Coalition for Ag Exports Letter to Congress Supporting Market Development Funding
February 13, 2008
Honorable Tom Harkin Honorable Collin Peterson
Chairman Chairman
Committee on Agriculture, Nutrition and Forestry Committee on Agriculture
U.S. Senate U.S. House of Representatives
Washington, DC Washington, DC
Honorable Saxby Chambliss Honorable Bob Goodlatte
Ranking Minority Member Ranking Minority Member
Committee on Agriculture, Nutrition and Forestry Committee on Agriculture
U.S. Senate U.S. House of Representatives
Washington, DC Washington, DC
Dear Chairmen Harkin and Peterson and Ranking Minority Members Chambliss and Goodlatte:
The members of the Coalition to Promote U.S. Agricultural Exports take this opportunity to commend you for your leadership as you work to resolve differences in the new Farm Bill and to share our views regarding the development of the trade title.
The Coalition to Promote U.S. Agricultural Exports is an ad hoc coalition of over 100 organizations, representing farmers and ranchers, fishermen and forest product producers, cooperatives, small businesses, regional trade organizations, and the State Departments of Agriculture (see attached). The Coalition believes that the U.S. must continue to have in place policies and programs that help maintain the ability of American agriculture to compete effectively in a global marketplace still characterized by highly subsidized foreign competition.
As you work to resolve differences in the trade title, we urge your consideration and support for ramping up funding for the Market Access Program (MAP) from the existing level of $200 million annually to at least $240 million annually over the next five years, which is similar to the approach taken in the Senate version of the Farm Bill. We also support an increase to at least $44.5 million in funding annually for the Foreign Market Development (FMD) Program. In addition, we oppose any proposed reductions in the programs in the out years of a new Farm Bill and strongly believe that both MAP and FMD should be maintained as mandatory spending programs. USDA should also work to ensure that they are fully and aggressively utilized.
Farm income and agriculture’s economic well-being depend heavily on exports, which account for over 25 percent of U.S. producers’ cash receipts, provide jobs for nearly one million Americans, and make a positive contribution to our nation’s overall trade balance. Both MAP and FMD are public-private partnerships that use government funds to attract, not replace, industry funds. They are administered on a cost-share basis with farmers and other participants required to contribute up to 50 percent of their own resources. These programs are among the few tools specifically allowed in unlimited amounts under World Trade Organization (WTO) rules to help American agriculture and American workers remain competitive in a global marketplace still characterized by highly subsidized foreign competition.
A recent independent cost-benefit analysis of the MAP and FMD programs prepared for the Department of Agriculture by Global Insight, Inc.—the world’s largest economic analysis and forecasting firm—illustrates the benefit of these vital market development programs. The study found that the increase in funding for MAP and FMD authorized in the 2002 Farm Bill – combined with the increased contributions from industry – increased the U.S. share of world trade since 2001 by over one market share point to 19%, which translates into $3.8 billion in agricultural exports. For every additional dollar spent on market development, $25 in additional exports result within 3-7 years. The study also found that farm cash receipts have increased $2.2 billion during the 2002 Farm Bill due to the additional exports from market development. Higher cash receipts increased annual farm net cash income by $460 million, representing a $4 increase in farm income for every additional $1 increase in government spending on market development.
In conclusion, the Coalition to Promote U.S. Agricultural Exports strongly believes that MAP and FMD have been crucial in helping to maintain and expand U.S. agricultural exports, protect American jobs, and strengthen farm income. They have helped make agriculture one of the few sectors of the American economy that provides a positive contribution to our nation’s overall trade balance. We urge you to do everything you can to increase funding for these vital agricultural export programs in order to counter the intense foreign competition facing U.S. agriculture. We appreciate very much this opportunity to share our views and look forward to working with you as you finalize the new Farm Bill.
Sincerely,
Coalition to Promote U.S. Agricultural Exports (See Attached List)
cc: Members, House Committee on Agriculture
Members, Senate Committee on Agriculture, Nutrition, and Forestry
Members, House Committee on Foreign Affairs |