This Almond Exporter Could Be You
Federal matching funds help almond farmers develop export sales
Charlie and Sarah Adams had a good crop this year. They shipped nearly 80 thousand pounds of almonds to Blue Diamond from their 40-acre orchard in California's Central Valley.
After processing, 56 thousand pounds (70 percent) of their deliveries are destined for foreign markets. Only 24 thousand pounds (less than one third) of their production will be sold in the U.S. That is how dependent Charlie and Sarah - and every almond grower in California - are upon foreign markets for their livelihood.
With billion-pound California almond crops on the horizon, exports may increase to 80 percent of total sales.
Without export sales, California almond growers would have to find markets for 80 percent of the crop, 20 thousand fewer Californians would have jobs, and the state and U.S. governments would collect hundreds of millions of dollars less in taxes.
The tide of hard currency from overseas sales of California almonds lifts the economies of local communities, the state and nation. This annual infusion of new wealth creates jobs in agriculture, farm machinery, food processing, packaging, transportation, as well as sales, marketing, advertising, public relations, legal and accounting services, to name a few of the multitude of jobs and businesses that depend on almond exports for some or all of their income. In most years, almonds are California's leading export crop and the nation's sixth largest export commodity. Charlie and Sarah are proud to be a part of this dynamic economic juggernaut.
But Charlie and Sarah are growers, not a marketers. Given their responsibilities on the ranch, they certainly don't have the time (nor the knowledge, experience and wherewithal) to travel the world opening markets and wooing sales for their small portion of California's annual almond crop. Nor do the other seven-thousand-plus almond growers in California. Few, if any, represent a large enough piece of the pie to justify the effort.
Almond growing - and this is true of most agricultural commodities - continues to be an industry made up of many small producers dependent on processors and marketers to buy and sell their crops. Handlers with a brand name, such as Blue Diamond, are better able to compete against well-known labels in foreign markets.
Deep Pockets and Expertise
Mobilizing a foreign market development program requires deep pockets, far more cash than an individual farmer could raise. It involves hiring trained and experienced personnel, establishing overseas offices, funding extensive travel, and acquiring the expertise to cope with endless obstacles and complexities that come with marketing agricultural products in foreign lands.
Agricultural commodities are subject to numerous health and safety regulations, as well as other rules of commerce that vary greatly from country to country. The ultimate barrier, however, can be the consumer. Exporters must convince foreign consumers that U.S. products are worth trying, often in direct competition with companies aided by a foreign government agency that sells similar foods directly to local consumers. This requires substantial investments in advertising and promotion.
Aware of those challenges and the importance of foreign sales to his livelihood, Charlie and Sarah focus their talents on producing the best possible crop that they can, while entrusting market development to their co-op. By pooling their crop and financial support with over four thousand other growers who are members of Blue Diamond, they obtain the clout to acquire industry-leading processing and marketing services, and the leverage required to be effective international marketers. Only in this way can Charlie and Sarah, and their fellow growers, become players on the international scene - through cooperation and MAP.
MAP? MAP stands for the USDA's Market Access Program, which provides funds on a matching basis to food exporters, such as Blue Diamond, to help offset the cost of overseas market development. The program helps grower organizations and trade associations compete with heavily subsidized foreign firms on their own turf. Without MAP's participation to help level the playing field, export market development in many areas of the world would not be economically feasible for small growers like Charlie and Sarah, who own the Blue Diamond cooperative.
MAP and its predecessor programs have been strengthening the American economy for some 40 years. MAP pays its own way by encouraging increased economic activity that results in more revenue in taxes than the program costs. It creates millions of jobs, and helps generate vast new wealth in America.
Blue Diamond was among the first agricultural organizations to use USDA's export promotion programs to open and expand foreign markets. This support was instrumental in opening the Japanese market to California almonds and was a crucial factor in Blue Diamond's success there. Japan now ranks as the second largest export market for California almonds. MAP is now helping Charlie and Sarah build a market in India, which could soon rival Japan's.
MAP focuses on the promotion of processed commodities and higher-valued products such as fruits, nuts and vegetables, meats, and grocery items. The program's funds eventually help major brands owned by small farmers, such as Blue Diamond, Sunkist and Ocean Spray, develop and expand foreign markets.
Helps Small Farmers
Charlie and Sarah are a Blue Diamond "composite." For the purposes of this article, they represent the men and women of varied ethnic, religious and cultural backgrounds who grow almonds for the co-op. This cross-section of American citizens farms an average of some 50 acres of almonds.
Charlie and Sarah also represent the American entrepreneurs that MAP was designed to help: small farmer-taxpayers who are the foundation of local and state economies all across this country. These small businessmen and women produce agricultural products that bring home hard currency from around the world, year after year. They represent only one percent of American workers, yet they produce the most abundant and cheapest food supply in the world.
USDA data show that every dollar invested in foreign trade translates into $16 in additional exports. Studies also show that every additional billion dollars in agricultural exports creates 17,000 new jobs in the U.S., which makes MAP a jobs program that is difficult to ignore.
Yet MAP has its detractors. It is seen by some people as corporate "welfare," and regularly meets a stiff challenge from local media, certain politicians, and consumer groups. Most of the program's critics have a different agenda. They want the money being spent on MAP for their own pet projects and see the program as competition for a shrinking public budget.
In an ideal world, where everyone played by the same rules, government help in promoting American brands owned by small farmers probably would not be needed, but this is not an ideal world. Every country engaged in international trade has policies and programs to help it compete more effectively, and to expand its share of the world market. Most heavily outspend the U.S. in this respect. Without a strong commitment from our government to agricultural export programs, America's farmers and workers would be at a substantial disadvantage in world trade.
Take the European Union (EU), for example. The EU outspends the U.S. in terms of export enhancements by a 10-to-1 margin. Worldwide, nations competing with the U.S. continue to assist their growers, levy heavy duties on imports, and raise non-tariff barriers to free trade, making it more difficult for California almond growers to compete in foreign markets. The MAP partnership provides leverage to maintain and expand markets worldwide in the face of such competition.