U.S. Department of Agriculture: Improvements Needed in Market Promotion Program

GAO discussed the Department of Agriculture's Market Promotion Program (MPP). GAO noted that: (1) MPP was created to encourage U.S. agricultural exports, focusing on high-value products, processed products, and supporting products adversely affected by unfair foreign trade practices; (2) between 1986 and 1993, MPP funding totalled more than $1.25 billion; (3) about 65 non-profit associations are involved in MPP activities through their market promotion programs or act as intermediaries that pass funds to private sector companies; (4) generic product programs comprised 60 percent of MPP activities, while 40 percent of MPP promotions focused on brand-name promotions; (5) the Foreign Agricultural Service (FAS) lacked criteria to ensure that program funds are supporting additional promotional activities, determine program participation duration, and evaluate under which circumstances beneficiaries should graduate from the program; (6) FAS has not addressed foreign company participation and the desired distribution of program funds between firms of various sizes, and lacked data to adequately apply criteria for allocating program funds; and (7) FAS should not conclude that recent export increases were a direct result of market promotion programs, since there was a lack of evidence linking increased exports to program-funded promotion activities.