How the Market Access Program Boosts U.S. Jobs, Economy
Published: Sep 08, 2011
The USDA Market Access Program (MAP) uses funds from USDA’s Commodity Credit Corporation (CCC) to aid in the creation, expansion and maintenance of foreign markets for U.S. agricultural products. MAP forms a partnership between non-profit U.S. agricultural trade associations, farmer cooperatives, non-profit state and regional trade groups, small businesses and USDA to share the costs of overseas marketing and promotional activities, as well as improving market access for U.S. products by lowering trade barriers and creating a more favorable business climate.
“Having been a part of the effort to promote U.S. products overseas for many years now, I can say without hesitation that MAP funding is an absolutely critical component in USMEF’s success in growing U.S. red meat exports,” said USMEF President and CEO Philip Seng. “MAP is a program that has stood the test of time, and has proven to be a very beneficial to U.S. agriculture and the entire U.S. economy.”
These are just a few of the ways in which MAP helps boost U.S. agricultural exports:
MAP is administered on a reimbursable, cost-share basis. While government is an important partner in this effort, industry contributions represent almost 60 percent of total annual spending on market development and promotion - up from less than 50 percent in 1996 and less than 30 percent in 1991. While this clearly demonstrates a strong industry commitment to foreign marketing, removing the incentive of MAP funding could hinder the ability to attract private funds and jeopardize export promotion efforts.
“While Congress faces very tough choices in terms of budget priorities, it’s important for lawmakers to understand the ramifications of eliminating or severely reducing MAP funding,” Seng said. “At a time when our competitors in key foreign markets are increasing their marketing commitments, this would put U.S. producers at a serious disadvantage. In the long run, that’s going to mean less tax revenue from agricultural operations, not just at the federal level but for state and local governments as well. And it will mean lower agricultural employment in an economy that simply cannot afford to shed a single job.”
*The United States leads all individual countries in 2011 pork exports, though collectively the European Union has the largest export total.
“Having been a part of the effort to promote U.S. products overseas for many years now, I can say without hesitation that MAP funding is an absolutely critical component in USMEF’s success in growing U.S. red meat exports,” said USMEF President and CEO Philip Seng. “MAP is a program that has stood the test of time, and has proven to be a very beneficial to U.S. agriculture and the entire U.S. economy.”
These are just a few of the ways in which MAP helps boost U.S. agricultural exports:
- To capitalize on a recovering global economy and stronger commodity prices, U.S. producers must compete effectively in foreign markets. The U.S. ag export forecast for FY 2011 is an all-time record of $135.5 billion, up $26.8 billion from last year and more than $20.6 billion higher that the all-time record level set in 2008. Since 1985 - when MAP’s predecessor, the Targeted Export Assistance (TEA) Program, was created - U.S. agricultural exports have increased nearly 300 percent.
- U.S. agriculture’s trade surplus was $22.9 billion in FY 2009, $29.7 billion for FY 2010, and is forecast to reach $47.5 billion for FY 2011. Agriculture is one of the few sectors of the American economy to enjoy a trade surplus, and without this surplus the overall U.S. trade deficit would be much worse.
- Last year, the U.S. balance of trade received a $4.24 billion boost from the red meat industry. Record-high export values for beef ($4.08 billion) and the second-highest total on record for pork ($4.78 billion) fueled this trade surplus. Total U.S. red meat exports in 2010 were valued at $8.88 billion, 19.4 percent higher than the previous year and 4 percent higher than the previous record set in 2008. According to USDA calculations, that $8.88 billion in exports supported an estimated 107,000 U.S. jobs.
- Successful foreign marketing efforts are boosting the percentage of total beef and pork production the U.S. industry exports, and this is important to producers’ bottom line. For the first half of 2011, beef exports equated to nearly 14 percent of total production with an export value of more than $192 per head of fed slaughter. Pork exports accounted for more than 27 percent of total production with export value of almost $53 per head. The United States also recaptured its position as the world’s leading exporter of both beef and pork.*
- A recent study of MAP and the Foreign Market Development (FMD) Program showed that the multiyear impact of increased market development spending is equal to $35 in agricultural export gains for every additional $1 expended – a 35-to-1 return on investment! (Source: A Cost Benefit Analysis of USDA’s International Market Development Programs, IHS Global Insight, Inc., March 2010).
MAP is administered on a reimbursable, cost-share basis. While government is an important partner in this effort, industry contributions represent almost 60 percent of total annual spending on market development and promotion - up from less than 50 percent in 1996 and less than 30 percent in 1991. While this clearly demonstrates a strong industry commitment to foreign marketing, removing the incentive of MAP funding could hinder the ability to attract private funds and jeopardize export promotion efforts.
“While Congress faces very tough choices in terms of budget priorities, it’s important for lawmakers to understand the ramifications of eliminating or severely reducing MAP funding,” Seng said. “At a time when our competitors in key foreign markets are increasing their marketing commitments, this would put U.S. producers at a serious disadvantage. In the long run, that’s going to mean less tax revenue from agricultural operations, not just at the federal level but for state and local governments as well. And it will mean lower agricultural employment in an economy that simply cannot afford to shed a single job.”
*The United States leads all individual countries in 2011 pork exports, though collectively the European Union has the largest export total.