Apple Lines: Funding international apple promotions
An increasing percentage of the Washington apple crop is exported, while domestic markets remain stable.
Thanks to the apple growers in the state of Washington, apples are promoted in 47 countries through the use of 13 representatives that contract with the Washington Apple Commission. You might be surprised to know that very little of the growers' money moves into the international funding channels to support a program that has exceeded $12 million in the 2005-2006 crop year.
Market Access Program
The Farm Bill provides funding for the promotion and marketing of agricultural products internationally through the United States Department of Agriculture with responsibility given to the Foreign Agricultural Service to support organizations that promote and market agricultural products overseas. As one could imagine, spending of tax dollars must meet strict guidelines set forth by USDA and FAS. Where, when, and how the money is spent are strictly accounted for, measured, and quantified in reports back to FAS called Country Progress Reports, and, eventually, the funding mechanism itself, the Unified Export Strategy. Specific guidelines are set for how these resources can be spent.
The Apple Commission is one of 34 participants in the Horticultural Division of FAS that requests Market Access Program funds each cycle (typically 12 months). We compete head to head for a percentage of these monies through UES preparation. How each participant is rated by FAS through UES presentations determines the funding each participant will receive. Since the
2004-2005 funding cycle, the Apple Commission has consistently improved its ranking in the top ten.
Promotional and marketing efforts internationally are not just a function of grower funds, but an industry effort. The packers of Washington spend millions of dollars each year traveling to sell and market your apples overseas. The MAP funds, coupled with packers' resources, provide growers with an immense and measurable impact on overseas markets.
The information shown in the "Washington Apple Commission funding" chart represents the grower contribution to export market development, the industry's dedication to off-shore sales, and the amount of MAP funds obtained from FAS.
Although the grower contribution was only $1.6 million in 2005-2006, you can clearly see how these resources are leveraged to have greater impact in the world marketplace. In the 2006-2007 season, the ratio of the grower contribution to the total invested in export markets is almost 8:1, and the resulting MAP funding is more than 2.4 to 1.
The international promotion and marketing effort uses approximately 1.6 cents or 46 percent of the 3.5 cents-per-box assessment that the commission collects. Industry support organizations receive approximately 1.5 cents, or 43 percent of the total, and the administration of all commission activities accounts for 0.4 cent (11 percent), based on 2005-2006 crop-year numbers.
Of the 1.5 cents per box that supports industry organizations, the U.S. Apple Association receives 71 percent, the Northwest Horticultural Council receives 25 percent, and the remaining 5 percent goes to smaller industry groups. USApple represents our industry in national issues, is our industry voice to Congress, and provides the health and nutrition message. The Hort Council's primary focus is to represent our industry in market access issues. Cold treatment requirements in Indonesia and codling moth in Taiwan are among the issues handled by the Hort Council.
The table "Washington State apple exports" shows the percentages exported in relation to the total crop and provides insight into the importance and interdependence of domestic and international markets.
We see a clear trend in larger percentages of our Washington apple crop being exported, while domestic markets remain stable and grower returns increase. Our apple marketers recognize the importance of a balanced sales approach.
Orchestrating international apple promotions requires hard work and effort from several focused industry organizations working in unison. But none of this would be possible without the apple growers of Washington State. Only through their hard work and dedication in growing the apples can we all be successful in putting forth Washington apples as the best natural product in the world.