Farm Bill Primer: Trade and Export Promotion Programs

Farm Bill Primer: Trade and Export Promotion Programs

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April 25, 2017
Farm Bill Primer: Trade and Export Promotion Programs
Agricultural exports are important to both farmers and the
The 2014 farm bill addresses two main types of agricultural
U.S. economy. With the productivity of U.S. agriculture
trade and export promotion programs:
growing faster than domestic demand, farmers and
1. Export market development programs. The
agriculturally oriented firms rely heavily on export markets
Foreign Agricultural Service (FAS) of USDA
to sustain prices and revenue. Accordingly, the 2014 farm
administers five market development programs
bill (Agricultural Act of 2014, P.L. 113-79) authorizes a
aimed at assisting U.S. industry efforts to build,
number of programs to promote farm exports.
maintain, and expand overseas markets for U.S.
agricultural products. These include the Market
Agricultural exports have exceeded agricultural imports in
Access Program (MAP), the Foreign Market
every year since the 1960s. The value of agricultural
Development Program (FMDP), the Emerging
exports exceeded imports by a wide margin during the
Markets Program (EMP), the Quality Samples
2008-2014 time frame, peaking at $43 billion in 2014.
Program (QSP), and the Technical Assistance for
Since then the margin of exports over imports has narrowed
Specialty Crops Program (TASC). In general,
sharply (Figure 1). For 2016, the U.S. Department of
these programs provide matching funds to U.S.
Agriculture (USDA) reports that the U.S. agricultural trade
organizations to conduct a wide range of activities,
surplus declined to $17 billion.
including market research, consumer promotion,
trade servicing, capacity building, and market
Figure 1. Value of U.S. Agricultural Trade
access support.
2. Export credit guarantee programs. FAS
administers the Export Credit Guarantee Program
(GSM-102) and the Facility Guarantee Program
(FGP). Under these programs, USDA’s
Commodity Credit Corporation (CCC) provides
payment guarantees on commercial financing to
facilitate U.S. agricultural exports. GSM-102
guarantees repayment of commercial financing by
approved foreign banks, mainly of developing
countries, for up to two years for the purchase of
U.S. farm and food products. FGP guarantees
financing of goods and services exported from the
United States to improve or establish agriculture-

related facilities in emerging markets.
Source: CRS from USDA data.
The 2014 farm bill extended all of these programs through
FY2018. These programs are generally funded using
Bulk commodities—wheat, rice, coarse grains, oilseeds,
mandatory monies through the CCC and therefore are not
cotton, and tobacco—are the leading U.S. agricultural
subject to annual appropriations. Annual funding for market
exports. USDA reports that exports of consumer-oriented
development programs as authorized in the 2014 farm bill
products—such as dairy products, meats, poultry, live
includes $200 million for MAP, $34.5 million for the
animals, oilseed meals, vegetable oils, fruits, vegetables,
FMDP, $10 million for the EMP, and $9 million for TASC.
and beverages—have also shown steady growth. Leading
QSP is authorized under the CCC Charter Act, not the farm
export markets include China, Canada, Mexico, and the
bill, and is funded through CCC’s borrowing authority.
European Union. Together these markets account for about
one-half of the total value of U.S. agricultural exports.
The 2014 farm bill, however, repealed the Dairy Export
Trade Provisions in the Farm Bill
Incentive Program, thereby eliminating the use of direct
export subsidies for U.S. agricultural products. The
USDA administers a number of programs aimed at
program had been largely inactive for several years.
developing overseas markets for U.S. agricultural products
and facilitating exports. The “Trade” title of the 2014 farm
While the 2014 farm bill extended the aforementioned trade
bill authorized, amended, and repealed existing trade
and export promotion programs largely intact, it did make
programs. (The farm bill’s “Trade” title also addresses
several changes. To comply with a World Trade
programs and issues concerning U.S. international food aid,
Organization decision in a cotton case won by Brazil,
which are not addressed in this report. However, a summary
Congress made changes to GSM-102, including:
of the title’s international aid and agricultural trade
programs is shown in the text box on the next page.)
 shortening the loan guarantee period from three years
to two years,
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Farm Bill Primer: Trade and Export Promotion Programs
 repealing a requirement that USDA maximize the
revisit the unfinished business of its directive to reorganize
amount of credit guarantees available each year,
the international trade functions of USDA under a new
 removing a provision that restricted USDA from
Under Secretary position with a unique focus on promoting
adjusting program fees to fully cover the cost of
U.S. farm and food exports. Other trade-related issues that
operating the program, and
are outside the context of the farm bill—but may arise in
 broadening the scope of TASC to fund projects that
the debate around the trade title in view of lower farm
address technical barriers to trade beyond sanitary and
export sales in recent years—may include various
phytosanitary (SPS) measures.
multilateral and bilateral trade negotiations that are
generally supported by numerous U.S. agricultural groups.
At a more strategic level, the 2014 farm bill directed USDA
to consult with House and Senate congressional committees

and propose a plan to reorganize USDA’s international
trade functions. The law requires that the plan establish an
Selected “Trade” (Title III) Provisions in
Under Secretary for Trade and Foreign Agricultural Affairs
the 2014 Farm Bill (P.L. 113-79)
within USDA to oversee trade-related SPS issues affecting
Agricultural export promotion provisions
agriculture, as well as non-tariff trade barriers. At a hearing

Export Credit Guarantee Program. Authorizes the
of the Senate Agriculture Committee in September 2016,
CCC to guarantee the credit made available to finance
former USDA Secretary Vilsack said he intended to lay the
agricultural exports (§3101).
groundwork for the next Administration to pursue this task.

To date, USDA has not transmitted a reorganization plan to

Market Access Program. Provides CCC funding to
eligible trade organizations to develop export markets
Congress, and the Under Secretary position has not been
for U.S. agricultural commodities (generic and branded)
established, even though many U.S. farm groups continue
(§3102).
to push for the creation of this position within USDA. For
example, a February 2017 letter from the American Farm

Foreign Market Development Cooperator
Bureau Federation and other farm groups expressed support
Program. Provides for the maintenance and
for the 2014 farm bill provision and for establishing the
development of foreign markets for bulk or generic U.S.
Under Secretary position at USDA.
farm commodities (§3103).

Issues and Options

Emerging Markets Program. Promotes U.S.
agricultural exports in emerging markets (§3203).
Federal support for agricultural export promotion invariably

Technical Assistance for Specialty Crops.
raises questions about the appropriateness of government
Authorizes USDA to address barriers prohibiting or
support for private sector export promotion and the
threatening exports of U.S. specialty crops (§3205).
effectiveness and impact of these programs.
International food aid provisions
During the run-up to the 2014 farm bill, a number of deficit
reduction proposals targeted MAP for cuts or elimination.

Food for Peace Act, Title II. Provides emergency and
Historically, many in Congress have been highly supportive
nonemergency international food aid (§§3001-3015).
of export promotion programs, citing the benefits to U.S.

Food for Progress Act of 1985. Provides
agricultural industries through export market development
commodities to support countries that have made
abroad. At the same time, some in Congress have expressed
commitments to expand free enterprise in their
concerns about whether the federal government should play
agricultural economies (§3201).
an active role in helping agribusiness entities market their

Bill Emerson Humanitarian Trust. Provides a
products overseas. Some argue that these programs are
reserve of commodities and cash to meet emergency
forms of corporate welfare in that they fund activities that
food needs in developing countries (§3202).
private firms could and would otherwise fund for

McGovern-Dole International Food for Education
themselves. Other critics argue that the principal
and Child Nutrition Program. Provides U.S.
beneficiaries are foreign consumers and that funds could be
agricultural commodities, financial and technical
better spent, for example, instructing U.S. firms on how to
assistance for education, and child nutrition programs in
export and on overcoming trade barriers.
foreign countries (§3204).
Program supporters emphasize that foreign competitors,

Local and Regional Food Aid Procurement Pilot
especially EU member countries, also spend money on
Projects. Establishes a pilot program for local and
market promotion and that U.S. marketing programs help
regional purchase of commodities for famine prevention
keep U.S. products competitive in foreign markets.
(§3207).
Although the program has its detractors, MAP was retained
intact in the 2014 farm bill.

Questions about whether export promotion programs are as
effective as they could be, and whether new approaches to
facilitating and promoting U.S. farm exports may be needed
(or both), could be topics of discussion in a new farm bill.
The eligibility of certain types of organizations and
producer groups and the levels of funding for various
programs are likely topics of debate as policymakers
consider farm bill trade programs. Congress could also
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Farm Bill Primer: Trade and Export Promotion Programs

Related CRS Reports
Renée Johnson, Specialist in Agricultural Policy

CRS Report R43696, Agricultural Exports and 2014 Farm
Mark A. McMinimy, Section Research Manager
Bill Programs: Background and Current Issues
IF10637

CRS Report R43817, 2014 Farm Bill Provisions and WTO
Compliance

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