I am accompanied today by Phil Thomas, our AssistEint Director 

 for Agriculture Trade Issues, and also able staff including Ken 

 Graffam, who is currently heading up the work we are doing for 

 Chairman Rose on management issues at FAS. 



My comments today are offered in the context of the current 

 tight budget environment, the substantial resources USDA devotes 

 to agricultural export programs, and the current USDA efforts to 

 reorganize and improve their export programs. 



Grood management of these export programs is critical. However, 

 in the past, FAS has frequently not effectively managed its pro- 

 grams. For instance, as I have noted in the past, under the market 

 promotion program, FAS turns Grovemment funds over to not-for- 

 profit associations to either run market promotion programs them- 

 selves or pass the funds along to private for-profit companies to 

 spend on their own market promotion activities. FAS retains little 

 control over the funds provided to the private for-profit companies. 



Furthermore, FAS does not obtain assurance that market devel- 

 opment activities would not have been undertaken without Grovem- 

 ment assistance. For example, we have identified potential for sub- 

 stitution of public for private moneys with respect to the checkoff 

 programs and the operation of MPP. Relatively small amounts of 

 producer and handler funds raised through the checkoff programs 

 are spent on export programs compared to the amount spent by the 

 Government. 



This is particularly important in light of the fact that the export 

 and market development programs run by some of our major com- 

 petitors are now paid for exclusively by producer levies. For exam- 

 ple, CMA, the Grermain export promotion program, funds all of its 

 programs from producer levies. And even in France, SOPEXA, their 

 Market Development and Export Promotion Agency, stopped re- 

 ceiving Grovemment funds in 1992 and relies exclusively now on 

 producer-raised fiinds. 



In addition, FAS has still not yet established a limit on the 

 length of time that a participant can receive assistance in a market 

 before it is expected to assume the costs of its own market pro- 

 motion efforts. 



FAS also expends a significant amount of resources on reporting 

 about overseas developments that affect U.S. agriculture. Based on 

 an internal assessment, over a third of FAS's overseas staff re- 

 sources are devoted to agricultural reporting. The reports are in- 

 tended to support USDA programs, assist FAS in its trade policy 

 work, and to disseminate information to industry about foreign 

 competition and demand for U.S. farm products. However, much of 

 the reporting is put to little use either by USDA or the U.S. agri- 

 cultural industry. 



Recently, FAS has done a major review of its reporting require- 

 ments and undertook some changes. There was a scaling back of 

 some reporting requirement and there was a shift of some report- 

 ing from bulk commodities to HVP's, which are becoming an in- 

 creasingly important share of our exports of agricultural products. 

 However, there is still a lot that yet can be done and more re- 

 search, I think, is needed to ensure that the reporting resources 

 are well spent. 



