ASA's Testimony on the Effectiveness of Ag Export Promotion Programs
Monday, April 11th, 2011
American Soybean Association (ASA) Chief Executive Officer Stephen Censky testified today before the House Agriculture Subcommittee on Rural Development, Research, Biotechnology, and Foreign Agriculture, which is reviewing export promotion programs and their effectiveness in expanding exports of U.S. agricultural products.
Soybeans and soybean products are our country's number one export commodity. Last year, the United States exported a record-setting $23 billion in soybeans, soybean oil and soybean meal. This impressive export growth could not have been achieved without the unique government-industry partnership that characterizes the Foreign Market Development (FMD) "Cooperator" Program and the Market Access Program administered by the U.S. Department of Agriculture's Foreign Agricultural Service (FAS).
"These programs have been tremendously successful and extremely cost-effective in helping expand U.S. exports of soybeans and other agricultural commodities, including corn, wheat, rice, cotton, livestock and meat products, dairy, forest products, peanuts, seafood, and a host of horticultural products," Censky testified.
Censky was asked by the Subcommittee to focus on the role of the FMD Program in expanding U.S. agricultural exports. The FMD program is a public-private partnership program dedicated to the long-term development of foreign markets for U.S. agricultural exports. ASA's FMD funding is leveraged on a 2 to 1 basis with funding for international marketing provided soybean farmers themselves under the soybean checkoff and by contributions from exporters.
"FMD is cost-effective," Censky said. "According to a recent comprehensive study conducted by Global Insight for FAS, the multi-year impact of the increase in market development expenditures by both industry and government is equal to $35 in agricultural export gains for each dollar spent."
ASA became a Cooperator under the FMD program in 1956, when it opened a foreign market development program in Tokyo, Japan. At that time, Japan was importing only small quantities U.S. soybeans. Today, Japan is a top market for U.S. soybean products, surpassed only by China and Mexico. U.S. exports of soybeans to Japan are valued at $1.3 billion.
While Japan represents ASA's first success story, China is perhaps its most impressive. ASA opened an office in Beijing in 1982. Through a long term and comprehensive program of demonstrating the value of soy-based feeds, ASA helped build demand for soybeans. The value of U.S. soybean exports to China has grown 26 fold since 1996, from $414 million to over $11 billion in 2010.
"The FMD program helps U.S. agriculture overcome the effects of foreign trade practices," Censky reported. "As just one example of the competition we face, the European Union recently announced that it will spend the equivalent of $1.0 billion this year on promoting agricultural exports, and that it plans to increase this amount on an annual basis. By comparison, the U.S. will spend $234.5 million on FMD and MAP this year.
The international marketing activities for the U.S. soybean industry are implemented by the U.S. Soybean Export Council. These activities to expand international markets for U.S. soybeans and products are made possible through ASA's investment of cost-share funding provided by FAS, support from cooperating industry, and by producer checkoff dollars invested by the United Soybean Board and various State Soybean Councils.