The USDA market promotion program : a study of funds allocation and the use of export assistance services by participants

In recent years U.S. exports of agricultural products have become a much more important component in the success of the U.S. agricultural industry. Many U.S. agribusiness who export or have the potential to export face tremendous barriers in foreign markets. Federal programs have been developed to help U.S. agricultural exporters to overcome these obstacles. The Foreign Agriculture Service (FAS) of the United States Department of Agriculture (USDA) implements such a program, the Market Promotion Program (MPP). This study is divided into two parts; the first of which assesses the allocation of MPP funds to determine whether they are allocated in a biased fashion towards large firms who may substitute these funds for their own private funds, and the second which looks for differences in the knowledge about and use of export assistance services according to firm size and level of export experience. Data for the study were collected from FAS and from a survey of 1993 MPP participants concerning their perception towards exporting, export assistance, and some basic firm characteristics.

The results indicated that there was in fact a difference in the effects that firm characteristics had on the allocation of funds according to whether the firm was large or small. Results suggested that large firms are more familiar with export assistance services available and tend to use these services more than small firms. The results also suggested that more experienced exporters were more familiar with and used more services than those firms who were less experienced exporters.