U.S. Department of Agriculture:

Market Promotion Program Could Be More Effective

T-GGD-93-38: Published: Jun 23, 1993. Publicly Released: Jun 23, 1993.

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GAO discussed the Department of Agriculture's Market Promotion Program (MPP). GAO noted that: (1) during fiscal years 1986 through 1993, over $1.25 billion was authorized for MPP, but the current funding process does not address several important factors; (2) the Foreign Agricultural Service (FAS) does not require commercial firms to demonstrate that MPP funds will be used to increase promotional activities; (3) FAS has no restrictions on the length of time that commercial firms can receive MPP funds or the circumstances under which these firms should assume sole responsibility for their export promotion activities; (4) FAS officials have not addressed the possibility of MPP subsidizing a foreign firm in a market in which a U.S. firm is trying to compete without MPP support; (5) FAS relies on unverified data in allocating MPP funds; (6) MPP effectiveness will be difficult to evaluate because of many uncontrollable variables that affect the success of international marketing efforts; (7) FAS has attempted to evaluate MPP effectiveness by linking MPP-funded promotions to increased exports; and (8) FAS officials believe a conflict exits between the MPP primary objective and the types of firms and products served by MPP.

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