind with even more countries, he said.

"Right after it took effect, one of the popcorn operations in Nebraska received an order for popcorn that would reach about 9 million people," Smith said.

Emerging economies such as Brazil, China and India will be important in the future as well, Smith added.

Smith also stressed the importance of paying attention to issues with customs and border patrol so products being exported aren't bogged down by either of these processes.

Sub: Passing the bill

One of Smith's major concerns in congress right now is the farm bill.

"We need to pass a five year farm bill, in my opinion," Smith said. "I think that the marketplace is volatile enough without the moving target of federal policy."

He thinks it is possible to pass the bill, although he admits it will be tied together with the nutrition title.

"In a perfect world they would be separate," Smith said. "I just don't see the votes for that."

He does see the need to reform the nutrition portion of the bill, since it is tied to the rest of the legislation. Food stamps will end up costing $1 trillion in ten years if nothing is changed, Smith claimed.

The most important part of the farm bill to Nebraskans is crop insurance. This is a safety net that farmers in this state need, he agreed.

On Smith's trip to Sidney yesterday, he brought along resources who could help small Nebraska businesses with exportation.

Stan Garbitz of the Nebraska Department of Agriculture works with those in the Foreign Agricultural Service and the United States Department of Agriculture located in embassies all over the world with who assist those in this country with exports.

"I'll tell you, our tax dollars are at good work for the money that goes into those people," Garbitz said.

The federal government provides a plethora of programs to help exports, but he hopes that the farm bill passes, which will add even more assistance.

"They have a lot of assistance money for those small to medium sized companies," Garbitz said. "This is money that can directly be used to help you export your product."

Garbitz is committed to helping business of all sizes in Nebraska ship their products overseas.

"It's just so important to us at the end of the day to make sure we've helped someone local sell something," Garbitz said.

Susan Rouch of the Nebraska Department of Economic Development knows how important farming is to the state.

"We're an Ag based economy, we always will be," Rouch said. "We export everything from farm equipment to finger printing kits, but our largest exports still are Ag commodities and livestock and food products."

Nebraska also exports machinery, irrigation equipment and transportation equipment, Rouch added.

Sub: New markets emerging

Japan used to be the number one importer of goods from the state. Now that nation has been overtaken by Canada, Mexico and China.

"China is actually our fastest growing export market now," Rouch said.

NDED opened an office in Japan in 2006 and recently opened another in China to facilitate introducing Nebraska business owners to buyers.

"Again, a lot of what we do is trying to develop contacts for small businesses," Rowe said. "That is something we do in a variety of ways."

Her organization also helps with any issues concerning customs in other countries.

"The last thing you want is your shipment sitting over there and not being able to have any control over it," Rouch said.

Rouch assured the Sidney crowd that those wishing to export goods have places to go for help.

"The types of contacts and the resources we have in Nebraska are vast," Rouch explained.

Ingrid Battershell of Nebraska Business Development Center believes that her organization is the place to start when considering whether or not to export. NBDC can help businesses in Nebraska develop an exporting business plan, identify target markets, analyze competition and help find the best methods to export products.

"We kind of hold your hand," Battershell said.

Battershell touted the benefits of exportation for all those involved. On average, businesses that export can pay higher wages than those who don't. They also generally provide better benefits and are less likely to go out of business, according to the NBDC.

Although Smith thinks that tariffs needs to go down, he knows those selling products overseas face other issues.

"Non-tariff trade barriers are big obstacles," Smith said.

Sometimes its difficult for farmers to export to the European Union because there are restrictions on genetically modified products.

"And my friends, without GMOs we would have huge starvation around the world," Smith said.

GMOs have been scientifically proven to be safe, according Smith. Many in Europe, however, still balk at the idea.

"We just need to make sure that regulation, via trade agreement or standard operating procedures need to stick to the same scientific regulations and standards," Smith said.

Smith believes that many things need to change when it comes to international trade, but is still optimistic about the future of Nebraska exports.

"I think it's exciting to see what the future does hold," Smith said. "When you look at the potential that's out there, we can really grow opportunity in America. We know that our producers are so efficient."

Nebraskans mostly just want to be left alone to pursue their own business, Smith said.

"I think it boils down to the desire of the American people to find a better way of doing things," Smith said. "We always look for a brighter future. That's capitalism, that's competition. We cannot and should not shy away from that."

Farmers and ranchers in the audience generally agreed.

"I'm always interested in what Adrian has to say," said R. LaDene Rutt, a grain farmer in Deuel County. "He seems to have two feet on the ground."

The exportation of Nebraska goods helps everyone in the state, she added.

Scott McMurray, director of sales at George Risk Industries, which produces security alarm equipment and is based in Kimball, agreed with Smith that regulations in Europe are a hindrance to doing business. Exports are a small but important part of his business, he said. Regulations in the Middle East and Europe can sometimes be troublesome, he added.

"It makes it more difficult," McMurray said. "We manage to squeeze through, but it increases cost."