2002-03-12 FMD and MAP funding
- Speaker: Coalition to Promote U.S. Agricultural Exports
- Subject: FMD and MAP funding
- Venue: Chairman Harkin and Chairman Combest
- Date of Speech: March 12, 2002
March 12, 2002
Honorable Tom Harkin
Chairman
Committee on Agriculture, Nutrition, and Forestry
U.S. Senate
Washington, DC 20510
Honorable Larry Combest
Chairman
Committee on Agriculture
U.S. House of Representatives
Washington, DC 20515
Dear Chairman Harkin and Chairman Combest:
We, as members of the Coalition to Promote U.S. Agricultural Exports, would like to take this opportunity to commend you for your leadership as you work to resolve differences in the new Farm Bill and to share our views regarding the development of the trade title.
The Coalition to Promote U.S. Agricultural Exports is an ad hoc coalition of over 80 organizations, representing farmers and ranchers, fishermen, cooperatives, small businesses, regional trade organizations, and the State Departments of Agriculture (see attached). The Coalition believes that the U.S. must continue to have in place policies and programs that help maintain and strengthen the ability of American agriculture to compete effectively in a global marketplace still characterized by subsidized foreign competition.
As you work to resolve differences in the trade title, we urge your consideration and support for $200 million annually for the Market Access Program (MAP) as well as separate funding of $43.25 million annually for the Foreign Market Development (FMD) Program. In addition, with regard to language contained in the Senate bill giving preference to new participants and those involved in emerging markets, we believe that this language should be removed. While we support the inclusion of new participants that are not already represented by another commodity group, we feel the current language limits USDA's flexibility, and the program participant's flexibility, to help U.S. exporters capitalize on new market opportunities and to carry out a cohesive export strategy under ever-changing market conditions.
It should be noted that MAP was originally authorized in the 1985 Farm Bill at a level of $325 million annually, and actual funding reached a high of $200 million per year in the late 1980's and early 1990's. Since then, funding has been gradually reduced to its current level of $90 million-a reduction of more than 50 percent.
Consider what our foreign competitors are doing. According to recent USDA data, the EU and other competitors are outspending the U.S. by a factor of 20 to 1 with regard to the use of export subsidies and other expenditures for export promotion. In 1998 (the most recent year for which data is available), in addition to spending $6 billion in export subsidies, our leading foreign competitors spent a combined $1 billion on various activities to promote their exports of agricultural, forestry, and fishery products, including some $379 million by the EU.
According to USDA, spending by these competitor countries on market promotion increased by 50 percent over the 1995-98 time period, while U.S. spending remained flat. We have no reason to believe that this trend has changed since then. Furthermore, almost all of this increase has been directed to the high-value and consumer-ready product trade.
Information compiled by USDA also shows that such countries are spending over $100 million just to promote sales of their products in the United States. In other words, they are spending more to promote their agricultural exports to the United States than the U.S. currently spends ($90 million) through MAP to promote American-grown and produced commodities worldwide! In FY 1999, the U.S. recorded its first agricultural trade deficit with the EU of $1 billion. In FY 2001, USDA reported that the trade deficit with the EU had grown to $1.6 billion.
Because market promotion is a permitted "green box" activity under World Trade Organization (WTO) rules, with no limit on public or producer funding, it is increasingly seen as a centerpiece of a winning strategy in the future trade battleground. Many competitor countries have announced ambitious trade goals and are shaping export programs to target promising growth markets and bring new companies into the export arena. European countries are expanding their promotional activities in Asia, Latin America, and Eastern Europe. Canada, Australia, New Zealand, and Brazil have also sharply bolstered their export promotion expenditures in recent years.
Again, this underscores the importance of USDA's export programs, especially the Market Access Program and Foreign Market Development Program. These programs are among the few tools specifically allowed under the Uruguay Round Agreement to help American agriculture and American workers remain competitive in a global marketplace still characterized by subsidized foreign competition. The over 70 U.S. agricultural groups that share in the costs of the MAP and FMD programs fully recognize the export benefits of market development activities. In fact, they have sharply increased their own contributions to both programs over the past decade while USDA funds have actually dropped. Since 1992, MAP participants have increased their contributions from 30 percent (30 cents for every dollar contributed from USDA) to almost 120 percent ($1.20 in industry funds for every USDA dollar). For FMD, the contribution rate has risen from 76 percent to the current level of 120 percent. By any measure, such programs have been tremendously successful and extremely cost-effective in helping maintain and expand U.S. agricultural exports, protect American jobs, and strengthen farm income.
As members of the Coalition to Promote U.S. Agricultural Exports, we appreciate very much this opportunity to share our views, and we look forward to working with you as you finalize the new Farm Bill.
Sincerely,
(See Below)
cc: House-Senate Conferees
** List of House-Senate Conferees*
Coalition to Promote U.S. Agricultural Exports
(Letter to House-Senate Conferees)
Alaska Seafood Marketing Institute
American Farm Bureau Federation
American Forest and Paper Association
American Meat Institute
American Peanut Council
American Quarter Horse Association
American Seed Trade Association
American Sheep Industry Association
American Soybean Association
Blue Diamond Growers
Calcot, Ltd.
California Asparagus Commission
California Canning Peach Association
California Cling Peach Board
California Dried Plum Board
California Fig Institute
California Kiwifruit Commission
California Pistachio Commission
California Strawberry Commission
California Tomato Commission
California Walnut Commission
CoBank
Diamond of California
Farmland Industries, Inc.
Florida Citrus Commission
Florida Citrus Mutual
Florida Citrus Packers Association
Florida Citrus Processors Association
Florida Department of Citrus
Food Export USA - Northeast
Ginseng Board of Wisconsin
Gulf Citrus Growers Association
Highlands County Citrus Growers Association, Inc.
Indian River Citrus League
Land O'Lakes, Inc.
Mid-America International Agri-Trade Council
Mohair Council of America
National Association of State Departments of Agriculture
National Barley Growers Association
National Cattlemen's Beef Association
National Chicken Council
National Corn Growers Association
National Cotton Council
National Council of Farmer Cooperatives
National Dry Bean Council
National Grain Sorghum Producers
National Grape Cooperative Association, Inc.
National Milk Producers Federation
National Pork Producers Council
National Potato Council
National Renderers Association
National Sunflower Association
National Turkey Federation
Northwest Horticultural Council
Ocean Spray Cranberries, Inc.
Peace River Valley Citrus Growers Association
Pet Food Institute
Produce Marketing Association
Rice Millers' Association
Southern U.S. Trade Association
Sunkist Growers
Sun Maid Growers of California
Sunsweet Growers, Inc.
The Catfish Institute
Tree Top, Inc.
United Egg Association
United Egg Producers
United Fresh Fruit and Vegetable Association
USA Dry Pea and Lentil Council
USA Poultry & Egg Export Council
U.S. Apple Association
U.S. Dairy Export Council
U.S. Hide, Skin & Leather Association
U.S. Livestock Genetics Export, Inc.
U.S. Rice Producers' Group
U.S. Wheat Associates
Valley Fig Growers
Vinifera Wine Growers Association
Wine Institute
Western Pistachio Association
Western U.S. Agricultural Trade Association
Wheat Export Trade Education Committee