Cheers from the National Corn Growers Association for new trade legislation introduced last week in D.C. The CREAATE bill would gradually increase investment in the Market Access Program (MAP) and Foreign Market Development (FMD) programs, ultimately improving the competitiveness of the U.S. agricultural community in the global economy.
H.R. 2321, the Cultivating Revitalization by Expanding American Agricultural Trade and Exports (CREAATE) Act, was introduced by Reps. Dan Newhouse (R-Washington) and Chellie Pingree (D-Maine) and is co-sponsored by Reps. Cheri Bustos (D-Illinois), Roger Marshall (R-Kansas), Jimmy Panetta (D-California), and Thomas Rooney (R-Florida).
The MAP and FMD programs match dollars contributed by U.S. farmers and ranchers for programs that create, expand, and maintain access to foreign markets. Independent evaluations have shown that MAP and FMD and the activities they help fund are consistently effective at increasing demand overseas and raising farm income at home. A 2016 study commissioned by USDA’s Foreign Agricultural Service (FAS) found that from 1977 to 2014, MAP and FMD accounted for 15 percent of all U.S. ag export revenue.
“As a former state director of agriculture, I understand what it takes to market and sell American products to international buyers,” said Rep. Newhouse. “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.”
“At a time when trade is top of mind to many U.S. farmers, the CREAATE Act shows that the U.S. is serious about promoting high-value corn and corn products around the world,” said NCGA Director of Public Policy Lesly McNitt. “With an average return on investment of $28 for every dollar spent, MAP and FMD represent a public-private partnership that we can all be proud of.”
Yet investment in these programs has failed to keep pace in an increasingly competitive global economy. Statutory funding of $200 million per year for MAP and $34.5 million per year for FMD has been static since 2006 and 2002, respectively. Over the past 15 years, these programs have lost more than 40 percent of their value due to inflation, sequestration, and administrative costs.
Meanwhile, America’s competitors have ramped up their own export promotion. For example, the European Union spends more than $255 million per year just to promote wine exports, more than the U.S. spends for the promotion of all commodities through MAP and FMD.
“Programs like MAP and FMD help America’s farmers and ranchers compete for the world’s business, and ultimately improves their bottom lines. In a challenging farm economy, it’s important to invest in these programs so that we can maintain the markets we have, and expand into new ones,” said McNitt.
The CREAATE Act would gradually increase annual funding for these programs to $400 million for MAP and $69 million for FMD by FY2023. A separate econometric study by Informa Economics IEG found that this funding increase, combined with an increase in producer contributions, would increase average annual agricultural export value by between $3-4 billion and create nearly 85,000 new jobs.