Federal Bill Aims to Energize Agricultural Exports

Federal Bill Aims to Energize Agricultural Exports
The CREAATE Act would work to strengthen marketing efforts for American agricultural commodities entering international markets. Photo: U.S. Department of Agriculture.

In hopes of bolstering American agricultural exports, two U.S. Congressmen this month introduced a bill that would increase market promotion and the ability to compete in a global economy.

For Washington state’s agriculture industry, the change would strengthen already important international ties, bringing additional revenue and jobs to the local economy.

On May 3, U.S. Reps. Dan Newhouse of Washington (R-4) and Chellie Pingree of Maine (D-1) introduced H.R. 2321 which would dramatically increase the funding of two U.S. Department of Agriculture (USDA) promotion programs.

Promotion can play quite a role in the success of a commodity. For the Washington Apple Commission (WAC), promotions partially funded by the USDA resulted in $510.6 million in state export revenues from September 2014 to August 2015, which was 42.5 percent higher than without marketing. That is according to WAC data, which also found that just a $1 increase in marketing results in $4.11 in long-term return on investment.

WAC’s export promotions accounted for 4,367 jobs created between 2004 and 2012 and $176.3 million in employment income during that same period. Also, WAC projects that a 10-percent increase in marketing would increase exports by 0.283 percent.

“As a former state director of agriculture, I understand what it takes to market and sell American products to international buyers,” said Newhouse in a written statement. “Agriculture market development programs are critical tools to assist domestic farmers and agriculture producers compete in overseas markets, and I look forward to strengthening export efforts on behalf of farmers and agriculture.”

The Cultivating Revitalization by Expanding American Agricultural Trade and Exports (CREAATE) Act would double the annual federal funding for the USDA’s Market Access Program (MAP) to $400 million and increase funding for the Foreign Market Development Program (FMDP) by 66.7 percent – to  $69 million by FY 2023.

The USDA’s MAP allows agriculture stakeholders, including small businesses and agricultural trade associations, to apply for matching grants to expand international promotion activities such as market research or trade exhibits. General promotions require a minimum 10-percent match from participants, and brand-specific marketing necessitates a dollar-for-dollar match.

Also supportive of the success of the nation’s agricultural efforts, the department’s  FMDP “helps create, expand and maintain long-term export markets for U.S. agricultural products” by promoting American commodities overseas, according to the USDA website.

According to the bill’s text:

-Those programs have added $309.7 billion to the value of American agricultural exports from 1977 to 2014, or 15.3 percent in additional export revenue; and

-From 2002 to 2014, additional funds from those programs created 239,800 full- and part-time jobs across the U.S. economy.

Pingree also noted the importance of the two programs to bolster national farming endeavors.

“The Market Access Program and the Foreign Market Development Program at USDA have been extremely successful in helping farmers maintain export markets for products such as these,” she wrote. “Increased funding for these two programs would provide vital support to growers of these products and others that want to reach new markets abroad.”

However, MAP and FMDP have received static funding since 2006 and 2002, respectively. Doubling the funding of those programs would result in an average annual gain in agricultural exports from $3.4 to $4.5 billion, according to the bill’s text. Under a less than full employment scenario, the same increase would account for a $1.5-billion increase of average annual gains in gross domestic product, up from $4.5 billion.

Rebecca Lyons emphasized the importance these types of exports have to Washington state’s agricultural community and the regional economy. She is WAC’s international marketing director.

“The production of apples worldwide, and that includes Washington state and the U.S., is actually increasing and that means competition is increasing. For the health of our industry and particularly for these small farmers, it’s very important to be able to maintain and expand these opportunities and these programs as promotional assistance that looks to expand export markets is really critical in doing that and supporting them.”

“Any bill or any support from the federal side to increase in terms of expanding the role of the MAP program…is welcomed by the Washington apple industry because one-third of the total Washington apple crop is exported outside of the United States, so that’s a significant volume that needs to go into markets such as Canada, Mexico, Taiwan, China, and India,” she added.

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