Advocate for Full Funding For MAP & FMD

BACKGROUND

actionalertThank you for your efforts to contact your member of the U.S. House of Representatives to vote in favor of funding two of USDA’s most important initiatives, the Foreign Market Development (FMD) program and the Market Access Program (MAP).  MAP was funded under the most recent Farm Bill at $200 M per year. FMD was funded under the recent Farm Bill at $34.5 M per year. Unfortunately, both are subject to a 7% reduction by the sequester (= ~185 M and =~28 M respectively) and Congress has allowed funds to be spent for administrative costs of the program (such as salaries of employees), not just the marketing of ag products and market development itself.

These initiatives create partnerships between USDA and the private sector to gain access into foreign countries for American farm products and to promote these products to new consumers abroad.  Most of these are value-added customer goods such as dairy, beef, pork, poultry, fresh produce and food service.   MAP and FMD have been major factors in America’s trade success story in recent years and agricultural exports are important to our economy. Continued support of these programs in the face of stiffer competition to develop markets in fast-growing nations by many member countries of the EU – who spent $700 M in public funds on export promotion for agri-food products in 2011 compared to our $256 M – is vitally important.

It is possible that Rep. Chabot (R-OH) may offer an amendment that would reduce funding for the Market Access Program (MAP) by $50 million.On Tuesday, June 17 the House will return to debating and voting on amendments to the FY ’15 agriculture appropriations bill which funds MAP and FMD for the next fiscal year Oc. 1, 2014 through Sept. 30, 2015.

 

GRANGE POLICY

“The National Grange Supports integrating and coordinating existing stat and federal governments’ export marketing programs, such as the Market Access Program and Market Promotion Program, and other similar programs that were designed to develop and expand foreign markets for U.S. farm products.” (National Grange Policy, 2012 Journal of Proceedings, page 206)


CALL TO ACTION (URGENT – Deadline Monday, June 16 at 5 p.m. EST)

Call your Representative in Washington. (FIND THEIR CONTACT INFORMATION) Tell him/her foreign markets are important to American agriculture.  Ask your Representative to VOTE

1) FOR the foreign market funding levels in the bill and
2) AGAINST any amendments which would reduce foreign market funding.


SUGGESTED TALKING POINT FOR GRANGERS TO CONGRESS

“Agriculture has had a continuous positive trade surplus for more than FIVE DECADES, the only industry to make such a claim,  That surplus means adding money to the American economy, not just the 1% of our population who are growers or 16% of Americans who live in rural areas.

“For every $1 spent by the government for these programs, it’s been shown that there is an average increase of $35 in exports.  In fact, for the wheat sector alone there is a $1:$115 ratio of dollars spent using MAP or FMD to dollars returned to the U.S. economy.  That’s a huge impact for programs that we know to be well-run and administered and we hope both programs and all others under the Foreign Agricultural Service that do similar things for our ag producers and local communities can be fully funded.”


ADDITIONAL INFORMATION

Looking just at MAP, we can see many areas positively impacted. For information specific to FMD, please contact Amanda Leigh Brozana at abrozana@nationalgrange.org.

MAP HELPS BOOST U.S. AGRICULTURAL EXPORTS

  • The export forecast for FY 14 is estimated to be approximately $142.6 billion, which would surpass by $1.7 billion the all-time record level of $140.9 billion achieved in FY 13. Since the program was created in 1985, U.S. agricultural exports have increased by nearly 500 percent. (Source USDA)
  • Agriculture’s trade surplus was $32.4 billion in FY 12, $37.1 billion in FY 13 and is forecast to be $32.6 billion for FY 14. (Source USDA) Agriculture is still one of the few sectors of the American economy to enjoy a trade surplus, and without it the overall U.S. trade deficit would be even worse.
  • An updated study of MAP and the Foreign Market Development (FMD) Program done by IHS Global Insight showed that the increase in market development spending by government and industry during the 2002-09 period through these programs considerably increased U.S. export market share and increased the annual value of U.S. agricultural exports by $6.1 billion. Multiyear impact of the increased market development spending is equal to $35 in agricultural export gains for every additional $1 expended, a 35 to 1 return on investment. (Source: A Cost Benefit Analysis of USDA’s International Market Development Programs, IHS Global Insight (USA), Inc., March 2010).
  • World trade growth is expected to increase in 2014, and a lower dollar (compared to 2000-10) and lower production costs will likely keep U.S. agricultural products competitively priced. This reinforces the need for valuable programs, such as MAP, that help create, expand, and maintain international markets for U.S. agricultural products.

MAP PROTECTS AMERICAN JOBS AND INCREASES FARM INCOME

  • Serves as a “BUY AMERICAN” program by promoting only American-grown and produced commodities.
  • Given U.S. agricultural exports are forecast to be $142.6 billion in FY 14, about 1 million Americans will have jobs that depend on these exports, thanks in part to MAP and related programs that have helped boost U.S. agricultural exports. (Source USDA)
  • An updated USDA-commissioned study of MAP and FMD shows that over the 2002-09 period export gains associated with the programs increased the average annual level of U.S. farm cash receipts by $4.4 billion and net cash farm income by $1.5 billion. The study also shows that U.S. domestic farm support payments were reduced by roughly $54 million annually due to higher prices from increased demand abroad, thus reducing the net cost of the programs. (Source: A Cost Benefit Analysis of USDA’s International Market Development Programs, IHS Global Insight (USA), Inc., March 2010).

MAP HELPS COUNTER SUBSIDIZED FOREIGN COMPETITION

  • U.S. farmers and ranchers are competing in a very active international agri-food trade environment with many countries that invest significant public and private funds according to a major study* completed last year on behalf of several U.S. agri-food export market development organizations. (Source: An Analysis of Competitor Countries’ Market Development Programs, Agralytica Consulting, June 2013)
  • The study found that together in 2011, 12 countries and the EU central government alone spent an estimated $1.8 billion, including $700 million in public funds and $1.1 billion in private funds, on export promotion for agri-food products. For comparison, in 2011, the total U.S. export promotion public expenditure was $256 million. Compared to agricultural production value, the U.S. public spending on export market development is among the lowest relative to these 12 nations.
  • Eliminating or reducing funding for MAP in the face of continued highly subsidized international competition would put American farmers and workers at a substantial competitive disadvantage.
  • Market development, including programs such as MAP, is not expected to be subject to World Trade Organization (WTO) disciplines. Reducing our investments in market promotion while our competitors continue to increase theirs will put our producers at a decided disadvantage in competing for international sales.

MAP ILLUSTRATES SUCCESSFUL PUBLIC-PRIVATE PARTNERSHIP

  • MAP is administered on a reimbursable cost-share basis, specifically targeting small businesses, farmer cooperatives, and non-profit trade organizations. While government is an important partner in this effort, industry contributions are now estimated to represent over 60% of total annual spending on market development and promotion, up from roughly 45% in 1996 and less than 30% in 1991, which demonstrates industry commitment to the effort (Source USDA). Without the incentive of MAP funding through this important cost-share program, it is highly unlikely that private funds could be attracted to form a strategic and coordinated U.S. agricultural export promotion effort.