By STAN MADDUX

Indiana Correspondent

WASHINGTON, D.C. — Manufacturers of farm equipment and other machinery could find it easier to compete overseas from Congress restoring the Export-Import Bank of the United States (EXIM).

Alexander Russ, director of government relations for the Milwaukee-based Assoc. of Equipment Manufacturers, stressed the impact will be positive not just for large companies assembling and selling machinery to other countries – small to medium-sized companies making the parts used in the assembly of those machines will also benefit.

“You’re supporting their entire supply chain,” Russ said.

The victory is hailed by an industry citing tens of thousands of unrealized jobs and billions of dollars in output lost since July 2015 when Congress allowed EXIM’s charter to expire. Ever since, loans extended by EXIM were capped at $10 million per customer due to an 85 percent cut in federal funding.

Russ said the negative impact on manufacturing was noticeable from demand in developing nations, combined with the high cost of new equipment, often exceeding the cap.

Without private lending institutions – reluctant to engage in such financing – to turn to, he said U.S. companies unable to fill orders lost customers to countries like China that have export-import banks of their own without such limits on financing.

Restoration came May 8 when the Senate filled three open seats on the five-member board of EXIM. The move allowed the U.S government-backed lending institution to have a quorum at meetings again to conduct business.

The bank, established in 1934, extends U.S. manufacturers financing to cover the cost of getting orders to foreign customers without access to credit on their purchases. Russ said those customers are often from emerging economies in countries without strong enough banking and financial systems to offer such financing.

“For ag equipment makers, many of these markets are some of the fastest-growing, so there’s big economic opportunity for folks in manufacturing and the heartland to export,” he explained.

Jay Timmons, president and CEO of the Washington, D.C.-based National Assoc. of Manufacturers, said restoring the bank allows American manufacturers to become more aggressive in competing against countries like China. He noted that Congress must reauthorize the EXIM charter by September.

“This is a serious threat looming on the horizon. If Congress fails to reauthorize the EXIM bank, lawmakers will be responsible for slowing manufacturing’s growth and handing countries like China a competitive edge,” he said.

Critics say the bank takes part in “crony capitalism” or a form of socialism by helping large companies like Boeing, Caterpillar, and General Electric that shouldn’t need help from government-backed loans to do business overseas. Critics also say many foreign customers were equal in size and access to capital.

According to Purdue University agricultural economist Phil Abbott, the bank does not carry as much significance for agriculture as it does for other industries. The EXIM can be a tool for John Deere and other makers of farm machinery, but other options for getting some of their product to foreign markets are often exercised.

Those options include farm machinery and parts makers operating plants in countries of foreign customers to save on shipping, he explained.

However, Russ said nearly 85 percent of EXIM’s financing has supported small businesses. He also said the loans often make or break a small business and the role of the EXIM is to help capitalism.

“It is literally a tool to help U.S. manufacturers export more of their products, which we would only lose out on if the bank did not exist,” he said.

According to EXIM, the bank in 2014 authorized $20 billion in transactions supporting $27.5 billion of U.S. exports and 164,000 jobs. The bank also returned more than $600 million to the U.S Treasury for deficit reduction that year.

The medium-term financing has been used extensively by U.S manufacturers and suppliers of new and used agricultural equipment from as small as disc harrows to much larger seeders and combines. The sale of farm commodities and consumables like grain and soil additives are supported through its short-term insurance program, the bank stated.

Assistance is provided with exporting livestock, according to the bank. Help is also extended to projects ranging from the export of greenhouses to individual growers, to development of large-scale integrated meat processing facilities.

“Regardless of the size and scope of an exporter’s involvement in foreign agricultural activities, EXIM bank has a financing program that will meet their needs,” bank officials said.