Ag Policy Blog

U.S. agriculture producers should continue to develop ways of staying competitive in international markets or watch the rest of the world pass them by, according to a new study that looked at who U.S. farmers are competing against in international markets.

The USDA Foreign Agricultural Service study conducted by Agralytica Consulting on behalf of several U.S. agri-food export market development organizations including U.S. Wheat Associates, examines the central government programs of 12 countries and the European Union.

The study found that together in 2011, the 12 countries and the EU central government spent an estimated $1.8 billion. That included $700 million in public funds and $1.1 billion in private funds, on export promotion for agri-food products.

In the U.S. in 2011, the U.S. 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 study said.

With additional public investment by governments in France, Italy, Spain and The Netherlands the total investment was $460 million.

"The research indicates that promotion funds are budgeted to increase significantly in the EU 2014 to 2020 budget," the study said.

In addition, the study found that trade shows are "universally recognized as effective and essential activities requiring government support."

Those nations also believe public support for small- and medium-sized enterprises are important, and that trade missions are viewed as effective and "used by most of our competitors."

The study said the other nations have increased their focus on market access.

"In general, monitoring trade policies and securing market access are seen as essential components of market development," the study said.

"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."

Shannon Schlecht, vice president of policy at U.S. Wheat Associates, said in a statement that the study shows the U.S. should step up its efforts to develop export markets.

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

The study said the U.S. system in place to promote export markets is generally strong. However, the study said the "U.S. system is based upon annual budgets that are increasingly disrupted due to authorization and apportionment delays, undermining planning and implementation.

"Annual budgets do not offer the security of multi-year funding that some other countries provide to their export oriented industry organizations. This inevitably focuses attention on shorter-term ambitions.

"The annual procedure for applying for government funding is resource intensive and time-consuming, both for the applicant and for the USDA/FAS. This may be particularly daunting to smaller export market development organizations with limited staff."

The summary report is available at http://tinyurl.com/….

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