Despite Positive Returns, Market Access Program Faces Political Opposition
Despite Positive Returns, Market Access Program Faces Political Opposition
The Market Access Program (MAP), which has provided enormous returns to the U.S. beef and pork industries since its creation in 1985, is one of a number of U.S. Government-funded programs under scrutiny as Congress examines ways to reduce spending.
Projected to be funded at $160 million in FY 2011, the MAP program has made critical contributions to U.S. agriculture exports. In fact, the additional program funding provided in the 2002 Farm Bill increased the U.S. share of world trade by more than 1 market share point to 19 percent – with that 1 market share point valued at $3.8 billion. With the help of MAP, U.S. agriculture is one of the few sectors of the economy to enjoy a trade surplus.
“MAP funding has been an invaluable asset for U.S. agriculture,” said Jim Peterson, a beef producer from Buffalo, Mont., and chairman of the U.S. Meat Export Federation (USMEF). “It has enabled us to take the checkoff funds that USMEF receives from the beef, pork, corn and soybean industries and extend them to get a much greater return for U.S. producers.”
Since the MAP program was created in 1985, the U.S. Department of Agriculture (USDA) estimates that U.S. agricultural exports have increased nearly 300 percent. Exports are projected to be $100 billion in FY 2010, up $2 billion from last year. USDA projects the U.S. agricultural trade surplus at $23 billion in FY 2010, the same as in FY 2009.
MAP funds drive agricultural exports, create thousands of U.S. jobs
A key benefit of this support for U.S. agriculture is a $4 increase in farm income for every $1 increase in government spending on market development, according to a study of MAP and the Foreign Market Development (FMD) Program conducted by Global Insight. The study 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 resulting from increased market development activities. Higher cash receipts helped increase annual farm net cash income by $460 million (Source: A Cost Benefit Analysis of USDA’s International Market Development Programs, Global Insight Inc., November 2006).
Given that every $1 billion in U.S. agricultural exports supports 8,000 American jobs (source: USDA), the estimated $100 billion in U.S. agricultural exports projected for FY 2010 will support 800,000 American jobs.
A successful public-private partnership
MAP is administered on a reimbursable cost-share basis, specifically targeting small businesses, farmer cooperatives and nonprofit trade organizations. While government is an important partner in this effort, industry funds are estimated to represent almost 60 percent of total annual spending by these groups on market development and promotion, up from less than 30 percent in 1991, which demonstrates industry commitment to the effort (Source: USDA).
USMEF leverages MAP funds with investments by industry partners in the U.S. and customers in foreign markets. For every $1 in MAP and Foreign Market Development (FMD) funds, USMEF receives about 83 cents in checkoff funds from the beef, pork, corn and soybean industries, 70 cents of in-kind contributions from wholesale, retail and food service partners in overseas markets and 6 cents in non-checkoff funds to magnify the return on investment. That creates $2.59 in purchasing power for every $1 of combined MAP and FMD funds.
Countering subsidized foreign competition
Another important role of MAP funding is offsetting the considerable resources that U.S. competitors (including the EU and the Cairns Group – a coalition of 19 exporting countries: Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Pakistan, Paraguay, Peru, the Philippines, South Africa, Thailand and Uruguay) use to promote their agricultural export market development activities.
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, particularly since market development, including programs such as MAP, are not subject to WTO disciplines.
“Since our competitors can spend an unlimited amount of money on these types of programs, we see them shifting resources away from export subsidies, which are subject to disciplines, to programs like this,” Peterson said. “Reducing our investments in market promotion while our competitors increase theirs will put our producers at a decided disadvantage in competing for international sales.”
As an example of the value of the MAP program, Peterson cites the beef imaging campaign that USMEF developed in South Korea late last year with MAP funds and Beef Checkoff dollars. In the first three months of the campaign, the percentage of Korean consumers who reported purchasing U.S. beef doubled, and U.S. beef exports to Korea in January and February are up 50 percent over the same period in 2009, reaching 28.7 million pounds.
Peterson noted that Rep. Scott Garrett (R-NJ) and Rep. Patrick Murphy (D-PA), recently introduced H.R. 4683, the Scrap the MAP Act, to eliminate the MAP program.
“This action would put U.S. agricultural exports and thousands of U.S. jobs in jeopardy,” Peterson said. “I would encourage all USMEF members and all participants in the beef, pork, corn and soybean checkoff programs to contact their congressional representatives and senators and request their support for maintaining the MAP program.”
# # #
The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn and soybean checkoff programs.
For more information, contact Jim Herlihy at jherlihy@usmef.org.
USMEF complies with all equal opportunity, non-discrimination and affirmative action measures applicable to it by contract, government rule or regulation or as otherwise provided by law.
Despite Positive Returns, Market Access Program Faces Political Opposition
The Market Access Program (MAP), which has provided enormous returns to the U.S. beef and pork industries since its creation in 1985, is one of a number of U.S. Government-funded programs under scrutiny as Congress examines ways to reduce spending.
Projected to be funded at $160 million in FY 2011, the MAP program has made critical contributions to U.S. agriculture exports. In fact, the additional program funding provided in the 2002 Farm Bill increased the U.S. share of world trade by more than 1 market share point to 19 percent – with that 1 market share point valued at $3.8 billion. With the help of MAP, U.S. agriculture is one of the few sectors of the economy to enjoy a trade surplus.
“MAP funding has been an invaluable asset for U.S. agriculture,” said Jim Peterson, a beef producer from Buffalo, Mont., and chairman of the U.S. Meat Export Federation (USMEF). “It has enabled us to take the checkoff funds that USMEF receives from the beef, pork, corn and soybean industries and extend them to get a much greater return for U.S. producers.”
Since the MAP program was created in 1985, the U.S. Department of Agriculture (USDA) estimates that U.S. agricultural exports have increased nearly 300 percent. Exports are projected to be $100 billion in FY 2010, up $2 billion from last year. USDA projects the U.S. agricultural trade surplus at $23 billion in FY 2010, the same as in FY 2009.
MAP funds drive agricultural exports, create thousands of U.S. jobs
A key benefit of this support for U.S. agriculture is a $4 increase in farm income for every $1 increase in government spending on market development, according to a study of MAP and the Foreign Market Development (FMD) Program conducted by Global Insight. The study 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 resulting from increased market development activities. Higher cash receipts helped increase annual farm net cash income by $460 million (Source: A Cost Benefit Analysis of USDA’s International Market Development Programs, Global Insight Inc., November 2006).
Given that every $1 billion in U.S. agricultural exports supports 8,000 American jobs (source: USDA), the estimated $100 billion in U.S. agricultural exports projected for FY 2010 will support 800,000 American jobs.
A successful public-private partnership
MAP is administered on a reimbursable cost-share basis, specifically targeting small businesses, farmer cooperatives and nonprofit trade organizations. While government is an important partner in this effort, industry funds are estimated to represent almost 60 percent of total annual spending by these groups on market development and promotion, up from less than 30 percent in 1991, which demonstrates industry commitment to the effort (Source: USDA).
USMEF leverages MAP funds with investments by industry partners in the U.S. and customers in foreign markets. For every $1 in MAP and Foreign Market Development (FMD) funds, USMEF receives about 83 cents in checkoff funds from the beef, pork, corn and soybean industries, 70 cents of in-kind contributions from wholesale, retail and food service partners in overseas markets and 6 cents in non-checkoff funds to magnify the return on investment. That creates $2.59 in purchasing power for every $1 of combined MAP and FMD funds.
Countering subsidized foreign competition
Another important role of MAP funding is offsetting the considerable resources that U.S. competitors (including the EU and the Cairns Group – a coalition of 19 exporting countries: Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Pakistan, Paraguay, Peru, the Philippines, South Africa, Thailand and Uruguay) use to promote their agricultural export market development activities.
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, particularly since market development, including programs such as MAP, are not subject to WTO disciplines.
“Since our competitors can spend an unlimited amount of money on these types of programs, we see them shifting resources away from export subsidies, which are subject to disciplines, to programs like this,” Peterson said. “Reducing our investments in market promotion while our competitors increase theirs will put our producers at a decided disadvantage in competing for international sales.”
As an example of the value of the MAP program, Peterson cites the beef imaging campaign that USMEF developed in South Korea late last year with MAP funds and Beef Checkoff dollars. In the first three months of the campaign, the percentage of Korean consumers who reported purchasing U.S. beef doubled, and U.S. beef exports to Korea in January and February are up 50 percent over the same period in 2009, reaching 28.7 million pounds.
Peterson noted that Rep. Scott Garrett (R-NJ) and Rep. Patrick Murphy (D-PA), recently introduced H.R. 4683, the Scrap the MAP Act, to eliminate the MAP program.
“This action would put U.S. agricultural exports and thousands of U.S. jobs in jeopardy,” Peterson said. “I would encourage all USMEF members and all participants in the beef, pork, corn and soybean checkoff programs to contact their congressional representatives and senators and request their support for maintaining the MAP program.”
# # #
The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn and soybean checkoff programs.
For more information, contact Jim Herlihy at jherlihy@usmef.org.
USMEF complies with all equal opportunity, non-discrimination and affirmative action measures applicable to it by contract, government rule or regulation or as otherwise provided by law.