US Export Market Development Programs

The production of US agriculture has been growing faster than the domestic food and fiber demand, at least until the ethanol mandate took hold. Considering that over 95% of the world’s customers lie outside the USA, US farmers and agricultural firms have relied heavily on export markets to sustain revenues and prices. However, entering new export markets and maintaining existing markets may require market development investments and promotion costs from both the public and private sectors. To create, expand, and maintain export markets for US agricultural products, the USDA’s Foreign Agricultural Service has partnered with nonprofit trade associations representing commodity or regional interests. Despite its projected benefits, the US government’s financial involvement in the promotion of agricultural exports has been an issue of growing debate. For example, some of these programs have been highly criticized as promoting corporate welfare. Nevertheless, most of the published studies evaluating export promotion programs have shown that these programs have been effective in increasing market shares and export revenues. Additionally, many small to medium sized agricultural industries find these programs valuable, as they might not have enough knowledge about export markets or enough funds to effectively promote their products. In this chapter, a critical overview of the US export market development programs is provided.