Effort to trim corporate welfare draws backlash from wheat growers
By MATTHEW WEAVER
Wheat organizations are rallying in support of a USDA program that helps them cultivate overseas customers.
Reps. Scott Garrett, R-N.J., and Patrick Murphy, D-Pa., introduced legislation in February killing USDA's Market Access Program.
In a press release, the congressmen said their Murphy-Garrett Scrap the MAP Act shows members of Congress are serious about trimming "wasteful spending" from the federal budget.
Cutting the program would save taxpayers more than $2 billion over 10 years, they said, citing examples of funding including:
* $2.1 million to Sunkist Growers, Inc., which had more than $860.5 million in revenues in 2009.
* $5.3 million granted to the USA Poultry and Egg Export Council, which includes "profitable companies" Butterball, Tyson, Wampler and Perdue in its membership.
* $8.3 million to the U.S. Grains Council, which includes Monsanto, which had more than $6.7 billion in profits in 2009, in its membership.
Tom Schatz, president of the Council for Citizens Against Government Waste, which has endorsed the legislation, said in a press release the program has been the epitome of corporate welfare and government waste for years.
"The nation's deficit is soaring, yet the federal government continues to dole out tens of millions of dollars annually for advertising and promotion to profitable, private companies," Schatz said.
Opponents characterize the program as a subsidy for rich corporations to sell their products, said U.S. Wheat Associates Director of Communications Steve Mercer.
"In terms of the wheat market, that could not be further from the truth," he said. "Every wheat grower out there knows that's not true."
For the majority of producer-funded organizations, the public-private MAP is beneficial and returns a profit to the U.S. government, Mercer said.
The organization commissioned a recent study that showed a $115 return to the wheat industry and U.S. economy for every dollar spent by producers and the federal government on export promotion, he said. The study, conducted by a Cornell University professor, examined what would have happened if 50 percent less money was invested in promotion. The study showed a 17 percent decline in wheat exports, Mercer said, affecting demand and wheat prices.
The Washington Grain Commission recently sent a letter of support for the program to legislators, noting they rely heavily on MAP funds to share in the costs of overseas marketing and promotions.
"Please notice that we share in these costs," the letter stated, noting wheat assessment taxes contribute 60 percent of the cost, with MAP funds providing the rest. "With Washington exporting more than 85 percent of our wheat annually, this overseas work is vital for our survival."
Mercer expected debate to intensify in the next months ahead, as Congress writes the federal budget.
Mercer declined to speculate on what would happen if the program's critics are successful in removing it.
"It would really cause major issues," he said.
Farm-state legislators have provided strong support in the past, and Mercer expects that will continue. U.S. Wheat and the National Association of Wheat Growers believe producers should reinforce the importance of the program to their legislators, he said.
Obama budget cuts MAP, boosts other program
President Barack Obama's budget proposes a 20 percent cut in the USDA Market Access Program, with a corresponding increase in USDA's foreign market development program, or FMD, which also provides primary federal export support.
It's uncertain how the funds would be allocated, said U.S. Wheat Associates Director of Communications Steve Mercer, but the change would affect U.S. Wheat.
The organization primarily uses the FMD to pay salaries for overseas representatives and MAP funding to pay for overseas activity. FMD requirements differ from MAP requirements for U.S. Wheat's activities, he said.