Public Policy on Program Evaluation and Disclosure of Program Expenditures

About $1 billion is diverted each year from the retail to farm income stream to support commodity promotion programs. Since this is not a trivial amount, this immediately raises a basic question: Does commodity promotion represent the best use of the funds from that income stream? Would farmers, consumers and/or society be better off if that money were invested in other ways, e.g., technology to further reduce production and distribution costs or improve quality? It is hard to answer that question without sound economic analysis. In addition, up to $200 million of federal funds are invested in export promotion programs each year. Some state governments also fund export promotion programs. Is this the best use of taxpayer money? Given the substantial level of investment in commodity promotion, we advocate in this paper public intervention in the economic evaluation of domestic promotion and foreign market development programs. The purpose of the intervention would be to make sure that appropriate economic analyses are conducted to determine whether the programs satisfy the public interest. First, we will make the case for economic analysis and then the case for an appropriate amount of government intervention in economic evaluation.