Defining Anemic: In Five Years, 2018 Farm Bill USDA Provision For Cuba Had No Use Of FMD And Two Uses Of MAP. Approximately 90 U.S.-Based Entities Could Have Participated. That’s A 2.2% Use Rate.
/Defining Anemic: In Five Years, 2018 Farm Bill USDA Provision For Cuba Had No Use Of FMD And Two Uses Of MAP. Approximately 90 United States-Based Entities Could Have Participated. That’s A 2.2% Use Rate.
In 2018, legislative advocates maintained that inserting a Market Access Program (MAP) and Foreign Market Development (FMD) provision in H.R. 2, the five-year Agriculture Improvement Act, known as the Farm Bill signed into law on 20 December 2018 by Donald Trump, 45th President of the United States was critical to “laying the groundwork” for increasing exports of agricultural commodities and food products to the Republic of Cuba. Statements from members of the United States Congress included: “… an important first step to regaining our presence in Cuba.”
Approximately seventy United States-based entities (primarily trade promotion organizations) annually are identified by the United States Department of Agriculture (USDA) as receiving funding for MAP and approximately twenty entities are identified as receiving funding for FMD.
Leading to the enactment of the 2018 Farm Bill, most observers reasonably concluded that legislative advocates- within the United States Congress and organizations in Washington DC and outside of the beltway would have prominently teed-up at least one high-profile applicant to publicize in advance they would use the provision if it became law or at least one high-profile applicant to immediately and publicly request funding when the 2018 Farm Bill became law on 21 December 2018.
The most significant impact of an anemic number of MAP/FMD requests and usage in 2018, 2019, 2020, 2021, 2022, and 2023 is what the lack of interest portends for other legislative efforts in the United States Congress relating to the Republic of Cuba, particularly those focused upon changes to cash-in-advance payment terms for agricultural commodity and food product exports from the United States to the Republic of Cuba required by the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSREEA). The question opponents will ask: “If authorizing MAP/FMD for Cuba was so important, why have so few organizations used it?”
The cash-in-advance terms were supported by United States-based exporters while opposed by United States-based agricultural commodity and food product trade promotion organizations. United States-based exporters were concerned in 2000 and remain concerned in 2023 that with Republic of Cuba government-operated entities maintaining a chronic inability to abide by payment terms other than cash-in-advance, more prudent to retain a perhaps smaller market share with no payment issues rather than a larger market share with endemic, and necessarily publicly-disclosed payment issues.
Source: USDA- February 2023
The USDA reports that since enactment of the 2018 Farm Bill, no entities have used FMD funding in the Republic of Cuba and two entities have used MAP funding in the Republic of Cuba. The USDA reported no applications were rejected.
According to the USDA in early 2021, “Although the table indicated nine expressions of interest over two years, these represent fewer than nine organizations as some of the organizations applied in multiple years. The earlier table only included those entities that expressed interest in Cuba directly, not anyone that sought to add Cuba to a regional program.”
That some entities applied more than once, but did not ultimately use MAP in the Republic of Cuba is more consequential because it begs the question- why did the entities apply, but not choose to use MAP and/or FMD in the Republic of Cuba?
Only one entity has been public about using MAP funding (US$60,000.00) in the Republic of Cuba. Denver, Colorado-based Potatoes USA which in November 2020 delivered to the Republic of Cuba 33,118 pounds of potato seeds valued at US$44,760.00. Sample costs are ineligible for MAP or FMD funding. From the USDA, “… any unspent funds would normally remain in participants’ agreements, available for the agency to approve for plans a participant submits in a future year.”
From the USDA in early 2021, “Most MAP programs operate on a January to December year, however, some run on a July to June year. The regulations allow groups to continue already approved activities up to thirty days after the end of the program year. Thus, the latest a participant could continue an activity funded by MAP 21 would be July 30, 2022, if their MAP 21 program began June 1, 2021. A participant would have until the end of January 2022, if their MAP program began January 1, 2021. The MAP regulations allow a participant to file claims up to six months after the end of the program year.”
From the USDA: “In 2021, FAS is transitioning FMD program funding from a fiscal year basis to a calendar year basis to better meet the administrative needs of recipient organizations.”
Under the Market Access Program, USDA provides competitive, cost-share assistance to U.S. exporters and agricultural, fish, and forest product trade organizations for international marketing and promotion of U.S. commodities and products. More information about the program and the funding opportunity is available at: https://www.fas.usda.gov/programs/market-access-program-map.
Under the Foreign Market Development Program, USDA partners with nonprofit agricultural and forest product trade associations to build longer-term international demand for U.S. commodities. More information about the program and the funding opportunity is available at: https://www.fas.usda.gov/programs/foreign-market-development-program-fmd.”
What Is FMD & MAP?
The USDA does not provide any payments to selected applicants in advance of the applicant making disbursements. The USDA provides payment upon receipt of an invoice from the applicant. The invoices are audited by the USDA and a claw back of payments is permitted.
Any Republic of Cuba-related invoice remains likely to receive additional scrutiny due to an amendment to the 2018 Farm Bill submitted and approved by Marco Rubio (R- Florida), a member of the United States Senate. That amendment required that any entity using MAP/FMD funds in the Republic of Cuba do not use funds for services which managed by Republic of Cuba government-operated companies connected to the Revolutionary Armed Forces (FAR) of the Republic of Cuba.
MAP: “Through the Market Access Program (MAP), Foreign Agricultural Service (FAS) partners with U.S. agricultural trade associations, cooperatives, state regional trade groups and small businesses to share the costs of overseas marketing and promotional activities that help build commercial export markets for U.S. agricultural products and commodities.”
“MAP reaches virtually every corner of the globe, helping to build markets for a wide variety U.S. farm and food products. FAS provides cost-share assistance to eligible U.S. organizations for activities such as consumer advertising, public relations, point-of-sale demonstrations, participation in trade fairs and exhibits, market research and technical assistance. When MAP funds are used for generic marketing and promotion, participants must contribute a minimum 10-percent match. For promotion of branded products, a dollar-for-dollar match is required. Each year, FAS announces the MAP application period and criteria in the Federal Register. Applicants apply for MAP through the Unified Export Strategy (UES) process, which allows eligible organizations to request funding from multiple USDA market development programs through a single, strategically coordinated proposal. FAS reviews the proposals and awards funds to applicants that demonstrate the potential for effective performance based on a clear, long-term strategic plan.”
FMD: “The Foreign Market Development (FMD) Program, also known as the Cooperator Program, helps create, expand and maintain long-term export markets for U.S. agricultural products. Under the program, FAS partners with U.S. agricultural producers and processors, who are represented by non-profit commodity or trade associations called “cooperators,” to promote U.S. commodities overseas.
The FMD program focuses on generic promotion of U.S. commodities, rather than consumer-oriented promotion of branded products. Preference is given to organizations that represent an entire industry or are nationwide in membership and scope.
FMD-funded projects generally address long-term opportunities to reduce foreign import constraints or expand export growth opportunities. For example, this might include efforts to: reduce infrastructural or historical market impediments, improve processing capabilities, modify codes and standards, or identify new markets or new uses for the agricultural commodity or product.
Each year, FAS announces the FMD application period and criteria in the Federal Register. Organizations apply for the FMD program through the Unified Export Strategy (UES) process, which allows applicants to request funding from multiple USDA market development programs through a single, strategically coordinated proposal. FAS reviews the proposals and awards funds to applicants that demonstrate the potential for effective performance based on a clear, long-term strategic plan.”
Value Of MAP/FMD
For the United States business community, the MAP/FMD amendment to the Farm Bill was significant, but more likely to provide greater financial value to the government of the Republic of Cuba than to United States food product and agricultural commodity exporters using provisions of the TSREEA.
The likelihood of a value to United States taxpayers, as members of the United States Senate have posited, of US$28.00 returned for every US$1.00 in expenditures of MAP/FMD throughout the world, and now including the Republic of Cuba, will be challenging to measure- but it remains important to measure and the USDA should focus upon the cost-benefit analysis.
LINK TO COMPLETE ANALYSIS IN PDF FORMAT
Links To Related Analyses
USDA Updates Usage In Cuba Of MAP And FMD Funding Authorized By 2018 Farm Bill. In Four Funding Periods In Four Years, Two Uses Of MAP; No Uses Of FMD. Anemic Response By Export Advocates. November 11, 2021
USDA Received Zero MAP/FMD Program Applications For Cuba in 2019 Or 2020; Will Any Group Request For FY2021? May 21, 2020
