FMD-MAP: Facts About the Market Access Program (MAP)
The Market Access Program (MAP), originally known as the Targeted Export Assistance (TEA) Program when it was created in the 1985 Farm Bill, uses funds from the U.S. Department of Agriculture’s Commodity Credit Corporation (CCC) to aid in the creation, expansion, and maintenance of foreign markets for U.S. agricultural products. MAP, which is administered by USDA’s Foreign Agricultural Service (FAS), forms a 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 marketing and promotional activities such as consumer promotions, market research, trade shows, and trade servicing. The Coalition to Promote U.S. Agricultural Exports strongly urges the Administration and Congress to maintain funding for MAP at the existing level of $200 million annually, as authorized by the 2008 Farm Bill.
MAP HELPS BOOST U.S. AGRICULTURAL EXPORTS
- Exports are projected to be $100 billion in FY 10, up $2 billion from last year’s level but still well below the record $115 billion in 2008. Since the program was created in 1985, U.S. agricultural exports increased by nearly 300 percent, which was reached at their peak in 2008 (Source USDA).
- Agriculture’s trade surplus was $23 billion in FY 09 and is projected to be about $23 billion in FY 10 (Source USDA). Agriculture is 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.
- A study of MAP and the Foreign Market Development (FMD) Program done by Global Insight showed that these programs successfully increased U.S. agricultural exports. In fact, the study showed that the additional program funding provided in the 2002 Farm Bill increased the U.S. share of world trade by over 1 market share point to 19%, boosting U.S. agricultural exports by $3.8 billion (Source: A Cost Benefit Analysis of USDA’s International Market Development Programs, Global Insight Inc., November 2006).
- A modest recovery in the global economy is expected in 2010, which may increase demand for agricultural products. This reinforces the need for valuable programs, such as MAP, that help create, expand, and maintain foreign 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.
- Every billion dollars in U.S. agricultural exports supports 8,000 American jobs. (Source USDA).
- Given U.S. agricultural exports are expected to be $100 billion in FY 10, 800,000 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)
- A study of MAP and FMD commissioned by FAS showed that, over the course of the 2002 Farm Bill, annual farm cash receipts increased by $2.2 billion due to the increase in U.S. agricultural exports that resulted from increased market development activities. Higher cash receipts helped increase 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 (Source: A Cost Benefit Analysis of USDA’s International Market Development Programs, Global Insight Inc., November 2006).
MAP HELPS COUNTER SUBSIDIZED FOREIGN COMPETITION
- In recent years, the EU, the Cairns Group, and other foreign competitors have devoted considerable resources on various market development activities to promote their exports of agricultural, forestry, and fishery products (Source USDA). A significant portion of this is carried out in the U.S.
- Eliminating or reducing funding for MAP in the face of continued subsidized foreign competition and during ongoing Doha Round World Trade Organization (WTO) negotiations would put American farmers and workers at a substantial competitive disadvantage.
- Market development, including programs such as MAP, are not expected to be subject to WTO disciplines under Doha. 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 funds are now estimated to represent almost 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.
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- 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 a new economic analysis of wheat export promotion by U.S. Wheat Associates (USW), the wheat industry’s export market development organization. Dr. Harry M. Kaiser, the Gellert Family Professor of Applied Economics and Management at Cornell and director of the Cornell Commodity Promotion Research Program (CCPRP), designed and conducted the research, commissioned by USW, using established methods he and the CCPRP team developed. “The study showed that U.S. wheat export promotion had a large and beneficial impact for producers and the economy that far exceeded its cost,” Dr. Kaiser said. “One of the econometric models we used showed that the overall average revenue benefit to the entire wheat industry from the combined producer and FAS expenditures was estimated to be about $115 for each dollar spent.” The study also predicted that increasing the promotion investment has the potential for even greater returns to wheat producers, the wheat supply chain, and the U.S. economy.
UNIQUE CHARACTERISTICS OF THE FOREIGN MARKET DEVELOPMENT (FMD) PROGRAM AND THE MARKET ACCESS PROGRAM (MAP)
The FMD and MAP programs represent highly successful partnerships between producer organizations, state and regional trade groups, and USDA's Foreign Agricultural Service. U.S. agricultural producers are the direct and indirect beneficiaries of these programs through the additional economic activity generated by increased export volume and value of US agricultural products. FMD and MAP help fund activities that provide information, technical and trade services, and coordinated market access efforts that open and maintain export markets for U.S.-produced agricultural commodities and value-added products.
THE FOREIGN MARKET DEVELOPMENT PROGRAM (FMD) - is designed to establish on-the-ground country or regional presence, identify new markets, address long-term foreign import constraints, and built export growth opportunities. Specifically, U.S. Wheat Associates (USW) relies on FMD to:
- Sponsor high level foreign buyer or processor missions to the United States (within the provisions of the Federal Travel Regulations);
- Pay overseas office salary cost, including future employee severance obligations, which makes it possible to employ experienced, knowledgeable staff in key market locations; and
- Use both of these key features to maintain on-going contact with and provide reliable information and problem solving to key buyers and U.S. wheat users throughout the world.
FMD is particularly valuable for a smaller group of large-volume commodities like wheat, cotton, soybeans, feed grains, etc, whose producers rely on exports to multiple markets for a large share of their income all year, every year.
THE MARKET ACCESS PROGRAM (MAP) - is designed to create, maintain, and expand existing markets to generate the greatest benefits for all products sectors. Specifically, USW relies on MAP to:
- Conduct a variety of consulting and training activities to advise and educate buyers and processors;
- Establish and maintain milling, baking and other training facilities to service key markets;
- Develop wheat quality, food safety, phytosanitary and other information resources to address importer concerns and meet importing country requirements;
- Conduct consumer promotion activities; and
- Pay rent and other current year expenses for overseas offices.
MAP is valuable for a much broader range of large and small commodity groups, many of which have seasonal export opportunities or target a more limited number of markets and which may have a more limited need for on-going overseas presence. MAP also makes possible consumer promotion activities such as USW's Quality Seal program
U.S. Wheat Associates is the industry’s market development organization working in more than 100 countries on behalf of America's wheat producers. The activities of U.S. Wheat Associates are made possible by producer checkoff dollars managed by 19 state wheat commissions and through cost-share funding provided by USDA’s Foreign Agricultural Service. For more information, visit www.uswheat.org or contact your state wheat commission.
Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY - 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer. |