AGRICULTURAL 

TRADE

USDA Is Monitoring 

Market Development 

Programs as Required 

but Could Improve 

Analysis of Impact

Reports to the Ranking Member, 

Committee on Homeland Security and 

Governmental Affairs, U.S. Senate

July 2013

GAO-13-740

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-740, a report to the 

Ranking Member, Committee on Homeland 

Security and Governmental Affairs, U.S. 

Senate

July 2013

AGRICULTURAL TRADE

USDA Is Monitoring Market Development Programs

as Required but Could Improve Analysis of Impact

Why GAO Did This Study

USDA administers five programs to 

assist U.S. agricultural industry efforts

to build, maintain, and expand 

overseas markets. However, members 

of Congress continue to debate the 

level of funding for this assistance and 

its impact on agricultural exports. 

USDA provides about $250 million 

annually for the five market 

development programs. MAP and FMD 

received about 90 percent of this 

funding in fiscal year 2012, with 

allocations of $200 million and $34.5 

million, respectively.

GAO was asked to review USDA’s 

market development programs. This 

report (1) describes participation and 

expenditures in these market 

development programs, particularly

MAP and FMD; (2) examines FAS’s 

management and monitoring of its 

market development programs; and (3) 

assesses FAS’s cost-benefit analysis 

of MAP’s and FMD’s impact on the 

U.S. economy. GAO analyzed USDA 

expenditure data from 2002 through 

2011 and reviewed key agency and 

program participant documents. GAO 

also assessed a sample of participants’ 

annual progress reports and assessed 

economic cost-benefit analyses of 

MAP and FMD commissioned by 

USDA. 

What GAO Recommends

GAO recommends that USDA (1)

emphasize that market development 

program participants’ annual progress 

reports should identify the

methodologies used to assess results

and (2) ensure that any economic 

models used in future cost-benefit 

analyses of the programs include 

industry-specific variables and 

sensitivity analyses of key 

assumptions. USDA concurred with 

GAO’s recommendations.

What GAO Found

Market development program participants use program funds to support a variety 

of activities intended to raise awareness or acceptance of U.S. agricultural 

products in overseas markets. Common activities include, among others, market 

research, consumer and retail promotion, and participation in international trade 

shows. GAO’s analysis of expenditure data from 2007 through 2011 shows that

participants in the Market Access Program (MAP) and the Foreign Market 

Development Program (FMD)—the largest of the five market development 

programs—remained generally consistent during that period. The program 

participants with the largest shares of funding and the countries where the largest 

shares of funds were spent also remained relatively consistent. Expenditure data 

for 2011 show that MAP and FMD participants met or exceeded FAS contribution 

requirements that they match minimum percentages of the program funding they 

receive. Unlike funding for the other programs, a portion of MAP funds is used for 

promotion of branded products. In 2011, MAP participants spent about 85

percent of program funding on overseas promotion of generic commodities. More 

than 600 small companies and seven agricultural cooperatives spent the 

remaining 15 percent of MAP funding to promote branded products. 

The U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS)

uses several management and monitoring processes to reduce the risk of 

duplication among the five programs. FAS uses an integrated system to process

funding applications for multiple programs and to monitor expenditures, which 

reduces the risk of duplication. According to FAS officials, FAS also monitors 

participants’ expenses for all programs through its compliance review process. In 

addition, FAS guidance requires program participants to submit annual progress 

reports on the results of their market development activities. GAO found that 

performance measures in a sample of progress reports generally reflected 

selected FAS guidance and key attributes of successful performance measures 

that GAO had identified. However, the sampled reports did not always outline the 

methodologies used to assess activity results as required by FAS guidelines. In 

these cases, it would be difficult for FAS to determine the reliability of the 

reported results and the impact of market development activities. 

A 2007 cost-benefit analysis of MAP and FMD, commissioned by FAS, found that 

the programs increased U.S. agricultural exports and benefited the U.S. 

economy, but methodological limitations may affect the magnitude of the 

estimated benefits. Overall, the analysis asserted that the government’s 

expenditures for the two programs resulted in greater increases in U.S. 

agricultural exports and greater benefit to the U.S. economy than would have 

occurred without the expenditures. However, an economic model used to

estimate the programs’ impact on U.S. market share omitted important variables, 

such as commodity prices. Also, the study did not include sensitivity analyses of 

certain key assumptions underlying its estimates of impacts on U.S. exports. For 

example, analyses of the possible effects of varying levels of program funding 

would provide a clearer picture of the potential impact of increased or decreased 

funding on U.S. exports and the economy. FAS officials reported that they plan to 

commission a new cost-benefit analysis in 2014 but have not yet identified the 

View GAO methodologies that the new analysis will use. -13-740. For more information, 

contact Lawrance Evans at (202) 512-4802 or 

evansl@gao.gov.
Page i GAO-13-740 Agricultural Trade

Letter 1

Background 3

Participants in MAP and FMD Have Remained Relatively 

Consistent in Recent Years 10

FAS Uses Management Processes to Reduce Duplication Risks, but 

Some Participants’ Annual Progress Reports Have Not Identified 

Assessment Methodologies 23

FAS Cost-Benefit Analysis Asserts That MAP and FMD Benefit U.S. 

Economy, but Methodological Limitations May Affect the 

Magnitude of Estimated Benefits 33

Conclusions 39

Recommendations for Executive Action 40

Agency Comments 41

Appendix I Objectives, Scope, and Methodology 42

Appendix II USDA Market Development Program Recipients and Award 

Amounts in Fiscal Year 2012 46

Appendix III Expenditures in 2011 for the Emerging Markets Program, Quality 

Samples Program, and Technical Assistance for Specialty Crops 

Program 50

Appendix IV Cost-Benefit Analyses Assert That Several Market Failures 

Justify FAS Programs 55

Appendix V Computable General Equilibrium Model 56

Appendix VI Comments from the U.S. Department of Agriculture 57

Contents
Page ii GAO-13-740 Agricultural Trade

Appendix VII GAO Contacts and Staff Acknowledgments 59

Tables

Table 1: Authorizations for USDA Market Development Programs, 

Fiscal Years 2002-2012 4

Table 2: Market Access Program (MAP) and Foreign Market 

Development Program (FMD) Expenditures in 2007-2011 

for Program Participants with Largest Shares of Total 2011 

Expenditures 15

Table 3: Countries Where Largest Amounts of Market Access 

Program (MAP) and Foreign Market Development 

Program (FMD) Funds Were Spent in 2011 17

Table 4: Expenditures and Numbers of Small Businesses Supported 

in 2011 by Participants in Market Access Program (MAP) 

Branded Products Program 19

Table 5: Total Market Access Program (MAP) and Foreign Market 

Development Program (FMD) Participant Contributions 

and Expenditures, 2002–2011 22

Table 6: Summary of GAO Analysis of Sampled Country Progress 

Reports 31

Table 7: Market Development Program Participants and Total 

Awards in Fiscal Year 2012, in Descending Order of Total 

Award Amounts 46

Table 8: Program Participants with Largest Expenditures for 

Emerging Markets Program (EMP) in 2011 50

Table 9: Program Participants with Largest Expenditures for 

Quality Samples Program (QSP) in 2011 51

Table 10: Program Participants with Largest Expenditures for 

Technical Assistance for Specialty Crops Program (TASC) 

in 2011 52

Table 11: Countries Where Largest Amounts of Emerging Markets 

Program (EMP), Quality Samples Program (QSP), and 

Technical Assistance Specialty Crops Program (TASC) 

Funds Were Spent in 2011 53

Figure

Figure 1: Examples of Market Development Activities 12
Page iii GAO-13-740 Agricultural Trade

Abbreviations List

EMP Emerging Markets Program

FAS Foreign Agricultural Service

FMD Foreign Market Development Program

MAP Market Access Program

QSP Quality Samples Program

TASC Technical Assistance for Specialty Crops Program

UES Unified Export Strategy

USDA United States Department of Agriculture

WUSATA Western United States Agricultural Trade Association

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Page 1 GAO-13-740 Agricultural Trade

441 G St. N.W.

Washington, DC 20548

July 31, 2013

The Honorable Tom Coburn

Ranking Member

Committee on Homeland Security 

 and Governmental Affairs

United States Senate

Dear Senator Coburn:

The U.S. Department of Agriculture (USDA) provides about $250 million 

annually for five market development programs intended to help U.S. 

agricultural producers increase their exports by building, maintaining, and 

expanding their overseas markets.1 In 2010, the administration 

highlighted the importance of increasing exports, including agricultural 

exports, when it launched the National Export Initiative with the goal of 

doubling the dollar value of U.S. exports by 2015. However, members of 

Congress have debated the level of funding for market development 

assistance and the impact it has on agricultural exports. The two largest 

of USDA’s five market development programs—the Market Access 

Program (MAP) and the Foreign Market Development Program (FMD)—

received authorizations of, respectively, $200 million and $34.5 million of 

USDA’s annual market development program funding in fiscal year 2012. 

The three remaining programs’ authorizations ranged from $2 million to 

$10 million in fiscal year 2012. USDA’s Foreign Agricultural Service (FAS) 

administers the five programs. We last reported on MAP in 1999, when 

we found that USDA’s estimate of the program’s impact on the U.S. 

economy may have been overstated and that evidence of the program’s 

impact from available market-level studies was inconclusive.2 More 

recently, USDA commissioned a cost-benefit analysis of MAP’s and 

 1

In fiscal year 2012, U.S. agricultural exports totaled $135.8 billion.

2

GAO, Agricultural Trade: Changes Made to Market Access Program, but Questions 

Remain on Economic Impact, NSIAD-99-38 (Washington, D.C. Apr. 5, 1999).
Page 2 GAO-13-740 Agricultural Trade

FMD’s economic impact, which was completed in 2007 and updated in 

2010.3

 

You asked us to review several aspects of FAS’s five market 

development programs. This report (1) describes participation and 

expenditures in the programs, particularly MAP and FMD; (2) examines 

FAS’s management and monitoring of its market development programs; 

and (3) assesses FAS’s cost-benefit analysis of MAP’s and FMD’s impact 

on the U.S. economy. Because MAP and FMD receive most of USDA’s 

market development funding—about 90 percent in 2012—we focused our 

review primarily on participation in these two programs. Appendix III 

provides participant expenditure data on the three smaller programs—the 

Emerging Markets Program (EMP), the Quality Samples Program (QSP), 

and the Technical Assistance for Specialty Crops Program (TASC).

We analyzed USDA’s market development program expenditure data for 

participants in each of the five programs for 2002 through 2011. We also 

reviewed key agency and program participant documents, including 

program regulations and guidelines and selected participant applications 

and strategies. We interviewed FAS officials in Washington, D.C., and at 

Agricultural Trade Offices in Japan and Mexico. We also met with several 

program participants in their domestic headquarters and with their 

overseas representatives in Japan and Mexico, where we observed some 

market promotion and maintenance activities. We assessed a random but 

nongeneralizeable sample of participants’ annual progress reports, using 

FAS and GAO criteria for performance measures. In addition, we used 

FAS expenditure data to develop the sample of progress reports from 20 

participants and a specific country where they were active in 2008, 2009, 

and 2010, for a total of 60 country progress reports. On the basis of 

electronic and manual data testing and interviews with knowledgeable 

USDA staff members, we determined that the data were sufficiently 

reliable for our purposes. Further, we analyzed FAS’s cost-benefit 

analyses of MAP and FMD evaluating the impact of these programs on 

the U.S. economy, and we interviewed agency officials, consultants, and 

academics involved in these analyses. Finally, we reviewed relevant 

research about the economic impacts of FAS’s market development 

programs, reviewed Office of Management and Budget guidance for 

 3

Global Insight, Inc., A Cost-Benefit Analysis of USDA’s International Market Development 

Programs, 2007. FAS also commissioned Global Insight, Inc., to perform an updated 

analysis, which was completed in 2010. 
Page 3 GAO-13-740 Agricultural Trade

conducting cost-benefit analyses, and reviewed GAO’s cost estimation 

guide. (For a full description of our scope and methodology, see app. I.)

We conducted this performance audit from August 2012 to July 2013 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

FAS administers USDA’s five market development programs on behalf of 

the Commodity Credit Corporation, which is owned and operated by the 

U.S. government. The programs provide matching funds to support U.S. 

industry efforts to build, maintain, and expand commercial overseas 

markets for U.S. agricultural products, with the overarching goal of 

increasing agricultural exports.4 Congress authorizes a maximum level of 

the corporation’s funds to be used for USDA’s market development 

programs, with the exception of QSP, through 5-year farm bills.5 (Table 1 

shows authorizations for the five programs for fiscal years 2002 through 

2012.) Many other countries also provide government funding to promote 

 4

The market development programs are funded through the permanent borrowing 

authority of the Commodity Credit Corporation, which was created in 1933. The 

corporation has permanent authority to borrow up to $30 billion at any one time from the 

U.S. Treasury, which it uses to finance USDA’s export programs as well as its domestic 

price- and income-support programs.

5

For example, title III of the Food, Conservation, and Energy Act of 2008 set the maximum 

funding levels for all but the QSP program through 2012 (Pub. L. No. 110-246, Title III, 

subtitle B, 122 Stat. 1651, 1831-34). Congress subsequently maintained these levels 

through a continuing resolution for 2013, pending passage of a new farm bill. See 

Continuing Appropriations Resolution, 2013, Pub. L. No. 112-175, 126 Stat. 1313; and 

Consolidated and Further Continuing Appropriations Act, 2013, Pub. L. No. 113-6, § 714, 

127 Stat. 198, 227. The maximum level of annual Commodity Credit Corporation funds for 

QSP—$2.5 million—was set in a Federal Register notice in 1999 (64 Fed. Reg. 61814 

[Nov. 15, 1999]). 

Background
Page 4 GAO-13-740 Agricultural Trade

agricultural exports that compete with U.S exports in the world market.6

The World Trade Organization does not consider such expenditures to be 

trade distorting and therefore does not restrict these expenditures, 

according to USDA officials. 

Table 1: Authorizations for USDA Market Development Programs, Fiscal Years 2002-2012 

Dollars in Millions

Program 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

MAP $100 $110 $125 $140 $200 $200 $200 $200 $200 $200 $200

FMD 34.5 34.5 34.5 34.5 34.5 34.5 34.5 34.5 34.5 34.5 34.5

EMP NA 10 10 10 10 10 10 10 10 10 10

TASC 2 2 2 2 2 2 4 7 8 9 9

QSP 2 2 2 2 2 2 2 2 2 2 2

Total $138.5 $158.5 $173.5 $188.5 $248.5 $248.5 $250.5 $253.5 $254.5 $255.5 $255.5

Source: USDA.

MAP = Market Access Program

FMD = Foreign Market Development Program

EMP = Emerging Markets Program

TASC = Technical Assistance for Specialty Crops Program

QSP = Quality Samples Program

Participants in these programs include nonprofit agricultural trade 

associations; agricultural cooperatives that promote their own brand 

name; and state regional trade groups.7 The majority of market 

 6

A group of organizations, led by the U.S. Wheat Associates and representing a range of 

agricultural commodities, commissioned a study, which was completed in May 2013, of 12 

key competitor countries’ export development programs. The study found that these 12 

countries, which included 4 European Union (EU) countries, spent an estimated U.S. $700 

million in public funds and $1.1 billion in industry funds for a total of $1.8 billion in 2011.

See Agralytica, An Analysis of Competitor Countries’ Market Development Programs: A 

Summary Report Prepared for Cooperator Organizations Led by U.S. Wheat Associates

(Alexandria, Va.: May 2013). 

7

These agricultural cooperatives represent large numbers of individual producers ranging 

from 300 for Sunsweet Growers to 6,000 for Sunkist Growers. State regional trade groups 

are nonprofit associations of state-funded agricultural promotion agencies, typically a 

state’s own department of agriculture. They cover different geographic regions of the 

United States and allocate MAP funds to small businesses seeking to promote brand 

name products for export. The four state regional trade groups are the Food Export 

Association of the Midwest USA, Food Export USA–Northeast, Southern United States 

Trade Association, and the Western U.S. Agricultural Trade Association.
Page 5 GAO-13-740 Agricultural Trade

development funds are used for promotion of generic U.S. commodities, 

with no emphasis on a particular brand; however a portion of MAP funds 

may be used for promotion of branded products. When considering 

applications for funding, FAS gives priority to applicants with the broadest 

producer representation and affiliated industry participation of the 

commodity being promoted. Appendix II shows participants in the five 

market development programs in fiscal year 2012 and their award 

amounts. These organizations may participate in more than one of the 

five market development programs. 

After approving an application for participation in a market development 

program, FAS sets the participant’s funding level and signs a program 

agreement with the participant. FAS provides a program approval letter, 

which outlines approved activities and their budget levels, and program 

funds are expended through reimbursement of the participant’s expense 

claims for approved activities. The five programs have different 

requirements related to participants’ matching contributions, which FAS 

refers to as “cost-sharing”; these requirements ensure that program funds 

are supplemental. MAP requires participants that receive funding for 

promotion of generic products to make contributions to the program that 

are worth at least 10 percent of the funding they receive, although FAS 

encourages participants to commit in their program applications to 

contributing more than the minimum required. Eligible contributions 

include cash; the cost of acquiring materials; and in-kind contributions, 

such as professional staff time spent on design and execution of 

activities. The MAP branded products program and FMD require 

participants to make a minimum contribution of 50 percent. EMP, TASC, 

and QSP do not require minimum or maximum contributions, but 

applicants are expected to propose the amount they will contribute. For all 

five programs, the contribution levels that participants commit to is an 

important factor FAS considers in approving applications for funding, 

according to FAS officials. In addition, MAP and FMD participants must 

certify that program funds supplement, and do not supplant, any private 

funds, while applications for the other three programs must state why the 

applicants could not achieve their objectives without government funds. 

In addition to having different contribution requirements, the five market 

development programs have different funding levels, objectives, and 

criteria for approving applications for funding. 

• Market Access Program. MAP is the largest of the five programs, 

with a current annual authorization of $200 million—about 80 percent 

of USDA’s total annual market development funding. In fiscal year 
Page 6 GAO-13-740 Agricultural Trade

2012, 66 program participants received MAP awards, which ranged 

from about $17,000 to almost $20 million (see app. II). MAP was 

established in 1985 to aid in the development, expansion, and 

maintenance of foreign markets for U.S. agricultural commodities and 

products by sharing the costs of overseas marketing and promotional 

activities.8 A portion of MAP funds is used for promotion of brandname products by cooperatives or by small, for-profit businesses that

apply through state regional trade groups or other MAP participants.9

In addition, unlike participants in the MAP generic products program, 

small businesses promoting branded products are subject to a 

“graduation requirement,” which limits them to no more than 5 years 

of promotions in a given country.10 The MAP regulations for market 

development for generic and branded products identify eligible 

expenditures and criteria that FAS is to consider in approving 

applications and determining funding levels.11 Eligible expenditures 

include, among others, advertising, point-of-sale materials, in-store 

and food service promotions and product demonstrations, seminars 

and educational training, participation in trade shows, market 

 8

MAP was initially established as the Targeted Export Assistance (TEA) program in the 

Food Security Act of 1985. See Pub. L. No. 99-198, § 1124, 99 Stat. 1354. TEA was 

replaced with the Market Promotion Program (MPP) by the Food, Agriculture, 

Conservation, and Trade (FACT) Act of 1990. See Pub. L. No. 101-624, §§ 1531, 1572(3), 

104 Stat. 3674 (amending the Agricultural Trade Act of 1978, Pub. L. No. 95-501, 92 Stat. 

1685). MPP was then renamed the Market Access Program (MAP) by the Federal 

Agriculture Improvement and Reform (FAIR) Act of 1996. See Pub. L. No. 104-127, § 244, 

110 Stat. 888.

9

See 7 C.F.R. § 1485.15. Where the Commodity Credit Corporation approves a MAP 

Participant’s application to run a brand promotion program that will include brand 

participants, the MAP Participant shall enter into participation agreements with brand 

participants. These agreements must include a written certification by the brand 

participant that it is either a small-sized entity as defined by the U.S. Small Business 

regulations (13 C.F.R. part 121) or a U.S. agricultural cooperative.

10The 5 years need not be consecutive. FAS does not consider participation in certain 

international trade shows in foreign countries when it is determining whether participants 

in the branded products program have spent 5 years in a given country. In addition, FAS 

exempts cooperatives from the requirement. FAS determined in 1998 that continued 

support for U.S. agricultural cooperatives was necessary to meet MAP’s objectives, and 

that determination remains in place. 

11See 7 C.F.R. §§ 1485.14 and 1485.17. Prior to May 17, 2012, the MAP regulation 

regarding eligible expenditures was published at 7 C.F.R. § 1485.16. The MAP regulations 

also require MAP participants that operate a branded product program to establish 

operational procedures that include their own criteria for reviewing branded companies’

applications for MAP funds (see 7 C.F.R. § 1485.15). 
Page 7 GAO-13-740 Agricultural Trade

research, and independent evaluations and audits. The process for 

approving applications for MAP funding involves applying a variety of 

qualitative criteria, including the adequacy of the applicant’s plan for 

addressing market constraints and opportunities, prior export 

promotion experience, past program results, and the suitability of the 

applicant’s plan for performance measurement. The MAP regulations 

also list quantitative criteria for determining award amounts for 

qualified applicants, including the size of the budget request relative to 

the projected value of exports of the commodity being promoted, the 

size of the budget request relative to the actual value of exports of the 

commodity in prior years, and the applicant’s proposed contribution 

level.12 

• Foreign Market Development Program. FMD, which was 

established in 1954, provides $34.5 million per year to nonprofit 

agricultural associations representing U.S. agricultural producers and 

processors, to create, expand, and maintain long-term export markets 

primarily for generic bulk commodities. In fiscal year 2012, 24 FMD 

participants received award amounts ranging from about $16,000 to 

more than $5 million (see app. II).13 FMD allows many of the same 

expenditures as MAP, such as market research and product 

demonstrations; however, unlike MAP, FMD funds may not be used 

for activities targeted directly at consumers. The qualitative criteria for 

approving applications for participation in FMD and the quantitative 

factors for determining award amounts are also similar to those for 

MAP. Examples of these quantitative factors include the applicant’s 

contribution level and the value of exports being promoted.14 

 127 C.F.R. § 1485.14(c).

13FMD was first established by the Agricultural Trade Development and Assistance Act of 

1954 and was reauthorized in 1996 by an amendment to Title VII of the Agricultural Trade 

Act of 1978. See Pub.L. No. 480, ch. 469, 68 Stat. 454; and Federal Agriculture 

Improvement and Reform Act of 1996, Pub. L. No. 104-127, Title II, § 252, 110 Stat. 888, 

972.

14The FMD regulations and the Federal Register Notice of Funds Availability for FMD list 

the specific criteria that FAS is to use in approving applications for funding and setting 

award amounts. See 7 C.F.R. §§ 1484.21 - 22 and 78 Fed. Reg. 23,889-23,890 (Apr. 23, 

2013).
Page 8 GAO-13-740 Agricultural Trade

• Emerging Markets Program. EMP, which was established in 1990, 

provides up to $10 million annually15 to U.S private-sector, university, 

or government entities for technical assistance activities intended to 

promote exports of U.S. agricultural commodities and products in 

emerging markets by improving their food and business systems and 

reducing potential trade barriers.16 In 2012, FAS awarded EMP funds 

to 35 entities, some of which received funding for more than one EMP 

project, with total awards per participant ranging from $14,000 to 

about $500,000 (see app. II). Types of projects funded may include 

feasibility studies, market research, sector assessments, orientation 

visits, specialized training, business workshops, and similar 

undertakings. EMP is not intended for projects targeted at end-user 

consumers. Ineligible expenses include branded product promotions 

(e.g., in-store promotions, restaurant advertising, labeling); 

advertising, administrative, and operational expenses for trade shows; 

website development; equipment purchases; and the preparation and 

printing of brochures, flyers, and posters. The EMP regulations list the 

criteria FAS is to consider in reviewing applications for funding.17

Among these criteria are the applicant’s willingness to contribute 

resources; the degree to which the proposed project is likely to 

contribute to the development, maintenance, or expansion of U.S. 

agricultural exports to emerging markets; and a demonstration of how 

the proposed project will benefit a particular industry as a whole. 

Individual projects are unlikely to be approved at levels above 

$500,000, and funding for continuing and substantially similar projects 

is generally limited to 3 years.

• Quality Samples Program. QSP, which was established in 1999, 

currently provides $2 million annually to assist U.S. organizations in 

 15EMP’s initial authorization of $5 million is found in section 1542 of the Food, Agriculture, 

Conservation, and Trade Act of 1990 (Pub. L. No. 101-624, § 1542).

16EMP regulation defines an emerging market as any country or regional grouping that is 

taking steps toward a market-oriented economy through the food, agriculture, or rural 

business sectors of the economy of the country; has the potential to provide a viable and 

significant market for U.S. agricultural commodities or products; and has a population 

greater than $1 million and a per capita income level below the level for upper-middleincome countries as determined by the World Bank (7 C.F.R. § 1486.101). The World 

Bank periodically redefines the income limits on upper-middle-income economies. 

Consequently, an absolute list of emerging markets has not been established. 

177 C.F.R. § 1486.209.
Page 9 GAO-13-740 Agricultural Trade

supplying commodity samples to potential foreign importers.18

Projects focus on industry and manufacturing, rather than on end-use 

consumers, and are intended to promote U.S. food and fiber products. 

In fiscal year 2012, 12 program participants received QSP funding, in 

most cases for multiple projects, with total awards per participant

ranging from $5,000 to $460,000 (see app. II). QSP funding for 

individual projects is limited to $75,000, and the projects should be 

completed within a year of approval by FAS. Eligible expenditures 

include the sample purchase price and the cost of transporting the 

samples domestically to the port of export and from there to the 

foreign port or point-of-entry. Samples provided in a QSP project may 

not be directly used as part of a retail promotion or supplied directly to 

consumers. The annual QSP Notice of Funds Availability spells out 

the criteria that FAS is to use for approving applications for QSP 

funding.19 These criteria include, among others, the potential for 

expanding commercial sales in the proposed market; the importer’s 

contribution in terms of handling and processing the sample; the 

amount of funding requested and the applicant’s willingness to 

contribute resources; and how well the proposal’s technical 

assistance will demonstrate the intended end-use benefit.

• Technical Assistance for Specialty Crops Program.

20 TASC, which 

was established in 2002, is currently authorized under the 2008 farm 

bill, as extended by the American Tax Payer Relief Act of 2012, to 

provide a maximum of $9 million to U.S. entities, for projects that 

address sanitary, phytosanitary, and technical barriers that prohibit or 

 18QSP is authorized under Section 5(f) of the Commodity Credit Corporation Charter Act, 

codified as amended at 15 U.S.C. § 714c (f). 

19See Notice of Funds Availability: Inviting Applications for the Quality Samples Program, 

78 Fed. Reg. 23,896 (Apr. 23, 2013).

20TASC regulations (7 C.F.R. § 1487.1) define specialty crops as all cultivated plants, or 

the products thereof, produced in the United States, except wheat, feed grains, oilseeds, 

cotton, rice, peanuts, sugar, and tobacco.
Page 10 GAO-13-740 Agricultural Trade

limit U.S. specialty crop exports.21 Any U.S. organization may receive 

TASC funding, including, but not limited to, U.S. government and state 

government agencies, nonprofit trade associations, universities, 

agricultural cooperatives, and private businesses. In 2012, FAS 

awarded funds to 24 participants, some of whom received funding for 

multiple projects, and total funding awarded to each participant 

ranged from about $1.3 million to $14,000 (see app. II). FAS will not 

consider proposals for TASC funding that exceed $500,000 in a given 

year. Examples of eligible expenditures include seminars and 

workshops, study tours, field surveys, development of pest lists, and 

pest and disease research. Certain types of expenses are not eligible 

for reimbursement, such as the costs of market research, advertising, 

and other promotional expenses. The TASC regulations list a variety 

of criteria that FAS is to consider in evaluating applications for 

funding, including, among others, the viability and completeness of 

the proposal, the potential trade impact of the project on issues such 

as market retention, and the cost and level of contributions from the 

applicant.22 

Participants in USDA’s market development programs use program funds 

to support a variety of activities intended to raise awareness or 

acceptance of U.S. agricultural products in overseas markets. MAP and 

FMD participants, their share of program expenditures, and the countries 

where they spent the majority of program funds remained relatively 

consistent from 2007 through 2011. Unlike funds for the other programs, 

a portion of MAP funds is used for promotion of branded products. In 

2011, MAP participants spent about 85 percent of program funding on 

overseas promotion of generic commodities; more than 600 small 

companies and seven agricultural cooperatives spent the remaining 15 

percent of MAP funding to promote branded products. MAP and FMD 

participants met or exceeded those programs’ requirements for minimum 

 21TASC was first established in the Farm Security and Rural Investment Act of 2002 (Pub. 

L. No. 107–171, § 3205, 116 Stat. 134, 301). Section 701 of the American Taxpayer Relief 

Act of 2012 extended certain authorities and amendments made by the 2008 farm bill 

including the authority for TASC. See Pub. L. No. 112-240, § 701, 126 Stat. 2313, 2362 

(2013). Sanitary and phytosanitary measures are rules and procedures that governments 

adopt to ensure that imported foods and beverages are safe to consume and to protect 

domestic animals and plants from pests and diseases. Technical barriers to trade are 

nontariff trade barriers that can take the form of product standards, testing requirements, 

and other technical requirements.

227 C.F.R. § 1487.6(a).

Participants in MAP 

and FMD Have 

Remained Relatively 

Consistent in Recent 

Years 
Page 11 GAO-13-740 Agricultural Trade

matching contributions. Appendix III shows EMP, QSP, and TASC 

participant expenditures in 2011. 

Market development program participants have used program funds to 

conduct a variety of activities intended to raise awareness or acceptance 

of U.S. agricultural products in overseas markets. Participants have also 

used program funds to address technical barriers that prohibit or limit 

specialty crop exports. Many program participants receive funding from 

more than one of the five market development programs. For instance, in 

fiscal year 2012, 22 of the 66 MAP participants received funds from FMD, 

and 22 of the 24 FMD participants received funds from MAP. In addition, 

all 12 QSP participants, 6 of the 24 TASC participants, and 18 of the 35 

EMP participants received funds from at least one other program (see 

app. II for additional details). The following paragraphs present examples 

of five participants’ use of 2011 program funds for market development 

efforts in Japan and Mexico.23 Common activities undertaken included, 

among others, market research, consumer and retail promotion, 

participation in international trade shows, and reverse trade missions, in 

which foreign buyers visit U.S. agricultural producers. 

 23The five participants we selected for our case studies received MAP, FMD, or TASC 

funds in 2011, in some cases receiving funds from more than one program; none of the 

five participants received EMP or QSP funds in that year. See appendix I for a description 

of our selection of the five participants for the case studies. 

Program Participants Have 

Conducted a Variety of 

Activities to Promote Their 

Products Overseas 
Page 12 GAO-13-740 Agricultural Trade

Figure 1: Examples of Market Development Activities

The American Hardwood Export Council used more than $1.7 million in 

2011 MAP and FMD funds for multiple generic product promotional efforts 

in Japan. According to a council representative, consumers in Japan 

value wood products from trees that are harvested legally and 

sustainably, which provides a marketing advantage for American 

hardwood compared with woods from tropical competitors. We visited 

furniture stores in Japan displaying the American Hardwood Export 

Council’s informational handouts, which highlight the sustainability and 

legality of American hardwoods used in the furniture. The council’s efforts 

American Hardwood Export 

Council
Page 13 GAO-13-740 Agricultural Trade

in Japan also include educating designers and architects about the 

environmental advantage—that is, the smaller carbon “footprint”—of 

sustainable wood products compared with synthetic material. The council 

also conducts educational efforts aimed at explaining to Japanese 

furniture and flooring manufacturers, designers, and architects that 

discoloration and curving grains are wood characteristics rather than 

imperfections, because, according to a council representative, straight 

wood grain has traditionally been favored in Japan.

California Table Grape Commission used about $271,000 in 2011 MAP 

funds for generic product promotional activities in Mexico. Commission 

representatives informed us that in-store promotional activities are the 

most effective means of reaching the customer. Promotional activities 

include in-store grape display competitions as well as promotions with 

other U.S. fruit groups, such as apples and pears. The commission also 

used MAP funding to conduct in-store grape sampling demonstrations at 

major retail chains throughout Mexico to demonstrate the quality of 

California grapes. In 2010 and 2011, FAS authorized the commission to 

use TASC funds for activities to remove, resolve, or mitigate sanitary,

phytosanitary, and related barriers that prohibit or threaten the export of 

U.S. specialty crops in multiple countries. In 2011, the commission 

received an allocation of more than $363,000 for a multiyear TASC 

project to conduct research and provide the ancillary staffing and supplies 

needed to identify postharvest treatment protocols to eliminate invasive 

pests in U.S. grape exports. 

Cotton Council International used more than $2.7 million in MAP and 

FMD funds in 2011 for generic product promotion activities in Japan. 

These activities—such as educating Japanese consumers about the 

benefits and unique characteristics of cotton versus other fibers and 

conducting advertising, public relations, and promotions—were intended 

to increase consumer preference for cotton and retailer demand for 

fabrics made from U.S. cotton. According to representatives from Cotton 

Council International, increasing demand for clothing made with U.S. 

cotton in a large consumer market, such as Japan, also increases exports 

of cotton fiber to other countries that manufacture cotton garments for 

sale to retail buyers in Japan. 

The Western United States Agricultural Trade Association (WUSATA) 

provided a total of about $926,000 in MAP funds for market development 

activities in Japan and Mexico in 2011. WUSATA, which is one of four 

state regional trade groups with responsibility for supporting MAP 

branded product promotion for small businesses, directed more than half 

California Table Grape 

Commission

Cotton Council International

Western United States 

Agricultural Trade Association
Page 14 GAO-13-740 Agricultural Trade

of this funding to 34 small businesses to support their branded product 

promotions in Japan and Mexico. WUSATA allocates the majority of its 

annual MAP funds to more than 200 small businesses and cooperatives

based in 13 western states, according to WUSATA officials. WUSATA 

also uses some of its MAP funds for generic product promotion, primarily 

for participation in numerous international trade shows and for inbound 

and outbound trade missions. In addition, WUSATA devotes some MAP 

funding for generic product promotion and outreach efforts to small 

businesses to encourage them to consider exporting their products and 

use assistance from the MAP program. WUSATA officials noted that 

many businesses are unaware of their products’ overseas market 

potential. 

The Wine Institute used more than $106,000 in 2011 MAP funds for 

generic product promotional activities in Mexico. In Mexico, we observed 

a Wine Institute-sponsored promotional event in Mexico City to facilitate 

trade contacts between California wine label representatives and Mexican 

wine importers. The event was intended to generate publicity for 

California wines and increase consumer awareness. In Japan, where 

consumers are most familiar with European wines, the Wine Institute 

worked with restaurants to promote California wines, according to a Wine 

Institute representative. The Wine Institute uses some of its MAP funding 

to support branded product promotion by small businesses. In 2011, the 

Wine Institute also received a $500,000 TASC allocation for a 5-year 

project to prepare and file petitions to the Japanese government to allow 

the sale of U.S. wines containing certain additives that are commonly 

used by U.S. producers. 

MAP and FMD participants and their share of market development 

program expenditures remained relatively consistent from 2007 through 

2011, with many of the same participants receiving the majority of funding 

each year. Expenditures by the 10 participants that spent the largest 

amounts of funding from the two programs in 2011 represented 54 to 57

percent of those programs’ total expenditures in 2007 through 2011 (see 

table 2).24 According to FAS officials, these 10 participants also reflect the 

top 10 U.S. exports of agricultural products in 2011, although not in the 

 24See tables 8, 9, and 10 in appendix III for program participants with largest shares of 

EMP, QSP, and TASC expenditures in 2011.

Wine Institute

MAP and FMD Program 

Participants and 

Expenditures Remained 

Generally Consistent in 

Program Years 2007

through 2011
Page 15 GAO-13-740 Agricultural Trade

same rank order. An FAS official noted that MAP and FMD typically 

provide ongoing support for program participants that seek not only to 

open new overseas markets but also to maintain export market share. 

These participants typically receive funding every year. According to FAS 

officials, although a variety of both qualitative and quantitative factors 

affect the level of funding provided to participants each year, FAS seeks 

to provide a stable level of funding to support participants’ multiyear 

market development strategies.25 

Table 2: Market Access Program (MAP) and Foreign Market Development Program (FMD) Expenditures in 2007-2011 for 

Program Participants with Largest Shares of Total 2011 Expenditures

Dollars in millions

Participant ranking by 2011 MAP and FMD 

expenditures MAP

participant

FMD

participant

MAP and FMD expenditures

2007 2008 2009 2010 2011

1 Cotton Council International yes yes $32 $25 $25 $25 $24

2 U.S. Meat Export Federation yes yes 17 20 18 18 19

3 U.S. Grains Council yes yes 13 12 13 14 15

4 AHEC, APA, SEC, SFPA yes a yes 13 13 13 13 14

5 U.S. Wheat Associates yes yes 11 11 12 12 13

6 Food Export Association Midwest USA yes no 10 11 11 11 12

7 American Soybean Association yes yes 16 14 12 10 11

8 Western United States Agricultural Trade 

Assoc. yes no 9 11 11 11 10

9 Food Export USA–Northeast yes no 7 8 9 9 9

10 Southern United States Trade 

Association 

yes no 7 7 6 6 7

Top 10 2011 MAP and FMD participants’ total expenditures (percentage 

of all MAP and FMD expenditures)

$134.3

(54%)

$130.5

(55%)

$129.4

(55%)

$129.5

(56%)

$134.0

(57%)

All MAP and FMD expenditures $249.0 $238.7 $233.2 $233.0 $235.0

Source: GAO analysis of USDA data.

Notes: 

The participants shown represent those with the 10 highest total MAP and FMD expenditures for 

2011. The same participants were among the top 15 each year in 2007 through 2010, although not 

always in the same rank order as in 2011.

 25Quantitative criteria for setting funding levels include the dollar value of exports, 

participant contribution levels, and prior year funding levels. FAS may reduce or increase 

a participant’s award amount depending on the quality of the participant’s program or a 

change in conditions affecting its ability to maintain or expand exports. EMP, QSP, and 

TASC provide project-specific funding rather than ongoing assistance to participants.
Page 16 GAO-13-740 Agricultural Trade

Numbers in columns may not sum to totals because of rounding.

a

The American Hardwood Export Council (AHEC), the Engineered Wood Association (APA), the 

Softwood Export Council (SEC), and the Southern Forest Products Association (SFPA) collectively 

submit single annual applications for MAP and FMD awards.

Our analysis of expenditure data from 2002 through 2011 shows that 

MAP and FMD participants spent market development funds throughout 

the world, consistently spending more than half of the funds in the same 

10 countries. (Table 3 shows MAP and FMD expenditures in these 

countries in 2011.)

26 The expenditures in these 10 countries accounted 

for 66 percent, on average, of total MAP and FMD expenditures from 

2002 through 2011. According to an FAS official, participants are 

encouraged to direct program funds to markets where they will have the 

greatest impact on increasing exports. This official noted that, although

participants use MAP and FMD funds in a variety of export markets, the 

majority of their funds are expended in countries with the largest export 

markets for U.S. agricultural products. 

 26See table 11 in appendix III for countries where the largest amounts of EMP, QSP, and 

TASC funding were spent in 2011.

Majority of MAP and FMD 

Funding Is Spent in a 

Consistent Group of 

Countries
Page 17 GAO-13-740 Agricultural Trade

Table 3: Countries Where Largest Amounts of Market Access Program (MAP) and 

Foreign Market Development Program (FMD) Funds Were Spent in 2011

Dollars in millions

Country ranking by share 

of MAP and FMD 

expenditures

Total MAP and FMD 

expenditures

Percentage of total MAP and 

FMD 

expenditures

1 Japan $30 13%

2 China 26 11

3 Mexico 23 10

4 United Kingdom 15 6

5 United States 13 6

6 South Korea 12 5

7 Canada 10 4

8 Germany 10 4

9 Taiwan 7 3

10 Hong Kong 6 3

Total $153 65%

Source: GAO analysis of USDA expenditure data.

Notes: 

Our analysis of data for 2002 through 2011 shows that MAP and FMD participants consistently spent 

more than half of program funds in the 10 countries shown. The United States is included among 

these countries because participants spend program funding in the United States on a variety of 

activities, such as reverse trade missions, international trade shows, and research for select 

Emerging Markets Program and Technical Assistance for Specialty Crops Program projects. In 

addition, the strategic regional trade groups use program funds to pay for domestic administrative 

expenses. 

Although the United States does not have diplomatic relations with Taiwan, we have listed it as a 

separate country because whenever the laws of the United States refer or relate to foreign countries, 

nations, states, governments, or similar entities, such terms shall include and shall apply to Taiwan. 

Hong Kong is a special administrative region of China, but we have included it in this report as a 

separate country because it is an economic entity separate from the rest of China and is able to enter 

into international agreements on its own behalf in commercial and economic matters. 

Expenditure amounts are rounded to the nearest million and therefore may not sum to column totals.

In 2011, about 15 percent of total MAP expenditures were used to 

promote branded products. The four state regional trade groups and five 

of the agricultural trade associations in the MAP program allocated a 

portion of their MAP funding to small businesses to promote branded 

products in foreign markets. Specifically, these groups allocated a total of 

more than $22.8 million in MAP funds for branded product promotions in 

2011 to 644 small businesses. These small businesses’ average 

expenditure in 2011 was about $25,000 and their median expenditure 

Fifteen Percent of 2011 

MAP Expenditures 

Supported Promotion of 

Branded Products
Page 18 GAO-13-740 Agricultural Trade

was $33,000. Small businesses use MAP funding for a variety of 

activities, including participation in trade shows, buying missions, 

advertising, and in-store demonstrations and promotions. In addition, 

seven agricultural cooperatives—Sunkist Growers, Inc.; Blue Diamond 

Growers; Sunsweet Growers, Inc.; Sun-Maid Growers of California; 

Welch Foods, Inc.; Ocean Spray Cranberries, Inc.; and Cal-Pure 

Pistachios, Inc.—spent about $6.4 million in 2011 to promote their own 

brands. According to FAS officials, cooperatives’ activities to promote 

their products using a brand name are often similar to the activities of 

trade associations promoting generic commodities. Table 4 shows the 16 

organizations that participated in the MAP branded products program in 

2011, the portions of their total MAP expenditures that were used for 

promotions of branded products, and the numbers of small businesses 

that the participants’ MAP branded products program expenditures 

supported. 
Page 19 GAO-13-740 Agricultural Trade

Table 4: Expenditures and Numbers of Small Businesses Supported in 2011 by Participants in Market Access Program (MAP) 

Branded Products Program

Dollars in thousands

Participant

Branded products 

program 

expenditures

Total MAP 

expenditures

Branded products 

program 

expenditures as 

percentage of total 

MAP expenditures

Number of small 

businesses 

supported

through the 

branded program

State regional trade groups

Food Export Association of the Midwest $7,151 $11,561 62% 167

Western U.S. Agricultural Trade Association 7,162 10,204 70 217

Food Export USA - Northeast 4,843 9,097 53 143

Southern U.S. Trade Association 2,630 7,180 37 65

Trade associations

U.S. Meat Export Federation 60 17,481 0.3 10

Wine Institute 89 6,372 1 6

National Confectioners Association 661 1,583 42 19

U.S. Livestock Genetics Export, Inc. 233 1,160 20 16

New York Wine and Grape Foundation 2 398 0.4 1

Cooperatives

Almond Board of California/Blue Diamond 

Growers

1,326 3,755 35 NA

California Prune Board/Sunsweet Growers 

Inc.

698 3,196 22 NA

Sunkist Growers, Inc 2,551 2,551 100 NA

Raisin Administrative Committee/Sun Maid

Growers of California

89 1,975 5 NA

Cranberry Marketing Committee/Ocean Spray 

Cranberries, Inc.

350 1,758 20 NA

American Pistachio Growers/Cal-Pure 

Pistachios Inc.

503 967 52 NA

Welch Foods Inc. 922 922 100 NA

Total $29,267 $201,242 15% 644

Source: GAO analysis of USDA data.

Notes: 

With the exception of Sunkist Growers and Welch Foods, Inc., the cooperatives shown participate in 

the MAP program with a partner trade association that promotes a generic commodity. For example, 

the Almond Board of California promotes almonds generically with its share of MAP funding, while 

Blue Diamond Growers uses its share of MAP funding to promote almonds with the Blue Diamond 

brand name.

Numbers in columns may not sum to totals because of rounding.
Page 20 GAO-13-740 Agricultural Trade

From 2002 through 2011, a total of 2,131 unique small businesses 

received funding for promotional activities through the MAP branded 

products program. Many of the small businesses participated in the MAP 

branded products program for multiple years. Of the 2,131 businesses, 41 

percent were involved in the branded products program for 1 year, and 59 

percent were involved for more than a year. In 2011, 153 small 

businesses expended MAP branded program funds for the first time. The 

MAP branded products program had, on average, about 638 unique small 

businesses per year and supported activities throughout the world. The 

largest expenditures of program funding for MAP branded products were 

directed to 8 of the 10 countries with the largest expenditures of total 

MAP and FMD funding, shown in table 3.

From 2002 through 2011, small businesses in the MAP branded products 

program reached the 5-year limit for promoting a product in a given 

country—known as the program’s “graduation requirement”—in 1,121

instances.27 These instances involved 569 businesses in about 80

countries. During this period, 64 businesses used MAP branded products 

program funding for more than 5 years in a given country in 82 instances. 

According to FAS, participation in certain international trade shows is 

exempt from the graduation requirement for the MAP branded products 

program.

28

 27The graduation requirement applies only to small businesses eligible to participate in the 

MAP branded products program. FAS waives the graduation requirement for participating 

agricultural cooperatives.

28Current MAP regulations state that small businesses participating in certain international 

trade shows in foreign countries will not be considered when determining their time in 

country for purposes of the 5-year graduation requirement. Such shows must meet two 

criteria: (1) They are food or agricultural shows, with no less than 30 percent of exhibitors 

selling food or agricultural products, and are international shows—that is, targeting buyers, 

distributors, and the like from more than one foreign country. (2) No fewer than 15 percent 

of each show’s visitors are from countries other than the host country (7 C.F.R. § 

1485,15). FAS regularly compiles a list of international trade shows that are exempt from 

the graduation requirement and publishes the list as a MAP notice on FAS’s website.
Page 21 GAO-13-740 Agricultural Trade

In 2011, all MAP and FMD participants met or exceeded the programs’ 

required minimum matching contribution levels.29 The average 

contribution level for MAP participants was about 191 percent of MAP 

expenditures in 2011, and the median contribution level was about 134

percent.30 The majority of these participants contributed more than 100 

percent of their total expenditures. The average contribution level for all 

FMD participants in 2011 was 316 percent, and the median was 232

percent. Nearly all FMD participants provided matching cash and in-kind 

contributions of more than 100 percent of total expenditures. 

Since 2002, MAP participants’ total contributions have ranged from 138 

percent to 198 percent of their total MAP expenditures, and FMD 

participants’ total contributions have ranged from 123 percent to 192 

percent of their total FMD expenditures. Table 5 compares MAP and FMD 

participants’ contributions and expenditures in 2002 through 2011.

 29The minimum contribution requirement for a participant in the MAP generic products

program is 10 percent of the participant’s MAP expenditures; the requirement for a 

participant in the MAP branded product program is 50 percent of total expenditures. FMD 

also requires a minimum contribution of 50 percent of resources provided by FAS; all FMD 

promotion is for generic commodities. Small businesses in the MAP branded products 

program are reimbursed for 50 percent of their expenses for approved activities.

30The average MAP participant contribution and expenditure levels reflect contributions 

and expenditures for both generic and branded product promotions.

Matching Contributions for 

MAP and FMD Met or 

Exceeded Minimum 

Contribution Requirements

in 2011 
Page 22 GAO-13-740 Agricultural Trade

Table 5: Market Access Program (MAP) and Foreign Market Development Program 

(FMD) Participants’ Total Contributions and Expenditures, 2002–2011

Dollars in millions

Participant 

contributions

Participant 

expenditures

Contributions as 

percentage of 

expenditures

MAP

2002 $199 $101 198%

2003 193 129 150

2004 207 140 148

2005 347 234 148

2007 318 213 149

2008 349 204 171

2009 274 199 138

2010 330 201 164

2011 394 201 196

FMD

2002 $45 $31 146%

2003 46 33 140

2004 44 36 123

2005 51 37 139

2006 49 35 137

2007 49 36 137

2008 52 35 150

2009 60 34 176

2010 62 32 192

2011 62 34 184

Source: GAO analysis of USDA data.

Notes: 

In 2006, FAS changed the MAP program year timeframe. As a result, FAS recorded 2006 MAP 

expenditures and contributions among data for the 2005 and 2007 program years, according to an

FAS official.

Participants in the MAP generic and branded products programs are required to contribute a 

minimum of 10 percent and 50 percent, respectively, of their program expenditures. Participants in 

FMD are required to contribute a minimum of 50 percent of resources received from FAS.
Page 23 GAO-13-740 Agricultural Trade

FAS has established processes to reduce risks of duplication among the 

five market development programs, to monitor participant expenditures, 

and to assess program results. FAS’s integrated approach includes a 

unified database and application process to help mitigate risks of 

duplication. In addition, FAS works with participants in the MAP branded 

products program to ensure that the small businesses they support are 

not receiving funds for similar activities from more than one source; our 

review of 2011 data found no small businesses receiving funds from 

multiple sources. FAS also conducts regular compliance reviews to verify 

participants’ program expenditures and contributions. FAS guidelines 

require program participants to submit annual progress reports assessing 

results for each country where they conduct market development 

activities. In the progress reports that we reviewed, program participants’ 

performance measures generally reflected requirements in FAS 

guidelines as well as key attributes of successful performance 

measurement that we identified in previous GAO reports. However, 149 

of the 373 performance measures in the reports that we reviewed did not 

clearly identify, as the FAS guidelines require, the methodologies used to 

assess results for each performance measure, making it difficult to verify 

the reported results. FAS guidelines also require MAP and FMD 

participants to conduct comprehensive evaluations of their programfunded market development activities when appropriate.

FAS integrates its management processes to reduce the risk of 

duplication among the market development programs, given that many 

participants receive funding from more than one program. Because MAP 

and FMD support many of the same goals and allowable expenses and 

most FMD participants also participate in MAP, the greatest risk of 

duplication is between these two programs. To reduce this risk, FAS uses 

an integrated online system, known as the Unified Export Strategy (UES)

system, which participants typically use to apply for funding for any of the 

five market development programs.31 For example, a participant seeking 

funding for both FMD and MAP submits a single application through the 

 31UES is a standardized online Internet system developed by USDA and available for use 

by entities to apply to any USDA market development program. FAS encourages 

participants to submit their applications through the UES system, but does not require 

them to do so. According to an FAS official, participants generally apply through the UES 

system. In some cases applicants for relatively small projects may submit applications 

outside the UES system; however, FAS tracks all approved activities and expenditures 

through the system. 

FAS Uses 

Management 

Processes to Reduce 

Duplication Risks, but 

Some Participants’ 

Annual Progress 

Reports Have Not 

Identified Assessment 

Methodologies 

FAS Established Integrated 

Management Processes to

Reduce Risks of 

Duplication among Market 

Development Programs
Page 24 GAO-13-740 Agricultural Trade

UES system, explaining how it intends to use both programs to support its 

foreign market development objectives. FAS’s review of these funding 

applications allows it to prevent duplicative programming, according to 

FAS officials. FAS officials also noted that only expenses for preapproved activities may be reimbursed and that the UES system 

associates each approved activity with the particular program for which it 

was approved. In addition, FAS agricultural attachés based in overseas 

posts review and comment on the portions of participants’ applications 

that apply to their countries and regions. This provides an additional layer 

of review that helps prevent duplicative programming, according to FAS 

officials. 

FAS also takes steps to ensure that small businesses participating in the 

MAP branded program do not obtain funding from more than one 

source—such as two state regional trade groups—for promotion in the 

same country. To prevent such duplicative funding, FAS requires that the 

four state regional trade groups provide the names of all businesses and 

products participating in their branded promotion programs each year.32 

According to an FAS official, FAS also participates in regular conference 

calls with the four state regional trade groups, during which they compare 

lists of small businesses applying for branded products program funding. 

In addition, FAS circulates a memo annually to the four groups, stating 

that businesses that promote certain product types should seek funding 

from specific commodity groups before applying for funds from the state 

regional trade groups. For example, FAS’s memo in 2012 stated that 

small businesses promoting dairy, livestock, meat, poultry, seafood, and 

egg products should be referred first to the applicable commodity groups 

before applying for funding from a state regional trade group. In reviewing 

expenditure data for MAP branded product promotions for the 2011 

program year, we found no instances in which small businesses obtained 

funding from multiple sources to promote the same products in the same 

countries. 

 32According to an FAS official, a small business may obtain funding for branded product 

promotion from more than one program participant—either a trade association or a state 

regional trade group—if the business uses the second source of funding in different 

countries or for different products.
Page 25 GAO-13-740 Agricultural Trade

FAS performs financial and compliance reviews to verify that participants 

claimed reimbursement for expenses appropriately, and it holds 

participants accountable for maintaining proper documentation of all of 

their reimbursement claims. According to an FAS official, FAS’s 

independent Compliance Review Branch has a staff of eight officers, 

including the branch chief, who periodically visit participant sites to verify 

that all expenses submitted for reimbursement are authorized, 

reasonable, and documented. These compliance reviews cover all market 

development programs in which the participant was involved, enabling the 

compliance officers to verify that all reimbursement claims were paid for 

pre-approved expenses for each program. The reviews also verify that 

participants’ reported contributions are properly documented, are based 

on allowable expenses, and match the amounts that the participants 

committed to in their market development program applications. In 

addition, the compliance officers verify that participants that spent 

$500,000 or more of federal funds from one or more sources in a single

year have been audited in accordance with Office of Management and 

Budget Circular A-133. Our review of FAS documentation for five program 

participants showed that FAS conducted compliance reviews of these 

participants between May 2011 and March 2012.

According to the Compliance Review Branch Chief, compliance officers 

typically conduct these reviews every 3 years for the smaller participants 

and verify 100 percent of those participants’ expenses. Compliance 

officers conduct reviews more frequently for the larger participants 

because of the volume of reimbursement claims involved, and they may 

review only a sample of those participants’ expenses. Participants must 

return to FAS any reimbursements for claims found not to be allowable. 

The Compliance Review Branch Chief stated that, although participants 

have the right to a hearing to contest compliance review results, they 

generally repay the rejected claims under an agreed timeframe. The Chief 

also noted that, because participants typically apply for future funding 

from the programs, they have an incentive to comply with FAS 

requirements. 

FAS Monitors Participants’ 

Expenses for All Programs 

through Its Compliance 

Review Process
Page 26 GAO-13-740 Agricultural Trade

The performance measures in the progress reports that we reviewed 

generally met criteria based on FAS guidance for progress reports and 

key attributes of successful performance measures that we previously 

identified. However, some participants’ annual progress reports did not 

identify the approaches and information sources used to assess activity 

results for each performance measure, as FAS guidelines require. FAS 

guidelines require MAP and FMD participants to submit, within 6 months 

after the program year ends, annual country progress reports identifying 

market challenges, describing activities over the past year, and stating 

measureable goals and results of their performance.33 These reports 

enable the participants and FAS to assess the participants’ progress in 

achieving their stated goals each year. In addition, FAS considers 

participants’ progress reports when reviewing their MAP and FMD funding 

applications for subsequent years.

FAS guidelines require, among other things, that MAP and FMD 

participants’ annual progress reports contain the following elements to 

demonstrate how their market development activities are relevant and 

their impact is measured.34 The reports should identify “constraints”—that 

is, obstacles to achieving stated objectives—and “opportunities,” which

participants can utilize to achieve their objectives in the markets where 

they operate. The reports should also provide the performance measures 

that will be used to assess each activity’s impact on these constraints and 

opportunities. (See the text box for an example, from FAS guidelines, of a 

constraint and its related performance measures.) Further, the reports 

should show, for each performance measure, an associated baseline 

measure, a stated goal for the given year, and a result. Finally, the 

reports should identify the methodology that will be used to assess 

progress toward the goal associated with each performance measure. 

 33FAS has different reporting requirements for EMP and TASC participants than for MAP 

and FMD participants. We reviewed only progress reports associated with MAP and FMD 

programs, which represent the vast majority of FAS’s market development funding.

34Agralytica, Results-Oriented Management: A Guide for FAS Industry Partners

(Alexandria, Va.: 2001).

Selected MAP and FMD 

Progress Reports 

Generally Reflected FAS 

Requirements and Key 

Attributes of Successful 

Performance 

Measurement, but Some 

Reports Did Not Identify 

Assessment Methodology 

as Required 

FAS Has Established Guidance 

for Developing and Reviewing 

Annual Progress Reports 
Page 27 GAO-13-740 Agricultural Trade

FAS staff in Washington, D.C., and at applicable overseas posts review 

participants’ annual progress reports as part of the annual application 

review, according to FAS officials and participant representatives. FAS 

staff provide feedback to participants about their reports both informally, 

through e-mail and telephone, and formally, through feedback letters. For 

example, one feedback letter from FAS that we reviewed instructed the 

participant to express its objectives more concisely and to develop 

performance measures that track the desired outcome rather than the 

participant’s activities. FAS officials noted that their reviews of funding 

applications consider whether participants adjusted their market 

development strategies on the basis of results they reported for the 

previous year. Two Agricultural Trade Officers told us that, in addition to 

reviewing the reports, they have provided participants support and 

feedback regarding the identification of constraints and opportunities and 

development of performance measures. 

FAS also provides training to help participants identify constraints and 

opportunities and develop performance measures that meet FAS’s 

requirements. According to FAS officials, biannual conferences of 

program participants generally include workshops on program evaluation, 

which in the past have emphasized developing meaningful performance 

measures. One of the Agricultural Trade Officers whom we interviewed 

reported having conducted a workshop that reviewed the UES process 

and discussed key definitions and criteria for identifying constraints and 

opportunities and for developing performance measures. 

FAS Example of a Constraint and Associated Performance Measures 

for a Hypothetical Seafood Group

Constraint: [Seafood products are] new products for [Country X], and their 

availability and characteristics...are not known by the three major retailers. 

Also, [the retailers] are not aware of their potential consumer interest in 

these species and how they can increase their profits by introducing them.

Performance measures associated with the constraint:

• Number of retailers carrying targeted regional U.S. products on a 

regular basis

• Number of new products sampled by targeted retailers

• Number of products carried on a regular basis by targeted retailers

• Sales to targets

Source: Agralytica, Results-Oriented Management: A Guide for FAS Industry Partners

(Alexandria, Va.: 2001).
Page 28 GAO-13-740 Agricultural Trade

The country progress reports that we reviewed generally complied with 

criteria based on selected FAS guidelines for preparing progress reports35

and key attributes of successful performance measurement that we had

previously identified.36 In general, the 56 reports by MAP and FMD 

participants that we reviewed37 met five of six criteria we used for our 

analysis.38 However, 149 of the 373 performance measures in the 

sampled reports (40 percent) did not identify the methodologies used to 

assess results, as FAS guidelines require. Following are details of our 

analysis of the performance measures in the progress reports we 

reviewed, using these six criteria.

1. Constraint or opportunity has at least one outcome measure. For 

each constraint or opportunity shown in a progress report, FAS 

guidelines require that at least one performance measure be outcome

oriented rather than output oriented. FAS describes an outcome as 

showing changed behavior, with an emphasis on what was achieved 

and how participant activities have affected attitudes and consumer 

habits in the targeted market. In contrast, FAS defines an output as 

showing what was done at the activity level (e.g., two seminars 

conducted, newsletter sent to 1,000 addressees).39 The progress 

reports that we reviewed used both outcome and output measures to 

determine the impact of activities and to address the identified 

constraints and opportunities. At least one outcome measure was 

 35Agralytica, Results-Oriented Management: A Guide for FAS Industry Partners.

36GAO, Tax Administration: IRS Needs to Further Refine Its Tax Filing Season 

Performance Measures, GAO-03-143 (Washington, D.C.: Nov. 22, 2002). 

37We assessed a nongeneralizable sample of 56 progress reports, containing 378 

performance measures, which were prepared by 19 MAP and FMD participants for 

program years 2008 through 2010. Some of the reports also provided narrative updates 

on program activities in one or more of the other market development programs, as 

applicable.

38For our review, we used criteria based on the FAS guidelines that FAS marketing 

specialists use to assess the quality of participants’ country progress reports as well as on 

previous GAO work that identifies key attributes of successful performance measures (see 

GAO-03-143). For more information on our scope and methodology, see appendix I.

39FAS guidelines note that an output does not indicate change in understanding or 

attitude and should not be used as a meaningful measure of progress at either the activity 

or constraint levels. According to FAS officials, results of outcome measures usually 

reflect multiple activities and should demonstrate progress made in the market. The 

officials stated that these results inform evaluative feedback on a participant’s entire 

program and impact future strategies and activities.

Selected Participants’ Progress 

Reports Generally Reflected 

FAS Requirements and Key 

Attributes of Successful 

Performance Measurement, but 

Some Did Not Identify Methods 

Used to Assess Results
Page 29 GAO-13-740 Agricultural Trade

associated with 105 of the 115 constraints and opportunities in the 

sample (91 percent), and outcome measures constituted 260 of the 

378 performance measures (69 percent).40

2. Performance measure is clear. We assessed the clarity of the 

performance measures. Specifically, we assessed whether the 

measure’s name and definition were clearly stated and consistent with 

the numerical goal used to calculate it—a key attribute for successful 

performance measures that we previously identified.41 We found that

356 of the 378 performance measures (94 percent) in the progress 

reports that we reviewed met this criterion. 

3. Performance measure is aligned with related constraint or 

opportunity. To ensure alignment of performance measures with the 

constraints or opportunities they address, FAS guidelines state that 

each measure must directly affect the related constraint or 

opportunity, must reflect the scope of activity and progress in the 

market, and must be within the ability of the participants to influence. 

In the progress reports that we reviewed, 330 of the 378 performance 

measures (87 percent) were aligned with the related constraint or 

opportunity, and 110 of the 118 constraints and opportunities had at 

least one aligned performance measure associated with it. However, 

58 (13 percent) of the performance measures were not aligned with a 

constraint or opportunity, indicating a risk that those participants might 

measure incorrectly, or fail to measure, the impact of their activities.42

4. Performance measure is quantifiable. FAS guidelines require that 

each performance measure be quantifiable. All 378 (100 percent) of 

the measures in the sample of progress reports we reviewed were 

quantifiable, with numerical values. When a goal is measurable, FAS 

 40We were unable to determine whether 6 percent of the performance measures were 

output or outcome measures. Although FAS provides definitions for outputs and outcomes 

in its guidance, the contractors who developed the model and guidance acknowledged 

that it can be difficult to differentiate an output from an outcome.

41GAO-03-143.

42For example, if a participant’s constraint was a lack of awareness of a certain product’s 

availability in a given market, and if the related performance measure was the overall 

market share of that product, we determined that the two were not aligned. Further, if a 

performance measure attempted to measure something beyond the control of the 

participant to effectively influence, we did not consider the measure and constraint to be 

aligned. We determined that 4 percent of the performance measures were either not 

applicable or not categorizable. See appendix I for a full description of our scope and 

methodology. 
Page 30 GAO-13-740 Agricultural Trade

is better able to assess whether the participant’s performance is 

meeting expectations.

5. Performance measure has associated baselines. FAS guidelines 

state that each performance measure should have an associated 

baseline. We found that 359 of the 375 measures in our sample (96 

percent) had associated baselines, indicating that they were based on 

an initial market review and that the performance measures were 

consistent from year to year. However, we also found that the 

baselines did not appear to inform the goals for subsequent years. For 

example, one participant had a baseline of 105 buyer/seller 

introductions but set a goal of 35 for the following year. The result for 

that year—164—not only exceeded the baseline but also exceeded 

the goal by more than 468 percent, calling into question whether the 

baseline was appropriate for the performance measure.43

6. Performance measure has an identified methodology. FAS 

guidelines for reviewing country progress reports state that the reports 

must identify the methodologies used to assess results for each 

performance measure. The reports that we reviewed identified a 

methodology—that is, an information source, an approach for 

assessing results, or both—for 224 of the 373 performance measures 

(60 percent). For example, one progress report identified “[r]esults 

gathered from consumer surveys during in-store promotions” as the 

information source and the approach used to assess results of 

activities intended to increase consumer awareness. Another report 

identified the information source and the approach as “2009 results

based on 334 informal customer surveys conducted throughout the 

year” and explained how certain results were averaged to provide 

aggregated numbers. For the 149 performance measures with no 

identified methodology (40 percent), it would be difficult for FAS to 

determine the reliability of the reported results.44

Table 6 summarizes the results of our analysis of the sample of country 

progress reports that we reviewed.

 43An FAS official told us that this participant lacked a clear methodology to break the 

target data down from worldwide to specific markets, and they therefore understated it in 

this particular market for 2008. FAS continued to work with the participant and, according 

to FAS officials, the data are much more accurate for the most current reporting year.

44We did not evaluate the methodologies’ quality or reliability.
Page 31 GAO-13-740 Agricultural Trade

Table 6: Summary of GAO Analysis of Sampled Country Progress Reports 

Criterion Met criterion

Constraint or opportunity has at least one 

outcome measure.

a

105 of 115 constraints or opportunities

Performance measure is clear. 356 of 378 performance measures

Performance measure is aligned with 

related constraint or opportunity.

330 of 378 performance measures

Performance measure is quantifiable. 378 of 378 performance measures

Performance measure has associated 

baseline.

359 of 375 performance measures

Performance measure has an identified 

methodology.

224 of 373 performance measures

Source: GAO and USDA Foreign Agriculture Service.

a

Denominators vary because certain criteria were not applicable to some performance measures.

In addition, a comparison of participants’ measurable goals and reported 

results in the progress reports that we reviewed showed that those 

participants met or exceeded a combined total of 222 of 357 (62 percent) 

of their goals. However, the extent to which participants met the goals 

varied widely; some participants exceeded a goal by more than 1,000 

percent, while others attained less than 10 percent of the goal. FAS 

guidance requires that participants monitor their progress relative to their 

stated goals but has not established requirements for whether, when, or 

how participants should meet their goals. According to FAS officials, 

narratives in the progress reports should address whether and why actual 

results did or did not meet goals and what changes are needed to 

address any disparities. FAS officials noted that if an FAS marketing 

specialist reviewing a funding application notices wide discrepancies 

between the participant’s goals and results for the previous year, the 

specialist will collaborate with the participant to identify lessons that can 

be learned and will look for corresponding changes in the participant’s 

strategy for the coming year.
Page 32 GAO-13-740 Agricultural Trade

FAS requires that program participants conduct evaluations of their 

program activities when appropriate or required by FAS. Current MAP 

regulation defines a program evaluation as a review of the participant’s 

entire program or an appropriate portion of the program as agreed to by 

the participant and FAS.45 These reviews can range from external, thirdparty evaluations, such as cost-benefit analyses, to participants’ internal 

reevaluations of their approaches to market development activities. FAS 

officials reported that they received a combined total of 71 third-party 

program evaluations from 43 participants in 2010 and 2011.46

Additionally, eight of 10 U.S. agricultural export promotion groups 

surveyed by an industry contractor reported that they conducted country, 

regional, or global evaluations during the last 3 years. 

Because the program evaluations are conducted on a case-by-case basis 

and may cover only a portion of a participant’s market development 

activities (e.g., market development efforts in 1 of 20 countries where a 

participant conducts its activities), it is difficult to determine what portion 

of all market development efforts are assessed through these 

evaluations. One FAS contractor who had previously conducted thirdparty evaluations for MAP and FMD participants told us that factors such 

as the size of the participants and the value the participant places on 

monitoring and evaluation affected the frequency, depth, and usefulness 

of evaluations that his firm had conducted.47 

 457 C.F.R. § 1485.23.

46The 43 participants that provided evaluations in 2010 and 2011 included 13 of the 

participants that provided the country progress reports in our random sample. We did not 

assess the quality of the evaluations, because such an assessment was beyond the 

scope of this engagement.

47FAS officials noted that mandating a program-wide fixed frequency for evaluations 

would be overly inflexible and not always practical, since participants’ award amounts 

range in size from tens of thousands to tens of millions of dollars.

FAS Requires MAP and 

FMD Participants to 

Conduct Comprehensive 

Evaluations When 

Appropriate
Page 33 GAO-13-740 Agricultural Trade

A 2007 cost-benefit analysis of MAP and FMD, commissioned by FAS, 

found that the programs increased U.S. agricultural exports and 

benefitted the U.S. economy.48 Overall, the study asserted that the 

government’s expenditures for the two programs had resulted in greater 

increases in U.S. agricultural exports and greater benefit to the U.S. 

economy than would have occurred without the expenditures. However, 

the study’s two econometric models estimating the programs’ benefits 

have methodological limitations that may affect the accuracy of the 

estimates. First, the model used to estimate changes in market share 

omitted important variables, and, second, a sensitivity analysis of key 

assumptions was not conducted for that and another model that the study 

used. FAS officials reported that they plan to commission a new costbenefit analysis in 2014 but indicated that they have not yet identified the 

methodologies that the new analysis will use. 

The 2007 cost-benefit analysis, conducted by Global Insight, Inc., found 

that MAP and FMD had positive effects on agricultural export activities. 

The study also asserted that without public-sector funding, the private 

sector would under invest in agricultural market development, negatively 

affecting the U.S. economy—an outcome known as market failure.49 The 

study used data from fiscal years 2002 through 2006 to estimate the 

economic effects of FAS’s program expenditures under the 2002 farm bill

 48Global Insight, Inc., Cost-Benefit Analysis of USDA’s Export Market Development 

Programs, 2007. In 2010, FAS commissioned Global Insight to perform an updated 

analysis, using data for 2002 through 2008 (IHS Global Insight [USA], Inc., “A Cost-Benefit 

Analysis of USDA’s International Market Development Programs,” March 2010). The 2010 

update’s conclusions are similar to those of the 2007 study; however, the 2010 update 

does not include an explanation of its results and methodology and instead refers to this 

information in the 2007 study. For that reason, we focused our review on the 2007 study.

49The 2007 study asserts that several types of market failure would, absent U.S. 

government funding for agricultural market development, cause the private sector to under 

invest in market development and have negative impacts on the U.S. economy. A market 

failure is commonly defined as a situation in which an unregulated competitive market is 

inefficient, because prices fail to provide proper signals to consumers and producers. In 

the presence of a market failure, the government can intervene and provide policy through 

regulation, taxes, or subsidies to bring the market to equilibrium. See appendix IV for more 

information.

FAS Cost-Benefit 

Analysis Asserts That 

MAP and FMD Benefit 

U.S. Economy, but 

Methodological 

Limitations May 

Affect the Magnitude 

of Estimated Benefits

FAS-Commissioned CostBenefit Analysis Asserted 

Benefits of Market 

Development Programs 
Page 34 GAO-13-740 Agricultural Trade

and of FAS’s possible expenditures under a hypothetical 2007 farm bill.

50

Following are key estimates from the 2007 study.

• The study estimated that the increased market promotion and 

development funding authorized for MAP and FMD in the 2002 farm 

bill—almost doubling from roughly $125 million in fiscal year 2001, 

before the bill’s enactment, to approximately $234 million in fiscal year 

2006—raised the U.S. share of global agricultural exports from 18 

percent to 19 percent, equivalent to a $3.8 billion increase in trade. 

The study estimated that as a result, economic welfare increased by 

$828 million.51 

• The study estimated that if annual MAP and FMD spending under the 

hypothetical 2007 farm bill in fiscal years 2007 through 2015 were 

equivalent to spending under the 2002 farm bill in fiscal year 2006, the 

U.S. share of global agricultural exports would rise from 19 percent in 

2007 to 20.9 percent in 2015—equal to $84 billion in U.S. exports in 

2015. If spending under the hypothetical 2007 farm bill increased by 

50 percent over the 2006 level, U.S. exports would increase to $86.4 

billion in 2015 and economic welfare would increase by $740 million. 

On the other hand, the study suggested that if the hypothetical bill did 

not authorize funding for the two programs, U.S. exports would grow 

to $75.5 billion by 2015 and economic welfare would decrease by 

$1.1 billion.

• The study found that market development promotions for certain U.S. 

high-value commodities have a positive effect—known as a spillover 

effect—on exports of other U.S. high-value commodities.52

• The study estimated that every dollar spent for agricultural market 

development under the 2002 farm bill increased economic welfare by 

$5.20; under the hypothetical 2007 bill, every dollar would increase 

 50See the Farm Security and Rural Investment Act of 2002, Pub. L. No. 107-17, 116 Stat. 

134 (commonly referred to as the 2002 Farm Bill). Typically, the farm bill is reauthorized 

every 5 years. At the time of the 2007 Global Insight study, the 2002 bill had not yet been 

reauthorized. As a result, the study postulated a hypothetical 2007 farm bill under three 

different scenarios. 

51Economic welfare can be defined as the well-being of society due to the production and 

consumption of goods and services.

52The 2007 study refers to the spillover effect as a “halo effect.”
Page 35 GAO-13-740 Agricultural Trade

economic welfare by $4.10. In contrast, eliminating the funding would 

reduce economic welfare by $4.30 per eliminated dollar, resulting in a 

$1.1 billion loss to the U.S. economy. 

Two models that Global Insight used to estimate the effects of MAP and 

FMD on the U.S. economy have methodological limitations that may 

affect the models’ ability to accurately estimate the programs’ benefits to 

the U.S. economy. As with any study using economic models, the lack of 

data forces researchers to make certain assumptions, and the resulting 

estimates are affected by the methodologies chosen and the assumptions 

used. In general, the 2007 study assumes that FAS program 

expenditures lead to an increase in private-sector expenditures. To 

estimate the economic effects of the program assistance, the 2007 study 

employed two economic models commonly used in cost-benefit analysis: 

(1) A market share model to estimate the effect of expenditures under the 

2002 farm bill and the hypothetical 2007 farm bill on the U.S. agricultural 

market share of global markets and (2) a spillover effect model to 

estimate increases in U.S. agricultural exports due to promotions of other 

U.S. exported commodities.53 However, these models have limitations 

that may affect their ability to accurately estimate the economic benefits 

of MAP and FMD. FAS officials reported that they plan to commission a 

new cost-benefit analysis in fiscal year 2014, but they indicated that they 

have not yet identified the methodologies that the new study will use.

To examine the effect of the 2002 farm bill and the potential effect of the 

hypothetical 2007 farm bill, the 2007 study used a U.S. market share 

model to simulate the market share for U.S. high-value and bulk 

commodities in global markets from 1975 through 2004.54 However, the 

model has limitations related to its exclusion of important variables and its 

lack of a sensitivity analysis of key assumptions.

 53The 2007 study uses a computable general equilibrium model to analyze the impact of 

MAP and FMD on the larger farm economy and other segments of the U.S. economy. See 

appendix V for a description of this analysis. 

54According to the study, USDA classification for bulk commodities includes wheat, 

soybeans, cotton, and other commodities while high-value products include wine and 

beer, snack foods, red meat, fresh or processed fruits and vegetables, nursery products, 

and other processed, ready-to-eat products.

Economic Models Used to 

Estimate MAP’s and FMD’s 

Benefits Have Limitations 

That May Affect Estimates’ 

Accuracy 

Market Share Model 
Page 36 GAO-13-740 Agricultural Trade

Excluded Variables 

The 2007 study’s use of the market share model controlled for four 

variables across each year: (1) the U.S. market share in the previous 

year, (2) the currency exchange rate, (3) combined FAS program 

expenditures and participants’ contributions over time,55 and (4) a time 

trend to account for any omitted variables. However, the model excludes 

some variables that could be important for determining the U.S. market 

share—in particular, industry-specific variables such as commodity 

prices, production volumes, and number of export competitors.56 Although 

the study states that a linear trend variable is included as a proxy for 

missing variables in the model, this variable cannot be expected to 

capture the full effects of such industry-specific variables. By limiting the 

model to the four variables, the study may bias the effect of these 

variables by incorrectly identifying the magnitude of these variables and 

the statistical significance of their effect on U.S. market shares.

Lack of Sensitivity Analysis 

The 2007 study used the market share model to examine the possible 

effects of the hypothetical 2007 farm bill under three scenarios.57

 55By combining FAS and participant expenditures, the market share model in the 2007 

study estimated the effect of total expenditures on U.S. market shares, in contrast with 

models found in the literature. As a result, it is not possible to separate or compare the 

effect of FAS expenditures versus private sector expenditures of marketing programs on 

U.S. exports.

56This limitation is known as omitted variable bias. 

57In addition to estimating the hypothetical 2007 farm bill’s effects on U.S. agricultural 

exports, the 2007 study used the market share model to examine the 2002 farm bill’s 

effects on U.S. exports from 2002 through 2020 under two scenarios. The first scenario 

involved actual FAS program expenditures set by the 2002 farm bill that gradually 

increased over a 5-year period and actual participant promotion expenditures that also 

increased over time. The second scenario assumed constant FAS program expenditures 

and participant expenditures that were set at the fiscal year 2001 levels. Both scenarios 

assumed that the FAS program expenditures and participant expenditures would revert to 

the 2001 levels after 2007. After comparing the two scenarios, the study concluded that 

every dollar of FAS program expenditure had a return of $25 in agricultural export gains. 

The study further estimated that, absent increased FAS funding for the two market 

development programs, households would need to be compensated by a total $828 

million by 2020 because of the loss of U.S. exports. 
Page 37 GAO-13-740 Agricultural Trade

1. The first scenario assumed that FAS program expenditures and 

participant contributions would remain constant. On the basis of these 

assumptions, the study predicted that U.S. exports would increase 

from $65 billion in 2006 to $84 billion in 2015. 

2. The second scenario assumed that FAS would increase program 

expenditures and that participants would increase their contributions 

gradually, spending 50 percent more by 2012 than in 2007. On the 

basis of these assumptions, the study predicted that U.S. exports 

would increase from $65 billion in 2006 to about $86 billion in 2015. 

3. The third scenario assumed that FAS would immediately eliminate 

program expenditures in 2008 and that, as a result, participants would 

spend less of their own resources on market development, gradually 

decreasing their spending by 50 percent by 2012 compared with 

2007. On the basis of these assumptions, the study predicted that 

U.S. exports would increase from $65 billion in 2006 to $75.5 billion in 

2015. 

Following Office of Management and Budget guidelines for conducting a 

cost-benefit analysis,58 the study included a sensitivity analysis of the 

market share model’s predictions, assessing the level of confidence in the 

predictions with a 95 percent confidence interval.59 However, the study 

did not include a sensitivity analysis of the third scenario’s assumption 

regarding participants’ response to the elimination of FAS funding.60 In 

particular, the study did not examine the effects that a range of 

participants’ responses to the elimination of FAS funding would have on 

the U.S. market share. That is, the study did not consider whether 

participants’ market development spending would remain constant, would 

decrease at lower rates than the 50 percent that the study assumed, or 

would increase to the level of the eliminated FAS expenditures. Best 

practices for cost estimation dictate the inclusion of a sensitivity analysis 

 58Office of Management and Budget, Circular A-94, “Guidelines and Discount Rates for 

Benefit-Cost Analysis of Federal Programs” (Oct. 29, 1992), accessed July 15, 2013, 

http://www.whitehouse.gov/omb/circulars_a094.

59With an average prediction error of less than 5 percent, the study concluded that the 

market share model was a good fit for the data used.

60The 2007 study also did not conduct a sensitivity analysis of the second scenarios’

assumption that FAS expenditures and participant contributions would both increase by 50 

percent by 2012. 
Page 38 GAO-13-740 Agricultural Trade

to ascertain the effect of the assumption on the results.61 For a sensitivity 

analysis to reveal the effect of a changed assumption on a cost estimate, 

the analysis must examine the effect of changing one assumption while 

holding all other assumptions and variables constant. In addition, the 

study did not provide any insight or data to support the assumption that 

participants would reduce their spending if FAS program funding were 

eliminated.

The 2007 study used a spillover effect model to test the assumption that 

increasing the market promotion of one U.S. commodity has a positive 

effect on exports of other U.S. commodities. The study found that the 

effects of the relationships between commodity promotions and exports 

ranged from positive to negative and varied in magnitude but that, overall, 

the positive effects outweighed the negative effects. The model examined 

the relationship between U.S. market promotions and exports for four 

high-value products—almonds, apples, grapes, and wine—for the period 

1985 through 2004.62 For example, increased U.S. promotion of almonds 

led to increased U.S. exports of grapes but to decreased exports of wine 

and had no effect on apple exports. Conversely, increased U.S. 

promotion of grapes led to decreased U.S. exports of almonds but to 

increased exports of apples and wine.63

Although the study estimated the size of the spillover effect, it did not 

include a sensitivity analysis of a key assumption used for this estimate. 

The study assumed that some type of market development as a result of 

U.S. market promotions occurs in 64 percent of all markets for U.S. 

 61GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: Mar. 2, 2009).

62The study did not explain why the spillover effect model excluded bulk commodities from 

the analysis.

63According to Office of Management and Budget officials, the spillover effect differs from 

a multiplier effect and should be considered a positive externality. Moreover, the spillover 

effect differs from the multiplier effect in that no increased income from other industries 

causes them to increase their purchases of other items. For example, increase in demand 

abroad for U.S. wines is a direct effect of market promotion, but it is a positive externality if 

that promotion results in higher demand for other agricultural products. The spillover effect 

occurs if the promotion of U.S. wine causes consumers’ improved perceptions of wine to 

increase their desire to buy U.S. apples. 

Spillover Effect Model
Page 39 GAO-13-740 Agricultural Trade

exports.64 To estimate the spillover effect of FAS market promotions, the 

model used this assumption, unsupported by data or industry evidence, 

as well as the estimated effects of promotions of one commodity on the 

exported quantities of other commodities.65 According to the study, the 

spillover effect of FAS market promotions ranges from 24 percent to 54 

percent of the total growth in overall market development. However, the 

study did not include a sensitivity analysis of the effect of changing the 

assumption that development occurs in 64 percent of markets as a result 

of U.S. market promotions. That is, the study did not examine the extent 

to which assuming a higher or lower percentage of market development 

would change the magnitude of the estimated spillover effect. 

For many years, MAP and FMD—the two programs that receive most of 

USDA’s market development funding—have provided continuing 

assistance to an established pool of agricultural trade associations, 

primarily to promote generic commodities overseas. FAS has developed 

a performance monitoring framework in which FMD and MAP participants 

are expected to develop measurable objectives—that is, constraints and 

opportunities—linked to performance measures that allow them to 

annually compare their results with established baselines and goals. 

Participants generally followed this framework successfully; however, 

many of the participants’ annual country progress reports that we 

reviewed did not identify, as FAS guidelines require, the methodologies 

used to assess results for each performance measure. These gaps limit 

FAS’s ability to determine the reliability of program results reported by 

participants and to accurately assess participants’ progress and success 

in achieving program objectives. 

The 2007 cost-benefit analysis that FAS commissioned asserted that 

MAP and FMD have increased U.S. exports and benefited the U.S. 

economy. However, one econometric model that the study used to 

 64The study based this assumption on an assumption that U.S. market promotions result 

in some type of market development in 80 percent of the U.S. export markets for 80 

percent of U.S. products. The study did not state whether the U.S. export markets were 

strictly U.S. agricultural export markets or export markets for all U.S. products. In addition, 

the study did not define “market development,” which could include increased consumer 

awareness, increased exports, or increased promotional events and materials, among 

other effects.

65The study referred to this effect as cross-promotion elasticity.

Conclusions
Page 40 GAO-13-740 Agricultural Trade

estimate the programs’ effects excluded variables that have significant 

impact on U.S. market shares. As a result, the model may bias the 

estimates of the variables that it included. In addition, because another 

model that the study used did not include a sensitivity analysis of certain 

assumptions, it is not possible to determine the degree to which those 

assumptions would affect the model’s results. For example, one scenario 

assumed that if FAS suddenly eliminated all MAP and FMD expenditures, 

participants would reduce their own spending on market development by 

50 percent. However, the study does not examine the effects of 

participants’ other possible responses to the elimination of FAS 

expenditures, such as maintaining their spending or increasing it to 

compensate for the eliminated FAS funds. Accurate cost benefit analyses 

help decision makers determine how best to allocate program funding 

and provide a better picture of the potential effect on U.S. exports and the 

economy if funding is increased or decreased. 

We recommend that the Secretary of Agriculture direct FAS to take the 

following three actions:

To improve MAP and FMD participants’ annual reporting of the results of 

their market development activities,

• use appropriate means to emphasize the importance of 

participants’ identifying the methodologies used to assess results 

for each performance measure in their annual country progress 

reports.

To improve the accuracy of future cost-benefit analyses of FAS’s market 

development programs, 

• ensure that any econometric model used for the cost-benefit 

analysis, such as the market share model, includes industryspecific variables that could have a significant role in determining 

the U.S. market share—for example, commodity prices, 

production volumes, and number of export competitors; and

• conduct a sensitivity analysis, in accordance with best practices 

for cost estimates, of the key assumptions that are applied in any 

economic models used in the cost-benefit analysis, such as the 

market share model and spillover effect model.

Recommendations for 

Executive Action
Page 41 GAO-13-740 Agricultural Trade

USDA provided written comments about a draft version of this report, 

concurring with our findings and recommendations (see app. VI for a copy 

of these comments). USDA also provided technical comments, which we 

incorporated as appropriate.

As agreed with your office, we plan no further distribution until 30 days 

from the report date. At that time, we will send a copy to USDA. In 

addition, the report will be available at no charge on the GAO website at 

http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-4802 or evansl@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff who made significant contributions to this 

report are listed in appendix VII.

Sincerely yours,

Lawrance Evans Jr.

Director, International Affairs and Trade

Agency Comments
Appendix I: Objectives, Scope, and 

Methodology

Page 42 GAO-13-740 Agricultural Trade

We were asked to review several aspects of the U.S. Department of 

Agriculture’s (USDA) five market development programs, which USDA’s 

Foreign Agriculture Service (FAS) administers. This report (1) describes 

participation and expenditures in these market development programs, 

particularly the Market Access Program (MAP) and Foreign Market 

Development Program (FMD); (2) examines FAS’s management and 

monitoring of its market development programs; and (3) assesses FAS’s 

cost-benefit analysis of MAP’s and FMD’s impact on the U.S. economy. 

Because MAP and FMD receive most of USDA’s market development 

funding, we focused our review primarily on program participation in those 

two programs.

For our first and second objectives, we selected five program participants 

as case studies: the American Hardwood Export Council, the California 

Table Grape Commission, the Wine Institute, Cotton Council 

International, and the Western United States Agricultural Trade 

Association. To select the four commodity group participants, we 

examined market development program expenditure data for 2002 

through 2011. We chose participants that used more than one market 

development program and had spent a significant amount of their market 

development funds in the two countries—Japan and Mexico—that we 

selected for our review. The four groups consisted of at least one bulk 

commodity group, one nonfood commodity group, and one high-value 

commodity group, and one horticultural group. All four were MAP 

participants, and two were also FMD participants. In addition, we included 

one of four state regional trade groups in our sample, because these 

groups allocate the majority of MAP funds to small businesses for 

branded product promotion. We reviewed additional documents, including 

agreement letters, strategic plans, country progress reports, program 

evaluations, and other information provided by FAS and the participants. 

We also interviewed U.S.-based headquarters staff from each of the five 

organizations. Additionally, we conducted fieldwork in Japan and Mexico, 

interviewing FAS staff in the Agricultural Trade Offices in Tokyo, Osaka, 

and Mexico City, as well as representatives of program participants in 

each country. We also observed several trade promotion activities and 

visited retailers where U.S. products were sold. We selected Japan and 

Mexico because they are in different geographic regions and are among 

the countries where program participants have spent the largest shares of 

USDA market development funds. In addition, for all of three of our 

objectives, we interviewed FAS staff in headquarters, contractors that 

FAS uses for aspects of its market promotion programs, and subject 

matter experts in the field of trade economics. We also reviewed relevant 

laws, regulations, and FAS guidelines. 

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 43 GAO-13-740 Agricultural Trade

To describe agricultural groups’ participation in FAS’s five market 

development programs and the programs’ expenditures from 2002 

through 2011—our first objective—we reviewed program participants’ 

applications, country progress reports, and program evaluations to 

identify examples of the activities that participants undertook with market 

development funding. We also analyzed expenditure data for the five 

programs from 2002 through 2011 to understand the nature of program 

participation and to identify program participants with the largest 

expenditures as well as changes in participants’ expenditures. We 

reviewed MAP and FMD expenditure data by country to determine where 

participants spent the largest amounts of program funding. Further, we 

compared participants’ matching contributions with their expenditure 

levels to determine whether participants were meeting program costsharing requirements. In addition, we reviewed expenditure data for the 

MAP branded products program for 2002 through 2011 to determine the 

scope of the branded products program, including the number of small 

businesses participating and the number affected by the 5-year 

graduation requirement. To assess the reliability of market development 

program expenditure and contribution data that FAS provided, we 

conducted electronic and manual data testing and held interviews with 

knowledgeable USDA staff members. On the basis of our assessment of 

the data and our interviews with the staff members, the data appear to be 

reliable for the purposes of this report. 

To examine FAS’s management and monitoring of the market 

development programs—part of our second objective—we discussed 

management practices and the use of the Unified Export Strategy (UES) 

system, which participants use to apply for multiple programs to reduce 

risks of overlap and duplication among the five programs with FAS 

officials. We also met with FAS’s Compliance Review Branch to review 

FAS’s process for verifying participants’ expenditures and contributions 

for all programs in which they participated. In addition, to verify that small 

businesses participating in the MAP branded products program did not 

receive MAP funds from more than one MAP participant for promotion in

the same country, we reviewed expenditure data for the MAP branded 

products program for 2011.1

 We examined all businesses that had spent 

MAP funds, the countries where they spent the funds, and the MAP 

 1

According to FAS, small businesses should not obtain MAP funds from more than one 

MAP participant to promote the same brand name product in the same country. They may 

use funds from a second MAP participant to promote a product in a different country.
Appendix I: Objectives, Scope, and 

Methodology

Page 44 GAO-13-740 Agricultural Trade

participants that allocated these funds to the businesses through the 

branded products program. We identified, and reviewed with FAS, any

instances in which a business may have spent in a single country funds 

received from two MAP participants. 

To determine whether MAP and FMD participants were assessing results 

in accordance with FAS performance monitoring guidelines—also part of 

our second objective—we developed an assessment tool to analyze a 

sample of participants’ annual country progress reports. We selected a 

random but nongeneralizable sample of 20 participants in MAP and FMD, 

and we identified countries where these participants spent more than 

$5,000 in 3 consecutive fiscal years, 2008 through 2010. We requested 

the country progress reports for all 20 participants for each of the 3 

years—a total of 60 progress reports. After requesting the 60 reports, we 

removed four groups on being informed that those groups use other 

forms of reporting; we also removed two state regional trade groups. After 

we requested additional randomly selected progress reports, our final 

sample totaled 56 reports. Where progress reports covered a region 

rather than a specific country, we used regional data and country-specific 

data as available. We selected criteria, based on FAS guidelines for 

developing the progress reports2 and key attributes of successful 

performance measurement that we previously identified,3 to assess 

constraints and performance measures in the reports that we reviewed. 

These criteria are as follows: (1) each constraint has at least one 

outcome measure; (2) the performance measure is clear; (3) the 

performance measure is aligned with the related constraint or opportunity; 

(4) the performance measure is quantifiable; (5) the performance 

measure has an associated baseline; and (6) the performance measure 

has an identified methodology. We also compared the goals and results 

reported for each performance measure to determine the extent to which 

the goals were met and the results were reported. We recorded each 

constraint and performance measure from the country progress reports 

we reviewed, and two reviewers coded separate analyses for each 

criterion. The two analyses were then reconciled to produce a final result. 

In addition, we requested from FAS all third-party program evaluations 

 2

Agralytica, Results-Oriented Management: A Guide for FAS Industry Partners (Arlington, 

Va.: 2001).

3

GAO, Tax Administration: IRS Needs to Further Refine Its Tax Filing Season 

Performance Measures, GAO-03-143 (Washington, D.C.: Nov. 22, 2002).
Appendix I: Objectives, Scope, and 

Methodology

Page 45 GAO-13-740 Agricultural Trade

associated with our random sample of participants and countries in the 3-

year timeframe. FAS informed us that the evaluations were too difficult to 

identify using these parameters and provided a list of 71 evaluations that 

43 participants, including 13 of those in our sample, submitted in 2010 

and 2011. We did not assess the quality of the evaluations, because such 

an assessment was beyond the scope of this engagement.

To assess FAS’s cost-benefit analysis of MAP’s and FMD’s impact on the 

U.S. economy—our third objective—we analyzed studies of MAP and 

FMD commissioned by FAS and published in 2007 and 2010, 

respectively, by Global Insight, Inc.4 We conducted structured interviews 

with the studies’ authors, agency officials, and academics involved in the 

studies. We also reviewed relevant research on market development 

programs. In addition, we reviewed Office of Management and Budget

guidelines for conducting cost-benefit analyses and interviewed office 

officials.5 We evaluated the studies on the basis of GAO’s cost estimation 

guide,6 prior related GAO work,7 and internal expertise.

We conducted this performance audit from August 2012 to July 2013 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

 4

Global Insight, Inc., Cost-Benefit Analysis of USDA’s Export Market Development 

Programs, 2007. IHS Global Insight (USA), Inc., “A Cost-Benefit Analysis of USDA’s 

International Market Development Programs,” March 2010.

5

Office of Management and Budget, Circular A-94, “Guidelines and Discount Rates for 

Benefit-Cost Analysis of Federal Programs” (Oct. 29, 1992), accessed July 15, 2013, 

http://www.whitehouse.gov/omb/circulars_a094.

6

GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: Mar. 2, 2009).

7

GAO, Agricultural Trade: Changes Made to Market Access Program, but Questions 

Remain on Economic Impact, NSIAD-99-38 (Washington, D.C.: Apr. 5, 1999).
Appendix II: USDA Market Development 

Program Recipients and Award Amounts in 

Fiscal Year 2012

Page 46 GAO-13-740 Agricultural Trade

Many organizations participate in more than one of the five U.S. 

Department of Agriculture (USDA) market development programs. FAS 

allocates the majority of USDA’s market development funding for the 

Market Access Program (MAP), which has the largest number of 

participants. Table 7 shows the 103 program participants and their award 

amounts in fiscal year 2012, in descending order of total award amounts. 

The table does not show small businesses that received a share of MAP 

funding indirectly for branded product promotion.

Table 7: Market Development Program Participants and Total Awards in Fiscal Year 2012, in Descending Order of Total Award 

Amounts

Dollars in thousands

Participants MAP FMD EMP TASC QSP Total

1 Cotton Council International $18,954 $4,177 $23,131 

2 U.S. Meat Export Federation $19,704 $1,427 $21,131 

3 AHEC, APA, SEC, SFPA $9,116 a $2,548 $11,664 

4 U.S. Wheat Associates $6,093 $5,150 $338 $46 $11,627 

5 U.S. Grains Council $7,341 $3,877 $261 $11,479 

6 Food Export Association of the Midwest USA $11,195 $11,195 

7 Western United States Agricultural Trade Association $9,970 $9,970 

8 American Soybean Association $3,562 $5,392 $501 $9,455 

9 Food Export USA Northeast $9,362 $9,362 

10 Wine Institute $6,938 $6,938 

11 USA Poultry and Egg Export Council $5,001 $1,266 $209 $6,476 

12 National Potato Promotion Board $4,767 $335 $45 $460 $5,607 

13 Southern United States Trade Association $4,818 $199 $5,017 

14 U.S. Dairy Export Council $4,161 $554 $120 $4,835 

15 Florida Department of Citrus $4,590 $4,590 

16 Washington Apple Commission $4,509 $4,509 

17 USA Rice Federation/U.S. Rice Producers Association $2,785 $1,532 $106 $4,423 

18 California Walnut Commission $4,164 $75 $4,239 

19 Alaska Seafood Marketing Institute $4,076 $4,076 

20 Foreign Agricultural Service, USDA (multiple projects) $3,734 $3,734 

21 Blue Diamond Growers/Almond Board of California $3,354 $300 $35 $3,689 

22 California Table Grape Commission $3,506 $3,506 

23 American Peanut Council $2,361 $603 $82 $3,046 

24 Pear Bureau Northwest $2,866 $113 $2,979 

25 Raisin Administrative Committee $2,493 $2,493 

Appendix II: USDA Market Development 

Program Recipients and Award Amounts in 

Fiscal Year 2012
Appendix II: USDA Market Development 

Program Recipients and Award Amounts in 

Fiscal Year 2012

Page 47 GAO-13-740 Agricultural Trade

Dollars in thousands

Participants MAP FMD EMP TASC QSP Total

26 Sunkist Growers, Inc. $2,232 $2,232 

27 California Prune Board $2,209 $2,209 

28 Cranberry Marketing Committee $1,514 $200 $384 $24 $2,122 

29 U.S. Livestock Genetics Exports, Inc. $1,000 $607 $87 $174 $1,867 

30 National Renderers Association $813 $801 $1,614 

31 Washington State Fruit Commission $1,551 $1,551 

32 National Sunflower Association $1,163 $254 $1,418 

33 U.S. Dry Bean Council $1,130 $109 $168 $1,406 

34 Pet Food Institute $1,345 $1,345 

35 National Confectioners Association $1,335 $1,335 

36 Bryant Christie, Inc. $1,295 $1,295 

37 U.S. Apple Export Council $963 $223 $1,186 

38 USA Dry Pea and Lentil Council $806 $166 $154 $14 $1,140 

39 National Association of State Departments of 

Agriculture

$1,091 $1,091

40 Welch Foods, Inc. $845 $83 $928 

41 California Strawberry Commission $920 $920 

42 Northwest Wine Promotion Coalition $872 $872 

43 Cal-Pure Pistachios/Western Pistachio Association $845 $845 

44 Ginseng Board of Wisconsin $200 $348 $225 $774 

45 Intertribal Agriculture Council $706 $706 

46 American Sheep Industry Association $175 $156 $320 $652 

47 California Agricultural Export Council $318 $300 $618 

48 California Cherry Advisory Board $608 $608 

49 Chapman University $565 $565 

50 Idaho Potato Commission/ Idaho State Department of 

Agriculture

$540 $540 

51 Cooperative Resources International $531 $531 

52 California Strawberry Nurserymen's Association $520 $520 

53 California Cherry Marketing and Research Board $502 $502 

54 California Citrus Mutual $500 $500 

55 California Cling Peach Board $447 $447 

56 Organic Trade Association $435 $435 

57 New York Wine and Grape Foundation $408 $408 

58 Brewers Association Inc. $401 $401 

59 American Biomass Trade Cooperative $157 $200 $357 

60 World Wide Sires, Ltd. $354 $354 
Appendix II: USDA Market Development 

Program Recipients and Award Amounts in 

Fiscal Year 2012

Page 48 GAO-13-740 Agricultural Trade

Dollars in thousands

Participants MAP FMD EMP TASC QSP Total

61 The Popcorn Board $344 $344 

62 Synergistic Hawaii Agriculture Council $330 $330 

63 Napa Valley Vintners $311 $311 

64 Distilled Spirits Council $258 $45 $303 

65 California Pear Advisory Board $265 $25 $290 

66 American Seed Trade Association $84 $203 $287 

67 Mohair Council of America $32 $16 $235 $283 

68 The Catfish Institute $280 $280 

69 National Pecan Growers Council $271 $271 

70 Oregon Department of Agriculture $271 $271 

71 Alaska Agricultural Development and Marketing $268 $268 

72 California Fresh Tomato Growers/Florida Tomato 

Committee $265 

$265 

73 Cherry Marketing Institute $204 $30 $30 $264 

74 JBC International, Inc. $255 $255 

75 National Watermelon Promotion Board $245 $245 

76 International Food Information Council Foundation $241 $241 

77 U.S. Hide, Skin & Leather Association $77 $90 $60 $226 

78 Citrus Research Board $222 $222 

79 U.S. Hop Plant Protection Committee $212 $212 

80 Agricultural Research Service, USDA $210 $210 

81 Hawaii Papaya Industry Association $198 $198 

82 University of Alaska $181 $181 

83 Hop Growers of America $175 $5 $180 

84 Leather Industries of America $159 $159 

85 California Table Grape Export Association $153 $153 

86 American Pistachio Growers/Cal-Pure Pistachios Inc. $150 $150 

87 University of Maryland $132 $132 

88 Minnesota Department of Agriculture $108 $108 

89 Promar Consulting $106 $106 

90 Texas Produce Export Association $98 $98 

91 California Grape & Tree Fruit League $97 $97 

92 International Center for Aquaculture and Aquatic 

Environments, Auburn University

$85 $85 

93 North Carolina State University $84 $84 

94 National Hay Association $17 $47 $64 

95 Independent Grocers Alliance Institute, Inc. $64 $64 
Appendix II: USDA Market Development 

Program Recipients and Award Amounts in 

Fiscal Year 2012

Page 49 GAO-13-740 Agricultural Trade

Dollars in thousands

Participants MAP FMD EMP TASC QSP Total

96 North American Millers Association $58 $58 

97 World Food Logistics $57 $57 

98 Minor Crop Farmer Alliance $34 $34 

99 Animal and Plant Health Inspection Service, USDA $25 $25 

100 Potato Variety Management Institute $22 $22 

101 Northwest Horticultural Council $22 $22 

102 Western Growers $14 $14 

103 Economic Research Service, USDA $14 $14 

Total $182,989 $29,693 $9,556 $6,803 $1,908 $230,949

Source: GAO analysis of USDA data.

Notes: 

Numbers in columns and rows may not sum to totals because of rounding.

Some participants in the Emerging Markets Program (EMP), Quality Samples Program (QSP), and 

Technical Assistance for Specialty Crops Program (TASC) received multiple awards for specific 

projects. In those instances, the sum of each participant’s awards for each program is shown.

MAP = Market Access Program

FMD = Foreign Market Development Program

EMP = Emerging Markets Program

QSP = Quality Samples Program

TASC = Technical Assistance for Specialty Crops Program

a

The American Hardwood Export Council (AHEC), the Engineered Wood Association (APA), the 

Softwood Export Council (SEC), and the Southern Forest Products Association (SFPA) collectively 

submit single applications for MAP and FMD awards.
Appendix III: Expenditures in 2011 for the 

Emerging Markets Program, Quality Samples 

Program, and Technical Assistance for 

Specialty Crops Program

Page 50 GAO-13-740 Agricultural Trade

Tables 8 through 10 show USDA market development program 

participants that spent the largest amounts of funds provided by the 

Emerging Markets Program (EMP), Quality Samples Program (QSP), and 

Technical Assistance for Specialty Crops Program (TASC) funds in 2011. 

Table 11 shows the countries where the largest amounts of funding for 

the three programs were spent in 2011.

Table 8: Program Participants with Largest Expenditures for Emerging Markets 

Program (EMP) in 2011 

Dollars in thousands

Participant ranking by expenditure amount EMP expenditures

1 World Wide Sires $819

2 USA Poultry and Egg Export Council 362

3 American Soybean Association 253

4 U.S. Wheat Associates 170

5 U.S. Dry Bean Council 155

6 American Legend Cooperative 130

7 California Milk Advisory Board 126

8 Texas Tech University 106

9 University of Georgia 102

10 Pear Bureau Northwest 87

Participants’ total EMP expenditures

(percentage of all EMP participants’ expenditures)

$2,309

(79%)

All EMP participants’ expenditures $2,906

Source: GAO analysis of USDA data.

Notes: 

Twenty-five organizations expended EMP funds in 2011.

Numbers in columns may not sum to totals because of rounding.

Data shown are as of September 25, 2012.

Appendix III: Expenditures in 2011 for the 

Emerging Markets Program, Quality Samples 

Program, and Technical Assistance for Specialty 

Crops Program
Appendix III: Expenditures in 2011 for the 

Emerging Markets Program, Quality Samples 

Program, and Technical Assistance for 

Specialty Crops Program

Page 51 GAO-13-740 Agricultural Trade

Table 9: Program Participants with Largest Expenditures for Quality Samples 

Program (QSP) in 2011 

Dollars in thousands

Participant ranking by expenditure amount QSP expenditures

1 California Agricultural Export Council $345

2 National Potato Promotion Board 157

3 National Pecan Growers Council 75

4 U.S. Livestock Genetics Export, Inc. 60

5 U.S. Wheat Associates 53

6 Mohair Council of America 35

7 California Walnut Commission 25

8 American Soybean Association 22

9 California Milk Advisory Board 15

10 Alaska Seafood Marketing Institute 15

Participants’ total expenditures 

(percentage of all QSP participants’ expenditures)

$802

(96%)

All QSP participants’ expenditures $839

Source: GAO analysis of USDA data.

Notes: 

Fifteen organizations expended QSP funds in 2011. 

Numbers in columns may not sum to totals because of rounding.

Data shown are as of September 25, 2012.
Appendix III: Expenditures in 2011 for the 

Emerging Markets Program, Quality Samples 

Program, and Technical Assistance for 

Specialty Crops Program

Page 52 GAO-13-740 Agricultural Trade

Table 10: Program Participants with Largest Expenditures for Technical Assistance 

for Specialty Crops Program (TASC) in 2011 

Dollars in thousands

Participant ranking by expenditure amount TASC expenditures

1 California Grape & Tree Fruit League $460

2 Washington Tree Fruit Research Commission 334

3 California Olive Oil Council 252

4 Chapman University 221

5 Bryant Christie 169

6 Florida Department of Citrus 167

7 U.S. Hop Industry Plant Protection Committee 146

8 Indian River Citrus League 139

9 California Table Grape Commission 125

10 Idaho State Department of Agriculture 123

Participants’ total expenditures

(percentage of all TASC participants’ expenditures)

$2,136

(79%)

All TASC participants’ expenditures $2,717

Source: GAO analysis of USDA data.

Notes: 

Twenty-one organizations expended TASC funds in 2011. 

Numbers in columns may not sum to totals because of rounding.

Data shown are as of September 25, 2012.
Appendix III: Expenditures in 2011 for the 

Emerging Markets Program, Quality Samples 

Program, and Technical Assistance for 

Specialty Crops Program

Page 53 GAO-13-740 Agricultural Trade

Table 11: Countries Where Largest Amounts of Emerging Markets Program (EMP), 

Quality Samples Program (QSP), and Technical Assistance Specialty Crops 

Program (TASC) Funds Were Spent in 2011 

Dollars in thousands

Country ranking by share of 

expenditures Expenditures

Share of total 

expenditures

EMP

1 United States $802 28%

2 China 539 19

3 Nigeria 293 10

4 Burkina 253 9

5 Afghanistan 116 4

6 South Africa 110 4

7 Dominican Republic 83 3

8 India 81 3

9 Turkey 67 2

10 Sri Lanka 58 2

Total $2,401 83%

QSP

1 China $284 34%

2 India 75 9

3 Thailand 67 8

4 Mexico 63 8

5 Russia 60 7

6 Morocco 38 5

7 Philippines 37 4

8 South Africa 36 4

9 Republic of the Congo 33 4

10 Vietnam 26 3

Total $718 86%

TASC

1 United States $2,300 85%

2 Australia 125 5

3 Germany 84 3

4 Japan 83 3

5 Mexico 49 2

6 Afghanistan 40 1

7 India 24 1
Appendix III: Expenditures in 2011 for the 

Emerging Markets Program, Quality Samples 

Program, and Technical Assistance for 

Specialty Crops Program

Page 54 GAO-13-740 Agricultural Trade

Dollars in thousands

Country ranking by share of 

expenditures Expenditures

Share of total 

expenditures

8 Taiwan 12 .4

Total $2,717 100%

Source: GAO analysis of USDA data.

Notes: 

TASC funds were expended in eight countries in 2011.

Although the United States does not have diplomatic relations with Taiwan, we have listed it as a 

separate country because whenever the laws of the United States refer or relate to foreign countries, 

nations, states, governments, or similar entities, such terms shall include and shall apply to Taiwan. 

Numbers in columns may not sum to totals because of rounding.

Data shown are as of September 25, 2012.
Appendix IV: Cost-Benefit Analyses Assert 

That Several Market Failures Justify FAS 

Programs

Page 55 GAO-13-740 Agricultural Trade

The 2007 study and 2010 update contended that three market failures 

lead private firms to underinvest in export promotion compared with the 

socially optimal level. According to the study, these failures therefore 

justify U.S. government intervention through the U.S. Department of 

Agriculture market development programs.1

• Uncertain funding. Because of uncertainty about annual U.S. 

government allocations of market development funding, private-sector 

participants tend to develop short-term (i.e., 1 year) plans that do not 

take into account the long-term effects of market development. For 

example, market development expenditures for high-value and bulk 

commodities have a lagged impact of 7 and 3 years, respectively, so

that expenditures in a single year accrue benefits over several years. 

As a result, private-sector participants tend to underfund market 

development activities relative to the socially optimal level. 

• Spillover effect. Market development for one commodity may also 

increase demand for other commodities—a result known as a 

spillover effect. For example, almond promotions increase grape 

exports (but not vice versa). Unless such commodities are “cobranded” and marketed together, exporters do not see the spillover

effect as a promotion incentive and thus tend to underpromote their 

own products compared with socially optimal levels. 

• Indirect effect. Related to the first two sources of market failure, less 

than optimal amounts of promotion, and therefore of exports, will 

lead—in what is known as the indirect effect—to less than socially 

optimal operating levels in other segments of the farm economy and 

the general economy. To the extent that exports benefit other sectors 

of the general economy, such as by increasing growers’ prices and 

government tax revenues, there is a compelling public interest in 

helping firms to develop new export markets for U.S. agricultural 

commodities. 

 1

According to the 2007 study, the federal role in agricultural market development is 

justifiable under two conditions: (1) A market failure leads private firms to under invest in 

export promotion compared with the socially optimal level. (2) A compelling public interest 

in export promotion exists that would justify additional private-sector market promotion. A 

market failure is commonly defined as a situation in which an unregulated competitive 

market is inefficient, because prices fail to provide proper signals to consumers and 

producers. In the presence of a market failure, the government can intervene and provide 

policy through regulation, taxes, or subsidies to bring the market to equilibrium.

Appendix IV: Cost-Benefit Analyses Assert 

That Several Market Failures Justify FAS 

Programs
Appendix V: Computable General Equilibrium 

Model

Page 56 GAO-13-740 Agricultural Trade

The 2007 cost-benefit analysis that the Foreign Agricultural Service (FAS)

commissioned used a computable general equilibrium model, in addition 

to a market share model and a spillover effect model, to examine the 

economic impacts of FAS’s Market Access Program and the Foreign 

Market Development Program. A computable general equilibrium model 

is a mathematical expression where all economic relationships are 

modeled simultaneously. For example, the price of a good depends on 

the price of all other input goods, profits, and wages, and vice versa, 

assuming full employment in the economy. Compared with the market 

share or spillover effect model, the computable general equilibrium model 

includes a more comprehensive list of relevant variables while allowing 

more parameters to vary.1

Using this model, the 2007 study found the following key results:

• The FAS program and participant promotion expenditures under 

the 2002 farm bill present an economic-welfare-to-governmentexpense ratio of 10.3:1 and an economic-welfare-to-total-expense 

ratio of 5.2:1. This result translates into an increase in farm cash 

receipts of $2.2 billion.2

• The FAS program and participant promotion expenditures under a

hypothetical 2007 farm bill presented a potential economicwelfare-to-government-expense ratio of 8.2:1 and an economicwelfare-to-total-expense ratio of 4.1:1, with a total economic 

benefit of $740 million. In addition, for the period 2008-2012, farm 

revenues would equal $256 billion under the hypothetical 2007 

farm bill and would change by $2.4 billion and -$4.2 billion under 

the increasing and eliminating scenarios, respectively.

 1

The study used the framework from the global trade analysis project agriculture model.

2

An economic welfare–expense ratio of x:1 means that the economic welfare increased by 

x for every dollar spent. 

Appendix V: Computable General Equilibrium 

Model
Appendix VI: Comments from the U.S. 

Department of Agriculture

Page 57 GAO-13-740 Agricultural Trade

Appendix VI: Comments from the U.S. 

Department of Agriculture
Appendix VI: Comments from the U.S. 

Department of Agriculture

Page 58 GAO-13-740 Agricultural Trade
Appendix VII: GAO Contacts and Staff 

Acknowledgments

Page 59 GAO-13-740 Agricultural Trade

Lawrance Evans Jr., (202) 512-4802 or evansl@gao.gov

In addition to the individual named above, Christine Broderick (Assistant 

Director), Pedro Almoguera, Mason Thorpe Calhoun, Howard Cott, 

Kathryn Crosby, Martin De Alteriis, Justin Fisher, Reid Lowe, Grace Lui, 

and Vanessa Taylor made significant contributions to this report.

Appendix VII: GAO Contacts and Staff 

Acknowledgments

GAO Contact 

Staff 

Acknowledgments 

(320926)
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