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For more than 40 years, the Foreign Market Development Program (FMD) has successfully promoted the sale of high-volume bulk commodities such as wheat, corn, soybeans and others. The program is a public-private partnership in which the U.S. government provides cost-share assistance to farmers and ranchers to help maintain, develop, and expand export markets for U.S. agricultural products.
U.S. agricultural producers are represented in the 1998 program by 27 national agricultural associations, often called Cooperators, which conduct mid- to long-term market development activities overseas for U.S. agricultural products. These activities generally address long-term foreign import constraints such as infra-structural market impediments, limited processing capabilities and non-uniform codes and standards and are supported by a network of USDA/FAS and Cooperator offices overseas. Typically, these activities develop and expand markets by providing technical information or assistance to foreign importers, traders, wholesalers or those who influence the purchase, distribution and marketing of agricultural commodities.
For the 1998 FMD program, it is estimated that U.S. producers will contribute $39.5 million and the U.S. government will contribute $33.5 million. These figures clearly show that there is a serious commitment to the FMD program and U.S. agricultural products in the international marketplace on the part of U.S. producers. Each dollar contributed by the U.S. government is more than matched with $1.18 from private sources.
FMD activities and strategies generally complement at least one or more of the following overall Agency objectives: strategic outreach and market intelligence; market development and promotion; market access; price/credit risk assistance; and long term development. The FMD program is an excellent means of facilitating synergism between the government and private sector mission, program objectives and activities.
Sharing the overall goal of developing, maintaining and expanding U.S. agricultural exports, the following are a few examples of the interrelationship between the FMD program, private sector efforts, and other Agency programs:
A DYNAMIC PARTNERSHIP OPENS RUSSIA FOR U.S. COTTON
The success of the FAS/Cotton Council International (CCI) partnership in market development was underscored by sales totaling almost $30 million of U.S. cotton to Russia under the GSM-102 Export Credit Guarantee Program. This was the second year of sales to Russia and an increase of 300 percent from FY1996 levels. CCI's activities to develop the GSM-102 market for U.S. cotton in Russia have been funded under the FMD program.
U.S. WOOD PRODUCTS ACHIEVE GRADE STAMP RECOGNITION IN JAPAN
The U.S. lumber industry credits the FMD program with helping them achieve the recognition of the U.S. grade mark as equivalent to the Japan Agricultural Standard. This recognition eliminated a long-standing non-tariff barrier that required the costly re-grading of U.S. graded lumber for construction. The number of U.S. mills that can now export directly to Japan is expected to increase from 80 to over 1,000.
DEVELOPING THE HARDWOOD PRODUCTS MARKET IN THE UNITED KINGDOM
Aided by FMD funded activities, U.K. imports of U.S. hardwood lumber are expected to reach $88 million for calendar year 1997, 30 percent above 1996 levels. U.S. hardwoods have been steadily gaining market share and represent approximately 19 percent of U.K. hardwood lumber imports, up from only 10 percent in 1987. The American Hardwood Export Council, in cooperation with FAS, has successfully educated architects, builders, and specifiers on the quality and sustain ability of American hardwoods, prompting British publications to remark that U.S. species enjoy a much higher profile in Great Britain than even the local species.
WHEAT MARKETING EFFORTS PAY OFF IN VIETNAM
Vietnam's August 1997 purchase of 10,000 metric tons of U.S. wheat, its first in over 20 years, is the initial result of several years of joint USDA/U.S. Wheat Associates (USWA) efforts to help Vietnam's milling sector recapture its flour market from subsidized flour imports. This is a precursor to what could become an annual wheat import market worth over $100 million dollars to the U.S. economy.
U.S. CATTLE HIDE EXPORTS TO CHINA INCREASED TO $89.4 MILLION IN 1996
FMD funded marketing programs in China identified potential major customers and types of products China would be most likely to import. This information, coupled with participation in the Hong Kong Trade Fair, enabled U.S. exporters to meet face-to-face with potential customers and establish trade relationships that increased sales from $37.9 million in FY1994 to $89.4 million in FY1996. Current export data indicate that sales of cattle hides to China will exceed $100 million in FY1997.
U. S. LIVESTOCK AND GENETICS EXPORTS, INC. SETS WORLD RECORD FOR HIGHEST AVERAGE SALES OF AMERICAN JERSEY CATTLE
An FMD funded American Jersey cattle seminar in Brazil generated the highest sale average for any Jersey sale in history, for anywhere in the world; 38 lots in the sale averaged $8,811.25. A program investment of $5,250 returned $334,839 in Jersey cattle sales.
COOPERATIVE EFFORTS IN THAILAND EXPAND U.S. EXPORT MARKET FOR SOYBEAN MEAL
Technical directors from American Soybean Associations' Southeast Asia and China regional offices, funded under the FMD program, joined forces to conduct three forums highlighting cost-saving benefits of dehulled soybean meal (SBM) used in swine and poultry feed formulations. One forum was held exclusively for the largest single feed producer and second largest poultry producer in the world. Other programs were held for Thai feed industry nutritionists and in conjunction with the VIV Regional Feed Industry Trade show. Data presented from field studies demonstrated U.S. dehulled SBM to be economically viable even when priced $40 per metric tons more than non-dehulled meals from Brazil and/or India. This program, follow-up and other efforts have nearly doubled the export market for U.S. soybean meal in Thailand in a single year - 79,000 metric tons in FY1996 to 151.4 metric tons in FY1997.
Since its inception in 1985, the Market Access Program (MAP) and its predecessors, the Targeted Export Assistance Program and the Market Promotion Program, have provided the impetus to nearly 800 U.S. companies, cooperatives, and trade associations to promote their products overseas. In that period, total U.S. agricultural exports have more than doubled, from $26.3 billion -- the first year of the program -- to a projected $60 billion in 1996. During those same years, exports of U.S. high-value products have more than tripled, and now account for 34 percent of all U.S. agricultural exports, up from 12 percent in 1980. In the meantime, the U.S. share of world trade in these products has risen from 10 percent to 17 percent.
For the 1997 MAP program, it is estimated that U.S. producers will contribute $67.8 million for generic promotion activities and $33.4 million for branded promotion activities. The U.S. government will contribute $90 million. These figures show a serious commitment to the MAP program on the part of U.S. producers. The MAP program mandates a 10 percent minimum matching contribution for generic promotion and a one-to-one matching contribution minimum for branded promotion programs.
MAP activities and strategies generally complement at least one or more of the following overall Agency objectives: strategic outreach and market intelligence; market development and promotion; market access; price/credit risk assistance; and long term development. The MAP program is an excellent means of facilitating synergism between the government and private sector mission, program objectives and activities.
In 1993, legislation was passed that required the Agency to give priority in the allocation of its funds to small firms. Since that time, the emphasis continues to shift toward greater support of small participants. These smaller entities are more dependent on incentives, like MAP, to make the risky transition from domestic sales to selling in the international marketplace.
MAP support helps increase exports and jobs through-out the U.S. economy. For example, food companies participating in the Mid-America International Agri-Trade Council's (MIATCO) Branded Program documented a 89 percent (or $110 million) increase in reported sales. This translates into nearly 2,000 U.S. jobs (based on USDA's estimate of 17,000 jobs for every $1 billion in exports).
The following testimonials and success stories serve to illustrate how the MAP has helped generate increases in exports of U.S. agricultural products:
U.S. FARM-RAISED CATFISH
ESTABLISHED IN GERMANY
MAP is the catalyst which helped establish the U.S. catfish industry's
first major export market--Germany. Known as the toughest fish market in the world, this
"lowly" fish has captured the discriminating German buyers with its mild taste,
virtually no bones and ease of preparation. Impressed by the quality of the farms and
processing operations, to date five import arrangements have been set up and frozen
catfish fillets flow to Germany at the rate of 4 to 5 containers a month. Consistent
marketing and trade servicing reinforced with positive messages of high-quality,
farm-raised, grain fed, and natural process, has resulted in an increase in exports from a
lowly 18 metric tons in 1991 to 237,437 metric tons worth $1.86 million in 1996. The
German trade states that the market penetration for U.S. farm- raised catfish has been one
of the fastest for a fish product. In a part of the U.S. where unemployment is high and
income low, this industry employs over 8,000 individuals on a direct basis and an
additional 4,000 jobs in related industries such as feed mills, trucking equipment
suppliers, packaging companies, steamship and airlines for a total of 12,000 jobs in the
Delta area of the mighty Mississippi encompassing the states of Alabama, Arkansas,
Louisiana and Mississippi. Catfish leads the way in providing education for low income
workers by participating in the Welfare to Work program which assists individuals in
graduating from the welfare rolls.
HORTICULTURE TRADE MISSION A SUCCESS
All five participating companies, Chesapeake Plant Traders/Whitney Beers, Inc. (MD),
Classic Ground Covers, Inc. (GA), Wilbro, Inc. (SC), Cherry Lake Farm (FL), and Cam Too
Camellia Nursery, Inc. (NC), deemed the Southern U.S. Trade Association (SUSTA)
Horticulture Trade Mission an unqualified success. The group generated a total of more
than 300 trade leads with an average of 48% of these leads considered solid. The mission
led directly to over $270,000 in immediate "on-site" sales. Furthermore,
participants projected sales of $687,000 over the next twelve months as a result of their
participation. SUSTA organized and executed this mission with a MAP budget of only
$20,000.
CALIFORNIA TABLE GRAPES SET ANOTHER EXPORT RECORD
California's 700+ table grape growers employ well over 100,000 people in the growing,
harvesting and packaging of fresh table grapes. The share of the crop which goes into
exports, boosted directly by the MAP program, has grown from 8% to 28% since 1983. 1996/97
exports are expected to hit a record $284 million.
U.S. POMEGRANATES BECOME THE APPLE OF JAPAN'S EYE
Exports of California pomegranates set new records in 1996. While U.S. Census does not
record pomegranate exports, individual county phytocertificates indicate export
destination. Exports to Japan from the largest pomegranate producer in Fresno County, CA.,
increased 22% in 1996. A large portion of the credit for this Japanese volume increase can
be attributed to the MAP funded promotion plan.
WASHINGTON APPLE SUCCESS IN INDONESIA HIGHLIGHTS BENEFITS OF MAP SUPPORT
The Washington apple industry credits the Market Access Program (MAP) with fostering
its dramatic apple export expansion to Indonesia. During the 1990 marketing year, less
than $800,000 of apples were exported. Sales have expanded in each year since that time,
culminating in exports totaling $34 million for the recent (1995/96) marketing year. For
the first six months of the 1996/97 marketing year, exports reached $16.4 million, up 10
percent over the same period last year.
MAP FUNDS HELP QUINTUPLE U.S. PEAR EXPORTS
With MAP assistance, export sales reached an all-time record of $87 million in the 1995/96 season, an increase of 18 percent over the previous season. The top markets are Canada, Mexico, Brazil, Taiwan, Sweden, and Russia. Last seasons exports supported 1,400 jobs and contributed an additional $133 million to the U.S. economy.
CERTIFIED ANGUS BEEF (CAB) INTRODUCES MEAT CUTS OVERSEAS
As part of its MAP program, the U.S. Meat Export Federation (USMEF) offers a branded
products promotion program to help private companies and cooperatives promote their own
labels in foreign countries. USMEF's branded product promotion program has been
instrumental in helping Certified Angus Beef (CAB), a small Ohio association, introduce
new-to-market meat cuts overseas. CAB has participated in USMEF's MAP program since 1991
targeting top hotels and restaurants in Asia and the Caribbean via seminars and menu
promotions. The company's sales have risen from 6.2 million pounds in 1990 to 37.3 million
in 1996 with CAB members throughout the country benefiting from export sales. CAB received
a total of $53,309 in MAP funding from 1991-96.
U. S. LIVESTOCK AND GENETICS EXPORTS, INC. OPENS KOREAN MARKET TO U.S. THOROUGHBRED HORSES
U.S. Livestock and Genetics Exports, Inc., and the Maryland State Dept of Agriculture,
with the help of the MAP program sponsored seminars, helped open the Korean market to U.S.
thoroughbred horses. An initial order of 87 horses was successfully delivered and an
additional 130 thoroughbreds have been purchased. According to the Maryland State
Department of Agriculture: "The total economic impact from the direct purchase of
horses as well as spin-offs including everything from feed and equipment purchases to
hotel rooms is expected to approach $3 million by the end of this year."
U.S. WOOL EXPORTS HELP SUSTAIN TEXTILE EMPLOYMENT
Since 1989, the American Sheep Industry Association has used FAS market development funds in conjunction with industry funds to mount a focused campaign to develop markets for U.S. wool overseas. The $100 million in export of U.S. raw/scoured wool, wool top, wool yarn, and fabric represents an increase of 250 percent in export-related employment since 1990. Wool processing and textile plants have been the mainstay of numerous small towns in the United States, especially in Texas, South Carolina and throughout New England. U.S. wool producers are located throughout 43 states, but primarily in Texas, Iowa, California, Ohio, Illinois, and Minnesota.
NEW U.S. POULTRY OFFICE IN CHINA PAYS EXPORT DIVIDENDS
The USA Poultry and Egg Export Council has had an office in Hong Kong, covering southern China, for over 10 years. USAPEEC' s new office in Shanghai, opened in June 1996, has expanded the U.S. poultry industry's base in China to the central and northern parts of the country. Broader representation plus additional activities such as restaurant promotions, trade advertising, trade shows, and trade educational seminars, were instrumental in expanding U.S. poultry exports directly into China from about $34 million in 1995 to roughly $60 million.
CALICO COTTAGE CANDIES, INC. TESTIFIES TO PROGRAM SUCCESS
In a testimonial Calico Cottage Candies wrote: "No doubt about it, the MAP program provided the "push" we needed to jump start our non-existent export program. Canada was our first export market and within about 4 years, we were able to succeed in that market to the extent that it now contributes about 12% of our total sales with a 26% increase over the last two years." Calico Cottage added, "New Zealand is now contributing about 1.3% of our business and we fully expect Australia, which only started in 1995, to contribute about 6-7% in a few more years."
ASB GROUP INTERNATIONAL DRAMATICALLY BOOST SNACK FOOD SALES
ASB Group International reported that MAP participation boosted its snack food sales in the U.K. dramatically. ASB forecast 1997 sales at $2.2 million รน nearly a ten-fold increase from 1993 (their first year promoting in the U.K.).
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