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California program helps farmers break into export market

By John SpitlerSpecial to The Christian Science Monitor / September 11, 1986



Bakersfield, Calif.

The California Legislature is out to help Roy Sharp peddle pigs in Ecuador. It is also helping George Lindemann sell honeydew melons in Hong Kong and Basil Holobetz market strawberries in Kuwait.

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This generosity is driven by economic necessity. In recent years California officials and others have seen one of their state's economic plums, farm exports, shrivel from a plump $4.2 billion in 1981 to $2.4 billion in 1985.

In an effort to reinvigorate agricultural export sales, the Legislature in January initiated the nation's first state-administered, state-financed export promotion plan. The California Agricultural Export Program (CAEP) is patterned after the United States Department of Agriculture's well-established Foreign Agricultural Service (FAS).

The federal program, which provides export development and promotion funds to major commodity organizations, ``is one of the success stories of government foreign trade,'' says James Iso, former agricultural attach'e at the American Embassy in Singapore.

FAS, he notes, was instrumental in creating Japan's current need for feed grains and soybeans. In 1968 that country's demand for US feed grains was about 4 billion tons; its soybean demand was 2 billion tons annually.

Today the Japanese consume about 4.5 billion tons of US soybeans and use 16 billion tons of feed grain from this country for their livestock. Mr. Iso says there are many similar FAS successes.

The California effort grants matching funds for product promotion to qualified individuals, firms, and commodity groups that are involved, or wish to become involved, in out-of-country farm sales.

From about 50 applications, 37 were selected by the nine-member export advisory board to share the $2.1 million first-year allocation. An annual appropriation of $5 million will be made each successive year through 1990.

``California, in contrast with other states, has a larger number of specialty crops -- perhaps 250,'' points out program director George Urda. ``These are more consumer-oriented than those of most other states, and they require promotion. Also, California's crops have been zeroed in on by countries that subsidize their farmers,'' he adds.

Mr. Urda says there are basically three types of participants: those whose markets are steady or growing, those seeking to stop a market decline, and those just getting into the export business.

Regardless of the reason for taking part, ``the basic concept here is that industry does the job best,'' says Urda, himself a veteran of more than 20 years in international trade. ``Since they are experts and have their own best interests at heart, . . . we can help best by augmenting the commitment they themselves want to make.''

Basil Holobetz of the Paramount Export Company in Oakland, Calif., and others in his trading shoes, would probably agree. Paramount seeks to expand on past marketing successes in the Middle East.

Mr. Holobetz says CAEP funds his firm is applying, especially money it would use in 1987, will make possible substantial market expansion in that part of the world. Paramount is promoting California strawberries in Kuwait with much of this year's $9,210 grant.

``We'll promote on a much bigger scale next year,'' he says. ``There will be more countries, more products.''

Oranges are a major export crop for California, and a sharp drop in that trade provided major incentive for passage of the state export program.

One-third of all California oranges are exported, and one-third of that total goes to Canada. ``The California market share in Canada has fallen from virtually 100 percent to less than 80 percent in the last 5 to 10 years,'' says William Quarles, vice-president for governmental affairs for Sunkist Growers.

Sunkist got a $261,315 matching-fund grant from CAEP this year to help reverse this decline, Mr. Quarles says. The drop in California orange sales abroad was caused, he explains, by an influx of fruit from citrus-growing nations which, like the United States, can no longer compete in the world of high European Economic Community tariffs.

Tariffs aren't a concern to Lindemann Farms, which grows and packs honeydew melons near the small, west-central San Joaquin Valley town of Los Banos. But getting started in the export business is, says the firm's chief financial officer, Rhett Salha.

Lindemann's $20,000 grant will be used on promotional and nutritional information materials and for food-show booths in Hong Kong, Singapore, and Tokyo.

In the nearby community of Gustine, dairyman Wilbur Gomes faces a different kind of export challenge. Because the retirement-minded Mr. Gomes has been accepted in the federal government's dairy buy-out scheme, he must find new owners for his registered Holstein herd or sell them for slaughter. His $10,932 grant from CAEP will assist in finding them a home outside the US.

Meanwhile, in Tulare, Calif., Roy Sharp says that without his $10,000 CAEP grant, his prospects for success as an exporter of hogs and of his swine-management expertise would be tenuous. He hopes to sell both in Ecuador and Taiwan.

Eighty grower-members of the California Independent Almond Growers of Ballico have severed processing and marketing relations with the world's largest almond cooperative, California Almond Growers Exchange. Using their $85,835 CAEP grant, they hope to establish markets throughout Europe, says the group's manager, Jim Barstow.

Desmond Jolly, a University of California agricultural economist, says he thinks the California Agricultural Export Program will help alert the agricultural community to the payoff possible through exporting. It will also help build the stock of knowledge necessary to export successfully, he says.

As to the influence the program will have on the state's export balance sheet, Dr. Joly says, ``The impact will probably be seen in the longer run.''