Every year, the federal government spends hundreds of millions of dollars to market agricultural products abroad — sending taxpayers’ money to subsidize the advertising campaigns of some of the country’s largest brand names, according to a report by the Senate’s chief waste-watcher.
Sen. Tom Coburn said taxpayer money has gone to subsidize projects such as a promotion of pet shampoo and a reality television show in India sponsored by an American cotton promotor. The Oklahoma Republican said it’s time to trim the flow.
He is releasing a report Thursday morning that highlights a number of brands he said don’t need the help when that money could be better spent reducing the government’s deficit.
“The Market Access Program is a case study of federal inefficiency and overlap,” Mr. Coburn said.
Overall, the marketing program spends more than $200 million every year to pay for advertising, research and promotional travel around the globe for company and trade association executives seeking to raise their products’ profiles.
Mr. Coburn’s top example is Blue Diamond Growers, a California cooperative of almond farms that he said reported $3.3 billion in sales over the past five years, yet has received $28.2 million in promotion subsidies since 1999.
But Susan Brauner, director of public affairs at Blue Diamond, said the marketing assistance is critical to helping the cooperative compete with foreign growers and to gain a foothold in their markets.
“We’ve been participating in this program for a long time because it works for our growers,” she said. “We feel that if anything the U.S. government should be encouraging people like co-ops and others to participate and try to expand exports.”
She said the cooperative is made up of small family growers with farms averaging about 55 acres each, and that the co-op matches $2 for every $1 that the government ponies up from the program.
The return on investment is good for both growers and for taxpayers, because California almond growers’ export activities account for 30,000 jobs, she said.
Ms. Brauner said the subsidies are needed because the U.S. is competing in a tough international market where other countries subsidize at even higher rates.
The Market Access Program has been under fire for years, but has survived and even expanded.
In the post-Republican revolution years after the 1994 elections, marketing subsidies were regular targets for cuts on Capitol Hill, with the Senate holding floor votes almost every year to trim the program.
Those votes routinely failed.
Then, in his 2011 budget, President Obama called for a 20 percent cut in the program, arguing that it duplicates other existing programs and that its economic benefits are “unclear.”
The Government Accountability Office, Congress’ chief auditor, also has questioned the program’s worth, as have liberal and conservative interest groups.
Yet lawmakers have managed to preserve it, and often brag about the amount of money going to local associations.
The money is reserved for small businesses and for brand associations, such as Blue Diamond.
Now, with a five-year farm bill pending in the Senate, Mr. Coburn is trying to set up another fight over the money. He has introduced an amendment to trim 20 percent from the program.
He said a major problem is that the program doesn’t appear to be competitive anymore — it awards subsidies year after year to the same prominent associations.
In his report, Mr. Coburn took aim at the Cotton Council International, which sponsors the reality television show “Let’s Design” in India as part of its international promotional activities.
Mr. Coburn said CCI has received more than $169 million in taxpayer support through the market program over the past decade, but added that it has publicly acknowledged that the India reality show doesn’t necessarily promote U.S.-grown cotton.
A CCI executive told the New York Times last year that the subsidies help promote a market for cotton.
Mr. Coburn also said taxpayer money is subsidizing promotion of items such as pet food brands, livestock semen and embryos.
The senator also took aim at Sunkist, a cooperative of Arizona and California citrus growers that he said tops $1 billion a year in sales and proudly says it is one of the most recognized brands in the world.
“Despite its brand ubiquity, Sunkist receives $3 [million] to $4 million annually,” Mr. Coburn said, pointing to recent subsidies funding advertising in Japan, China and Hong Kong.
An email message to Sunkist wasn’t returned Wednesday.