The Michigan Department of Agriculture and Rural Development is helping agricultural businesses become more knowledgeable about their trading partners.
In June, MDARD entered into a contract with the Van Andel Global Trade Center at Grand Valley State University to financially assist farmers and agricultural businesses in getting up to two worldwide credit reports per company that gives in-depth information on their potential international export partners.
“We often hear from companies that one of their biggest hurdles in exporting is vetting the foreign buyers,” said Jamie Zmitko-Somers, MDARD international marketing program manager. “Michigan companies want to make sure they are working with a reputable company when they are making an export sale. This service can provide them a peace of mind by having a report that looks at the company.”
The report can take anywhere between two to 11 business days, depending on where in the world their export partners are. The cost is about $400, according to Sonja Johnson, the executive director of the Van Andel Global Trade Center.
Johnson said the worldwide credit report is similar to that of the Dun & Bradstreet report. The worldwide credit report provides background information on international businesses.
The report includes information such as the number of employees the company has, payment history, principal bankers, yearly sales turnover, net profit, legal status and history, shareholders, number of facilities, types of goods imported and distributed, branch offices and trade risk assessments.
“We work with credit reporting groups that have in-country representations so that they can verify that the financial information is true and accurate,” Johnson said. “So, when a Michigan company is looking to sell to that country, they are making an informed business decision. All the reports that we acquire … are recognized by the Export-Import Bank of the United States. So, they are very well vetted.”
Michigan produces over 300 commodities. According to Zmitko-Somers, Michigan’s top export markets last year were Canada, Japan, Mexico, China and Thailand. She also said some of the state’s top exports include processed food products such as dried fruits, snack food products, cereal, dairy products and soybeans.
According to the Michigan Farm Bureau, Michigan exports about one-third of its agricultural commodities each year. Almost 40 percent of Michigan’s agricultural exports go to Canada, its No. 1 export market.
Prior to the agreement reached between MDARD and VAGTC, agricultural businesses had to pay for the report on their own.
Since the agreement is nearly two months old, many agricultural businesses are not yet aware of the new service, Johnson said.
“We are having a hard time getting through to the actual farmers and producers of agricultural items and getting the word out to our multipliers, our statewide economic agencies, that it is available through MDARD, who offer this,” Johnson said. “I am sure farmers are busy out in the fields getting planting and things done because the weather has been a little problematic for them. So, I know they have a lot going on. We just want to work with MDARD International to get the word out that this funding is available.”
A worldwide credit report is available for any industry, Johnson said, but MDARD is the only state government department that has offered to incur the financial burden to support agricultural businesses of any size.