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Indiana’s European Agricultural Connection

September 13, 2011

The European Union Center has partnered with the Indiana Business Research Center (IBRC) to produce scholarly work explaining Indiana’s business relationship with Europe, thanks to a grant awarded by the European Commission. “Products not Commodities: The Indiana-European Trade Connection,” in the September-October edition of InContext, is the latest article outlining these economic connections. InContext is the IRBC’s bi-monthly magazine. Tanya J. Hall’s article details increasing Indiana exports destined for the EU. She addresses the changing content of Indiana’s agricultural exports from commodities to products and compares American agricultural trends with those of Europe.

Farming continues to create many opportunities for the Hoosier State, despite the global population shift from rural to urban areas. The European Union is an ideal destination for many of the goods Indiana farmers are producing. The reform of the EU’s Common Agricultural Policy in 1999 and 2003 led to a decoupling of production and subsidy values for European farmers. It is not surprising that Indiana’s agricultural goods exports to the EU increased from less than $50 million to nearly $120 million from 2004 to 2008. These exports consist primarily of consumer-oriented products and forest products.

Indiana’s agricultural goods exports to Germany alone hovered between $3 to 5 million per year during 1997 to 2006 before rising to $14.3 million in 2007. In 2010, Indiana’s yearly agricultural goods exports to the land of beer and wursts increased to $49 million. While the economic slowdown affected Indiana, Indiana’s agricultural exports to the EU rose to $166.8 million in 2010, a six percent growth from 2009.

Eight of Indiana’s top 20 destinations for exports are members of the European Union and the EU is Indiana’s second largest international agricultural market. Compare this to the United States as a whole, where Europe ranks as the fifth-largest agricultural export destination. A break-down of Indiana’s agricultural production shows us that its top five agricultural commodities are corn, soybeans, hogs, dairy products and chicken eggs – totaling $8.7 billion in exports. In regards to agricultural products, Indiana ranks 8th in the nation with an export value of $3.4 billion, mostly in live animals, meat, and poultry. Indiana’s potential for agricultural growth should remain oriented towards the EU, as it is now the world’s largest food importer.

To learn more about Indiana’s agricultural connection with Europe, visit brochures or presentations webpages at the EU Center.

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