|Excellent Returns from Wheat Export Investment|
The Market Access Program (MAP) and Foreign Market Development (FMD) program administered by USDA’s Foreign Agricultural Service (FAS) form the core of a highly successful partnership between non-profit U.S. agricultural trade associations, farmer cooperatives, non-profit state-regional trade groups, small businesses, and USDA to share the costs of overseas market development efforts. These programs continue to have a positive and significant impact on U.S. agricultural exports.
MAP and FMD are crucial to the U.S. wheat industry to maintain sales and market share in an increasingly competitive trade environment. USW leverages funds from these programs, portions of the state wheat checkoff funds and in-kind contributions from state wheat commissions to fulfill its mission to “Develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” The financial resources total nearly $17 million for marketing year 2010/11 to support wheat export market development in more than 100 countries.
By any measure, MAP and FMD are successful public-private programs with:
To learn more about how USDA/FAS market development programs deliver an excellent return on investment to farmers, small businesses, and the U.S. economy, visit the U.S. Agricultural Export Development Council website at www.usaedc.org/success.cfm.
- excellent returns, that actually grow with the investment, to the government and farmer cooperators;
- proven potential to create American jobs and help the rural economy grow;
- efficient, effective administration;
- direct contributions that improve conditions for the private sector to increase exports;
- benefits to the entire agricultural supply chain from wheat farmers to the longshoremen who load wheat on vessels for export.
Because U.S. wheat producers invest checkoff dollars through 19 state wheat commissions and state-funded special projects, USW qualifies to receive cost-share funding from USDA’s Foreign Agricultural Service through both MAP and the FMD program. The two programs are distinct, public-private partnerships that address different aspects of market development in complex export markets.
U.S. wheat producers invested an average of about $10 million per year to promote their products overseas between 2000 and 2007, and for every one of those dollars they received $23 back in increased net revenue. That is the principal conclusion of economic analysis of wheat export promotion conducted by Cornell University and commissioned by USW. The study also showed that every dollar invested by producers and the federal government returned $115 in gross revenue to producers, the wheat supply chain and the U.S. economy.
Wheat commissions from 19 states contributed an estimated $12.8 million in checkoff funds and in-kind services in 2009/2010 to qualify for MAP and FMD activities conducted by USW. These cost-share programs provide a critical incentive to invest in U.S. grain export market development. Without them, it is highly unlikely that there would be sufficient private funds to maintain a strategic, coordinated export promotion in the increasingly competitive global wheat market.
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