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Agricultural News

Study Shows Agricultural Export Promotion Investment is an International Priority

Mon, 10 Jun 2013 12:20:56 CDT

Study Shows Agricultural Export Promotion Investment is an International Priority
U.S. farmers and ranchers are competing in a very active international agri-food trade environment with many countries that invest significant public and private funds through a variety of programs to develop markets and promote their products. That is a primary conclusion of a major study just completed on behalf of several U.S. agri-food export market development organizations by Agralytica Consulting, Alexandria, Va.

"This is the first study to take an in-depth look at both competing export market development programs as well as the source and amount of funding," said Shannon Schlecht, vice president of policy at U.S. Wheat Associates (USW), Arlington, Va. "Exports are vital to U.S. agricultural producers with 95 percent of consumers living outside our borders. The analysis was designed to give organizations like ours strategic, competitive information we can use to help make our export promotion plans more effective for the farmers, ranchers and small businesses we represent."

USW led a team of USDA Foreign Agricultural Service (FAS) cooperator organizations that directed the study. Funding came from a portion of the FAS Market Access Program (MAP) to encourage multi-market, cross-commodity projects that address common challenges and opportunities.

These organizations and Agralytica selected 12 countries and the European Union (EU) central government programs for in-depth study including desk research, in-person interviews and consultation with U.S. Agricultural Trade Offices in the target countries. The study provided new information about competing export development activities, program structure, funding and evaluation methods. Key insights include:

·        Together in 2011 the 12 countries and the EU central government spent an estimated $1.8 billion, including $700 million in public funds and $1.1 billion in private funds, on export promotion for agri-food products. For comparison, in 2011 the United States spent an estimated $650 million, including $256 million in public funds and $394 million in private investment, on agri-food export promotion.

·        The EU 27 central government alone allocated an estimated total of $360 million of public funds in 2011 to Member States for export promotion; the additional public investment by governments in France, Italy, Spain and The Netherlands brought that total to $460 million. The research indicates that promotion funds are budgeted to increase significantly in the EU 2014 to 2020 budget.   

·        Trade shows are universally recognized as effective and essential activities requiring government support.   

·        Public support to small and medium sized enterprises (SMEs) is a key objective of competitor programs.

·        Trade missions, both inward and outward, are viewed as effective and used by most of our competitors.   

·        Focus on market access is growing. In general, monitoring trade policies and securing market access are seen as essential components of market development.

·        In contrast to U.S. federal rules for export development programs, some counties allow more flexibility in eligibility while others limit it based on product sectors and/or target markets. Some countries allow for multi-year funding of export promotion programs.

"The analysis clearly indicates that agricultural producers everywhere recognize the importance of competing in international markets," Schlecht said. "Now we have evidence that competitors are likely to keep increasing their investment in export development and promotion."   

The study also makes comparisons between competing programs and U.S. market development programs administered by FAS, including MAP and the Foreign Market Development (FMD) program. The summary report states that U.S. programs "provide an effective solution to many issues faced by competitors." The study did not examine such other programs as export finance, tax policy or farm support programs.



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