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Professor says market development programs increased GNP $5 billion per year

Dr. Harry Kaiser, professor of applied economics and management at Cornell University, speaks at U.S. Grains Council event.

U.S. Grains Council activities created 23,699 full-time jobs with $1.12 billion in labor income each year while reducing direct government payments to farmers of U.S. grains by an average of $15.3 million a year, according to an analysis by a Cornell professor.

Dr. Harry Kaiser, professor of applied economics and management at Cornell University, recently analyzed the combined effect of USGC member support and funding from USDA’s Market Access Program and Foreign Market Development program, together totaling approximately $20 million per year during the study period. He presented his report at the organization’s 15th International Marketing Conference and 58th Annual Membership Meeting in Houston.

“Dr. Kaiser has extensive experience in looking at programs like ours and telling stakeholders if they are getting their money’s worth,” said Deb Keller, USGC chairman and farmer from Iowa. “We have a great story to tell in this regard. Our programs are not only working for our members, they are returning many times more to the federal treasury than they cost.”

Among the findings

Spending on overseas market development for U.S. feed grains and related products increased the value of those exports by an average of $1.71 billion per year from 2010 to 2014 and increased U.S. gross domestic product by an average of $5 billion per year, returning $19.76 for every $1 spent by taxpayers.

What if

Kaiser also presented his analysis of what would happen to grain exports and the economic benefits they produce if USDA funding for market development were to be cut. He found a 50% cut in FAS funding would cause farm receipts to fall by almost $1.7 billion, and government payments through farm safety net programs would increase by $76.6 million annually.

Market development works 

“We know from nearly 60 years of experience that market development works, building close relationships with our customers works, and being active on trade policy issues that stymie growth works,” Keller said. “The study Professor Kaiser presented puts numbers to these outcomes and will help us tell our story to the stakeholders investing in us.”

Read Professor Kaiser's presentation here.

Source: U.S. Grains Council

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