U.S. Department of Agriculture: Improved Management Could Increase the Effectiveness of Export Promotion Activities

GAO discussed the effectiveness of three Department of Agriculture (USDA) export promotion activities, the Market Promotion Program (MPP) overseas agricultural trade offices and the Trade Show Program. GAO noted that: (1) since USDA has not yet developed a long-term agricultural trade strategy, it can not provide a coherent rationale and justification for its export promotion activities; (2) over $1 billion has been authorized under the MPP; (3) in recent years, private firms have used over one-third of MPP funds to promote their products through various marketing techniques; (4) USDA MPP funding criteria do not include guidance for when to phase out funding for individual participants; (5) a direct relationship between program-funded promotion activities and increased exports has been extremely difficult to demonstrate; (6) USDA operates 13 agricultural trade offices worldwide at an annual cost of $4.7 million, but can not readily demonstrate that existing or proposed trade offices are in the best locations for maximizing market development; (7) USDA has not evaluated the overall effectiveness of its trade offices since 1981; and (8) USDA also does not centrally manage the Trade Show Program and routinely subsidizes exhibitor's participation costs. GAO also noted that since governmentwide export promotion programs are not linked to an overall strategy or set of national priorities, taxpayers cannot be assured that funds are used to promote products in markets that generate the highest potential returns.