In a January 8th release, the USDA Foreign Agricultural Service (FAS) announced $203 million in grants to seventy organizations to expand exports of agricultural products under the Market Access Program (MAP) and the Foreign Market Development (FMD) Program.
FAS will provide $174 million for FY 2024 to approximately seventy nonprofit organizations and cooperatives. Funding will be used to promote fruit, vegetables, nuts and consumer-related items. Under the FMD Program, $27 million or 13 percent of the total will be assigned to twenty trade organizations, presumably including USAPEEC, focusing on promotion of commodities.
Daniel B. Whitley, administrator of the FAS noted, “For each dollar invested in export market development U.S. agricultural exports have increased by more than $24.” The press release notes that both the MAP and FMD Programs returned $2.50 for every dollar in federal funding. It is difficult to see how these two programs can therefore contribute to the $24 claimed for each dollar of market development as worded in the second paragraph of the release, even with matching funds. USDA should provide more transparency and an explanation of how expenditure on export promotion achieves such a high claimed numerical return.
With respect to undifferentiated commodities such as corn and soybeans, importers base their decisions on landed price and availability. Purchase decisions are determined by need, the balance between supply and demand and obviously are influenced by shipping costs as determined by rates and geopolitical considerations.
Christmas is now over, and January is not usually a season for giving. USDA is however intent on disbursing as much funding as possible to cooperatives and non-profits while it is still able to do so, hence the disproportionate allocation of funding.