International Trade:

Effectiveness of Market Promotion Program Remains Unclear

GGD-93-103: Published: Jun 4, 1993. Publicly Released: Jun 22, 1993.

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Pursuant to congressional requests, GAO evaluated the Department of Agriculture's (USDA) Market Promotion Program (MPP), focusing on whether MPP: (1) has successfully developed, maintained, or expanded U.S. agricultural exports; and (2) participants continue to need federal funding.

GAO found that: (1) the Foreign Agricultural Service (FAS) believes that there is a positive correlation between MPP funding levels and U.S. export levels and the additional value of exports due to MPP ranges between $2 and $7 for each dollar in program expenditures; (2) the large number of variables that determine export levels makes it difficult to demonstrate a relationship between program-funded promotion activities and increased exports; (3) FAS has conducted only 12 MPP program evaluations between fiscal year (FY) 1986 and FY 1992; (4) some program activities in Japan have not achieved their objectives partially due to inadequate market research and management problems; (5) some MPP activities in Japan have helped remove trade restrictions and increased consumer awareness and sales of certain products; (6) FAS has no method for ensuring that MPP funds are used for additional promotion activities, since applicants are not required to provide information on their prior promotional expenditures; and (7) FAS has not established criteria regarding how long participants can remain in the program and is opposed to a mandatory graduation requirement.

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