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Tuesday, February 21, 2006
ANATOMY OF A DEAL THAT’S WORTH MILLIONS OF DOLLARS TO NEBRASKA

When I was in Baghdad spending Thanksgiving with Nebraska troops, I took a side trip to meet with James Smith, Agricultural Attaché with the U.S. Embassy, to deliver a message to the Iraqi Ministry of Trade.

That message stressed Nebraska’s willingness and desire to renew a trading relationship with Iraq on dry edible beans. It was 2004 when I delivered that message to the Iraqi government.

That personal meeting was part of a full court press that lasted nearly 3 years and included letters and conversations with the White House and the USDA to persuade them to re-establish what once was Nebraska’s largest customer for dry edible beans.

We weren’t about to take “no” for an answer and on Valentine’s Day 2006 the hard work and pestering paid off when 4 Nebraska companies were able to negotiate a deal to sell Iraq 10,000 metric tons of dry edible beans.

This will have a huge economic impact on most everyone in the state. What’s good for agriculture, our Number One industry, is good for Nebraska. The sale of 10,000 metric tons of beans to Iraq could mean up to $5 million flowing into the state, money that will trickle through our entire economy.

Iraq historically had been an importer of as much as 25 percent of Nebraska’s bean production. The first Gulf War put an end to that when the U.S. embargoed trade with Iraq.

After we ousted Saddam Hussein the trade sanctions were lifted on May 27, 2003 but re-establishing our bean trade wasn’t just said and done with the lifting of sanctions. No, that was going to take some work.

In 2003 we were able to ship 34,000 metric tons of beans to Iraq through the U.S. Food Aid program. While it pushed the price of beans up temporarily it was a one-time sale, not a resumption of trade. The resumption of trade ran into interference from Iraq’s new government which created a complicated system of bean packaging and payment requirements which put American bean producers at a disadvantage.

Iraq’s cumbersome trade barriers included such unreasonable provisions as requiring our producers to ship the beans inland rather than to sea ports, put up performance bonds that interfered with ease of payment, and a requirement that beans be sent in 100 gram packaging when a packaging facility in-country would be more workable.

It was a complete bureaucratic haze that was clearly designed to put up barriers. As you might imagine, it wasn’t easy to work through but I was committed to do it. It was troubling to me that Americans, especially Nebraskans, were being shut out of the Iraqi bean market because, after all, it was the American people who sacrificed much in the liberation and re-building of Iraq.

Even working with my colleague, Congressman Tom Osborne, It was a difficult task and took a lot of time to accomplish but it was well worth it with the Valentine’s Day announcement. We now have an exciting opportunity for Nebraska farmers to regain their dominance in this market as the Iraqi people re-discover what we have known for a long time. Nebraska grows the best beans in the world, period.

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