WASHINGTON, DC -- The Coalition to Promote U.S. Agricultural Exports conducted a study recently indicating that public-private U.S. agricultural export market development programs remain highly effective and generate a substantial return on investment. The econometric study, conducted by IHS Markit and Texas A&M University, showed export programs added an average of $9.6 billion per year to U.S. export value between 1977 and 2019. The additional exports generated as a result of the programs also added 225,800 new jobs across the entire U.S. economy.
The study also reported that market development programs leveraged cooperator and industry contributions, averaging between 70 to 77 percent of total expenditures from 2013 to 2019, valued at an estimated annual average of $567 million. The U.S. rice industry, which relies on exports for survival, far exceeds those figures, with industry contributing more than 900 percent of expenditures in 2020.
“This study is quite timely as we seek to maintain and hopefully increase the annual funding for these vital programs,” said Sarah Moran, USA Rice vice president international. “The federal budget for the Market Access Program (MAP) has been fixed at $200 million per year since 2006 and the Foreign Market Development’s (FMD) $34.5 million annual budget has not changed since 2002. With inflation, sequestration, and new cooperator groups receiving allocations, U.S. agriculture has been losing out on even greater market growth due to reduced real dollars for export marketing programs.”
To compare, in 2006, $200 million had the equivalent buying power of about $133 million today, and $34.5 million in 2002 has the purchasing power of about $21 million today.
Last month, members of the
Coalition and additional organizations sent letters asking U.S. House and Senate agricultural appropriations subcommittee leadership to maintain funding of at least $200 million for MAP and $34.5 million for the FMD program in FY2023. Citing strong competition for growing global food demand, the organizations said, “these modest investments, paired with full private-sector cost share, are invaluable as we race to reclaim global export markets shut off during the pandemic and diversify markets amid war and geopolitical unrest.”
“Our work indicated that MAP and FMD have accounted for 13.7 percent, or almost $648 billion, of all the revenue generated by U.S. agricultural exports between 1977 and 2019,” said Dr. Gary Williams, one of the agricultural economists who conducted the study. “The additional export revenue bolsters the entire U.S agricultural sector and creates a multiplier effect throughout the U.S. economy.”
MAP and FMD are funded through the Agricultural Trade Promotion and Facilitation program in the 2018 Farm Bill and administered by the U.S. Department of Agriculture’s Foreign Agricultural Service (FAS). MAP and FMD offer competitive grants for export development and promotion activities to non-profit agriculture organizations that contribute funds from checkoff programs and industry support.