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Panelists call for increased spending on market development programs

Witnesses: International market development critical to accessing overseas markets.

The House Agriculture Committee’s Subcommittee on Livestock and Foreign Agriculture held a hearing to examine the international market development programs administered by USDA's Foreign Agricultural Service on Feb. 28, 2017.

Members heard from a variety of witnesses in the agricultural industry, including:

  • Dr. Gary Williams, professor of Agricultural Economics & Co-Director of the Food, Agribusiness and Consumer Economics Research Center, Texas A&M University;
  • Joseph Steinkamp, director, American Soybean Association, Evansville, IN; on behalf of the Coalition to Promote U.S. Agriculture Exports and the Agribusiness Coalition for Foreign Market Development;
  • Tim Hamilton, executive director, Food Export-Midwest and Food Export-Northeast;
  • Philip Seng, president & CEO, U.S. Meat Export Federation;
  • Dean Alanko, vice president of sales and marketing, Allegheny Wood Products on behalf of the Hardwood Federation; and
  • Paul Wenger, almond grower and president, California Farm Bureau.

The witnesses discussed the critical nature of international market development programs in increasing and enhancing access to overseas markets. The hearing was a continuation of the committee’s hearing series on the next farm bill.

“It is important that we recognize the overarching benefits that market development funding brings the U.S. agricultural industry as a whole—benefits to American farmers and small businesses that would not be otherwise achieved," said Subcommittee Chairman David Rouzer, a North Carolina Republican. "These USDA programs continue to facilitate our farmers’ and ranchers’ efforts to reach new markets and have proven invaluable in helping to level the playing field within those global markets. We must continue to invest in these programs so demand for U.S. food and fiber continues to grow and American agriculture remains strong."

“Our competitors are outspending us on export promotion programs by a huge margin," said Agriculture Committee Chairman K. Michael Conaway. "Couple that with a host of countries who continue to employ trade distorting domestic policies with no regard to their WTO commitments, and it is easy to see why it is becoming harder and harder for our producers to compete on the global stage. International market development programs like the Market Access Program and the Foreign Market Development program are essential tools in helping to overcome such obstacles."

Steinkamp called on Congress to double funding for the Market Access Program (MAP) and Foreign Market Development (FMD) programs. He touted agricultural exports as the strongest positive contributor to the U.S. trade balance and highlighted the need to increase funding for these programs.

Steinkamp specifically urged Congress to increase funding for MAP to $400 million annually, which Wenger echoed, and for FMD to $69 million annually, with the increases phased in as part of the next Farm Bill. 

“Increasing exports is a significant tool to improve the lives of America’s farmers and ranchers while creating jobs, expanding the farm economy and the larger U.S. economy, and increasing revenues to the Treasury,” said Steinkamp, who farms in Evansville, Ind., and also serves as an Indiana Soybean Alliance director. “The FMD and MAP programs have been critically important to this success.”

According to USDA’s Economic Research Service, the $150 billion in U.S. agricultural exports that occurred in 2014 supported 1.1 million full time U.S. civilian jobs, representing 7,550 jobs for every $1 billion of agricultural export revenue. 

“Agricultural exports are one of the brightest lights in the U.S. economy, with a strong multiplier effect that is especially pronounced in rural communities,” Steinkamp said.

Williams talked about research that found USDA Export Market Development Programs have been "highly effective" in boosting agricultural exports.

"The study found that over their history (1977-2014), USDA Export Market Development Programs have added an annual average of 15.3% to the value of U.S. agricultural exports, 8% to the volume of aggregate U.S. agricultural exports and about 6.7% to the aggregate price of U.S. agricultural exports," Williams said.

"Food and agricultural producers are challenged to find growth opportunities here at home," said Hamilton. "At the same time, emerging markets overseas offer tremendous growth potential for these U.S. producers, if only companies know about these markets and how to take advantage of them."

"The Market Access Program is a model of innovative and effective government-industry partnership," said Wenger, a member of Blue Diamond almonds. "The synergies produced through the program are compelling and well-documented. In today’s increasingly challenging environment for America’s farmers and ranchers, the need for expanding the program has never been greater."

Source: ASA, House Agriculture Committee

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