From U.S. Wheat Associates
The results of an independent study released last week confirm that USDA’s overall market development partnership with industry has added billions of dollars in returns to U.S. farmers and ranchers. This study closely follows the results of a recent study commissioned by U.S. Wheat Associates (USW) showing that wheat export promotion yields profitable returns to the U.S. economy and is a catalyst for building economic capacity overseas.
USDA conducted the study to evaluate the effects of the Market Access Program (MAP) and the Foreign Market Development Program (FMD) administered by USDA’s Foreign Agricultural Service (FAS). It updates a larger study conducted in 2006 and focuses on the period from 2002 through 2009. By 2009, the report concluded, increased market development spending since 2002 increased U.S. export market share by 1.3 percent and the annual value of U.S. agricultural exports by US$6.1 billion.
Citing the President’s National Export Initiative in announcing the new study results, Agriculture Secretary Tom Vilsack said USDA is working aggressively to increase exports that benefit farmers, ranchers, and the entire U.S. economy. “Each $1 billion in exports supports 8,000 to 9,000 jobs at home,” he said.
The USDA study results are consistent with the conclusions of an economic analysis of wheat export promotion released in January 2010. That study showed U.S. wheat producers received $23 in net revenue for every $1 they invested in export promotion between 2000 and 2007. One of the econometric models used in the study also showed that the entire wheat industry received an average of $115 in gross revenue for every dollar invested by producers and FAS.
The benefits of export market development extend beyond U.S. shores, however. Nigerian flour millers recently told U.S. government officials how wheat export promotion is helping build economic capacity in their country. Kabiru Isyaku Rabiu, Group Executive Director for Nigerian milling company BUA Group, said trade promotion clearly works.
“Nigeria today has a milling capacity of 6 million [metric] tons, and we are doing 3.5 million at most,” Mr. Rabiu said. “MAP and other programs provide training for our employees and if we can do more together, the potential for significant growth is there.”
Folarinmi Odunayo, CEO of Nigeria’s Honeywell Flour Mills, said that USW gave the milling industry the technical knowledge to build new markets for wheat-based foods.
“For example, we now provide baking training to our customers,” he said. “And all that has been possible because U.S. Wheat Associates has always been ready to fund these programs.”