What are the Market Access and Foreign Market Development Programs?

What are MAP and FMD?

The Foreign Market Development Program (FMD) and Market Access Program (MAP) are programs the Foreign Agricultural Service (FAS) at the U.S. Department of Agriculture oversees to stimulate demand for U.S. exports. Both programs are intended to develop foreign markets for U.S. commodities through competitive grants.

While both programs are focused on exports, they take different approaches to promoting U.S. export markets abroad. MAP focuses on marketing and promotion, while FMD works on reducing foreign trade barriers. Both programs have been shown to improve international demand for a range of commodities, generating additional export markets and contributing to overall GDP growth. In addition to increasing U.S. agricultural exports, these programs may also lessen the environmental impact of agriculture worldwide.

How do MAP and FMD support market development activities?

MAP and FMD were both established under previous farm bills. Funding for FMD dates to 1955, while MAP is more recent, receiving its first budget in 1996.

MAP helps build markets for U.S. agricultural products abroad by offering cost-sharing for such activities as consumer advertising, public relations, point-of-sale demonstration, participation in trade fairs, market research, and technical assistance. Trade associations, cooperatives, state or regional trade groups, and small businesses are all eligible to receive MAP awards to fund these activities. Recipients are required to contribute at least a 10% match for MAP funds used in generic marketing and promotion. To use the funds for the promotion of branded products, MAP requires a dollar-for-dollar match.

FMD does not focus on consumer-oriented promotion but, instead, partners with organizations that represent a broader industry. Typically, FMD funds projects that aim to reduce barriers to imports of U.S. goods and expand export growth opportunities by identifying new markets or uses for a commodity or improving processing capabilities. Funds can also be used for the generic promotion of commodities; that is, advertising for a commodity as a whole, rather than specific advertising for a branded product.

The American Soybean Association, the U.S. Dairy Export Council, U.S. Wheat Associates, the U.S. Grains Council, and many others have used MAP and FMD funds. For example, in fiscal year 2023, U.S. Wheat Associates, an export market development organization for U.S. wheat, received $3,828,122 from FMD and $5,641,780 from MAP. It has used that money to educate buyers about U.S. wheat, provide technical assistance to buyers, and promote U.S. wheat abroad.

Since the inception of MAP and FMD, the programs have generated a large return on federal investment. One independent study found that together they generated $24 in export gains for every $1 spent by the government and partners on market promotion and development. Another found that if FMD and MAP were eliminated, farm cash receipts would decrease by $5.27 billion annually.

The soybean industry has especially benefited from FMD and MAP activities. The American Soybean Association reports that the soybean industry receives more than $10 million in annual funding from MAP and FMD, in addition to over $20 million in matching funds from the soybean checkoff. Producer checkoff programs collect money from producers of a specific agricultural commodity — soybeans in this case — which is then used to research and promote the product without reference to specific producers or brands. According to a 2016 survey from the U.S. Soybean Export Council, international marketing activities, funded in part by MAP and FMD, increased average soybean exports by about 993,600 metric tons per year.

In addition to benefiting farmers, the agricultural industry, and the broader economy, MAP and FMD can also indirectly minimize total global agricultural emissions by increasing U.S. agricultural exports. The United States has a relatively low carbon footprint for many agricultural exports, but other countries with higher emissions often export more. MAP and FMD efforts to win a bigger market share for lower-emission U.S. goods could enable concentration of production in the United States of agricultural goods for which the country has an environmental advantage.

How are MAP and FMD funded?

MAP and FMD both receive mandatory funding through the Farm Bill, and neither program’s funding allocations have been increased since the early 2000s. The 2006 Farm Bill set funding for MAP at $200 million annually and the 2004 Farm Bill allocated $34.5 million annually for FMD. USDA uses Commodity Credit Corp. funds to deploy MAP and FMD grants.

Of the five market development programs that USDA oversees, MAP and FMD make up about 90% of this funding. In fiscal year 2023, MAP extended about $175.6 million.

Of that, approximately $13.9 million was awarded to Cotton Council International and $12.5 million went to the U.S. Meat Export Federation, making these two cooperatives the largest recipients of MAP funds in the most recent grant cycle.

In the same fiscal year, FMD awarded a total of $27.1 million. The largest grants went to the American Soybean Association, with about $6.9 million, and the Cotton Council International, with about $4.0 million. According to the USDA, the average MAP participant contributes $3.50 on average for every dollar in federal funding received, and every FMD participant contributes $2.50 for every dollar.

Due to the immense returns for the agricultural industry, a diverse group of stakeholders have called for an increase in funding in the 2023 Farm Bill. Bolstering funding for these popular and effective programs is likely to continue to generate mass economic returns and profit for numerous agricultural industries.

In response to growing demand, Sens. Angus Kind (I-Maine), Joni Ernst (R-Iowa), Tina Smith (D-Minn.), and Representative Dan Newhouse (R-Wash.) introduced the bipartisan Expanding Agricultural Exports Act in February 2023, which proposes doubling mandatory annual funding for MAP and FMD. The act would double the funding levels to $400 million and $69 million, respectively. According to a recent study, doubling MAP and FMD funding would generate an additional $44.4 billion in U.S. agricultural exports from 2024 to 2029, a 3.6% increase.

Key Takeaways

• The Foreign Market Development Program (FMD) and Market Access Program (MAP) are trade development and market promotion programs, overseen by the USDA’s Foreign Agricultural Service (FAS), that aim to stimulate U.S. exports abroad by building and promoting foreign markets for U.S. commodities.

• MAP specifically helps to build markets for agricultural products by funding such activities as consumer advertising, public relations, point-of-sale demonstration, participation in trade fairs, market research, and technical assistance. FMD funds projects that have the goal of reducing import barriers and expanding export growth opportunities, like efforts to reduce market impediments, improve capabilities, or identify markets or new uses for a commodity.

• MAP and FMD are authorized with mandatory funds in the Farm Bill and receive $200 million and $34.5 million each year, respectively. Funding for the two programs has remained stagnant since the early 2000s. Due to the immense returns on investment and the broad popularity of the programs, many lawmakers hope to increase the funding for both MAP and FMD in the 2023 Farm Bill.

Lalitha Shan is a food and agriculture policy intern at the Breakthrough Institute.