Senators Introduce Legislation Strengthening Trade Programs for the Wheat Industry

Posted September 20, 2017

On September 19, U.S. Senators Joni Ernst (R-Iowa), Angus King (I-Maine), Joe Donnelly (D-Ind.) and Susan Collins (R-Maine) introduced the “Cultivating Revitalization by Expanding American Agricultural Trade and Exports (CREAATE) Act,” which will double the annual funding for the Foreign Market Development (FMD) and the Market Access Programs (MAP). On May 03, 2017, Congressmen Dan Newhouse (R-WA) and Chellie Pingree (D-ME) introduced the companion bill, CREAATE Act (HR 2321), in the House. 

The MAP and FMD programs are part of a public-private partnership that provides competitive grants for export development and promotion activities to non-profit farm and ranch organizations that contribute funds from checkoff programs and industry support.

U.S. Wheat Associates (USW) represents U.S. wheat farmers in overseas markets and is a participant in the MAP and FMD programs. Private funding for USW’s export market development activities comes from 19 state wheat commissions and qualifies USW to compete for program funds. For every $1 wheat farmers contribute, they earn an additional $2 in MAP and FMD funding. A recent study showed that between 2010 and 2014, every $1 wheat farmers invested in the program generated an additional $149 in U.S. wheat exports and returned $45 in net revenue back to farmers from the increased export demand.

Agricultural export market development programs funded through the Farm Bill have contributed an average of $8.2 billion per year, a total of more than $309 billion, to farm export revenue between 1977 and 2014 according to a 2016 study conducted by noted land grant university economists.

The study examined the effectiveness of the MAP and FMD programs. The programs increased total average annual U.S. economic output by $39.3 billion, GDP by $16.9 billion and labor income by $9.8 billion over the same time. The study results also showed that the economic lift created by these programs directly created 239,800 new jobs, including 90,000 farm sector jobs. Despite these successes, MAP and FMD funding has not increased since the 2002 Farm Bill.

“These programs have accounted for 15 percent of all the revenue generated by exports for U.S. agriculture over that time. To me, such a positive result is just stunning,” said Dr. Gary Williams, professor of agricultural economics and co-director of the Agribusiness, Food, and Consumer Economics Research Center at Texas A & M University, who led the study.

By testing what would happen if federal MAP and FMD funding were eliminated, the study showed that average annual agricultural export revenue would be lowered by $14.7 billion, with corresponding annual average declines in farm cash income of $2.5 billion and significant drops in GDP and jobs.

National Association of Wheat Growers CEO Chandler Goule made the following statement: 

“With the United States exporting 50% of its wheat, a strong trade agenda is essential for growing and opening new markets for wheat growers abroad. 

“The Market Access Program and Foreign Market Development program have proven to have excellent return on investment and increase the global demand for wheat while raising farm income here at home. 

“These programs provide the U.S. agricultural community with the tools needed to retain its edge in an increasingly competitive global economy. 

“NAWG commends Senators King, Ernst, and Donnelly for working across party lines to introduce the CREAATE Act which will help American farmers create, expand, and maintain access to foreign markets.”