eludes devising a long-term market development plan that identi- 

 fies markets and growth potential. 



It really starts with the customer and trying to figure out what 

 in fact the customer wants. It provides the needed information to 

 enable producers to satisfy consumer needs or preferences in those 

 markets. It seeks to ensure that products are competitive and that 

 distribution systems are in place to deliver the products efficiently. 

 It also attempts to ensure that consumers are aware of these prod- 

 ucts through effective promotional activities. 



Finally, strategic marketing needs continuous innovation, adapt- 

 ing to changes as they occur, and seeking to keep ahead of global 

 competition. A useful strategic plan would need to meet several 

 basic criteria. It should have a strong analytical base for setting 

 priorities; it should be developed with high level USDA involve- 

 ment because, for it to really work, it is going to involve the col- 

 laborative efforts of a large number of USDA agencies, not just 

 FAS, be comprehensive in its scope, and set meaningful priorities 

 to guide agency programs and expenditures. 



As we reported in the past, agriculture's long-term agricultural 

 strategy and country plans do not yet provide the basis for long- 

 term market development efforts. The key weakness is that the 

 LATS sets no priorities. It calls for the, "fullest possible use of all 

 export assistance programs," without identifying which programs 

 or activities are critical and most important. 



In our opinion, I think the revision to LATS Chris talked about 

 will be a good step forward if it makes a greater effort to identify 

 priorities. Strategic planning and setting priorities is especially im- 

 portant with USDA's budget pressures. Over the past several 

 years, FAS, the agency that performs the export promotion activi- 

 ties at USDA, has faced increasing program responsibilities with- 

 out commensurate increases in budgets or staff. 



In view of these pressures, any market-based strategic plan must 

 set priorities for its resources and focus them where they are likely 

 to do the most good. If USDA is to move toward a more market- 

 oriented export strategy, changes will also need to be made in 

 FAS's approach to information gathering, personnel policies, and 

 resource allocation. 



FAS maintains a worldwide reporting system that gathers infor- 

 mation on agricultural commodities overseas. Despite some recent 

 changes, the reporting system remains fundamentally oriented to- 

 ward agricultural production. Information gathering under a stra- 

 tegic marketing approach would concentrate more on providing 

 U.S. agricultural producers and distributors with data on consumer 

 demand and market potential. 



For example, in a recent report we found that many United 

 States exporters to East Asian markets desired more practical and 

 detailed data from the USDA on such things as market trends, 

 product lines, and the potential of a given product in a given mar- 

 ket. 



Most of the professional staff at FAS have backgrounds in agri- 

 cultural economics, few have formal training in marketing. If 

 USDA is to help U.S. agriculture succeed in a sophisticated and 

 competitive world market, it will need to develop staff expertise in 



