Ag Informer – Imports Boosted by $9.6 Billion Annually

Source: U.S. Grains Council news release

Programs to help U.S. farmers build markets overseas boosted agricultural exports by an average of $9.6 billion annually from 1977 to 2019, an annual lift of 13.7% in export revenues and returning $24.5 for every dollar invested.

Those are the key conclusions from a new study prepared to evaluate the impact of programs administered by the U.S. Department of Agriculture’s Foreign Agricultural Service (USDA’s FAS), including the Market Access Program (MAP) and Foreign Market Development (FMD) program.

The U.S. Grains Council (USGC), the organization that builds markets overseas for feed grains and ethanol, led the study’s preparation on behalf of FAS and the cooperator community.

“We were glad to participate in this effort to demonstrate the long-term impact of the programs that help our members expand markets and our customers build their operations and further serve their local consumers,” said Ryan LeGrand, USGC president and CEO. “We know from our history that our work helps, as our mission says, improve lives. This study helps us put numbers to those outcomes for our organization and our whole sector within the agriculture industry.”

Developed by IHS Markit in cooperation with Dr. Gary Williams and Dr. Oral Capps at Texas A&M University, both experts on evaluating the economic performance of trade promotion programs, the study updated a 2016 edition also evaluating MAP and FMD, which are currently authorized by the 2018 Farm Bill. The new study also took a first look at the impact of investments through the Agricultural Trade Promotion (ATP) program.

The study’s results supported the conclusions of prior studies of USDA export market development programs, finding they are “highly effective at generating an extremely high return on investment and account for a high percentage of the level of U.S. agricultural exports.”

It reported that market development programs effectively leveraged cooperator and industry contributions, averaging between 70-77 percent of expenditures from 2013 to 2019, valued at an estimated annual average of $567 million.

Using econometric models to examine the impact of market development programs on bulk/intermediate and high-value commodity exports – including seafood, forest products and ethanol for the first time – the research generated results that were then used to assess the impact on the general economy.

Though not strictly comparable, reported results were similar and consistent to prior studies conducted since 2006 that suggested the program investments are highly effective.

To read the entire report click here.


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