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U.S. DEPARTMENT OF AGRICULTURE: 



IMPROVEMENTS NEEDED IN ' ,^ 



FOREIGN AGRICULTURAL SERVICE MANAGEMENT 



SUMMARY OF STATEMENT BY ALLAN I. MENDELOWITZ, MANAGING DIRECTOR 



INTERNATIONAL TRADE, FINANCE, AND COMPETITIVENESS 



GENERAL GOVERNMENT DIVISION 



U.S. GENERAL ACCOUNTING OFFICE 



The current tight budget environment and the substantial 

 resources devoted to agricultural export programs make good 

 management of these programs critical. The U.S. Department of 

 Agriculture's (USDA) Foreign Agricultural Service (FAS), however, 

 frequently has not effectively managed its programs. For 

 instance, under the Market Promotion Program, FAS turns 

 government funds over to not-for-profit associations that either 

 run market promotion programs themselves 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 development activities 

 would not have been undertaken without government assistance; 

 and, FAS has not established a limit on the number of years that 

 a participant can receive assistance before it is expected to 

 assume the cost of its own market promotion. 



FAS expends a significant amount of resources on reporting about 

 overseas developments that affect U.S. agriculture. The reports 

 are expected to support USDA programs, to assist FAS in its trade 

 policy work, and to disseminate information to Industry about 

 foreign competition and demand for U.S. farm products. Much of 

 the reporting, however, is put to little use either by USDA or 

 the U.S. agricultural industry. 



Strategic planning is very important for the efficient management 

 of government resources. Under the Food, Agriculture, 

 Conservation, and Trade Act of 1990, USDA was required to develop 

 a long-term agricultural trade strategy (LATS) to guide the 

 implementation of federal programs designed to promote the export 

 of U.S. agricultural commodities. GAO's review indicates that 

 LATS does little to set meaningful priorities for agricultural 

 export programs and resources. GAO believes that additional work 

 will be necessary to make LATS a useful management tool. 



In September 1993, the interagency Trade Promotion Coordinating 

 Committee (TPCC) released a report on its efforts to develop a 

 governmentwide strategic plan for export promotion programs. GAO 

 is concerned with the lack of USDA involvement within the 

 governmentwide strategy, particularly since USDA receives the 

 bulk of the federal export promotion budget. 



