Agricultural Export Market Recovery and Diversification

Current Status

Existing Law: The Trade title of the Farm Bill focuses on three main areas: (1) emergency and nonemergency food aid administered by the U.S. Agency for International Development (USAID) under the Food for Peace Act; (2) market development and export promotion under USDA-administered programs established under the Agricultural Trade Act of 1978; and (3) other agricultural trade laws. The Agricultural Improvement Act of 2018 consolidates USDA's four market development and export promotion programs into a new Agricultural Trade Promotion and Facilitation Program and provides the Secretary of Agriculture new flexibility in promoting trade.
Current Authority: The Foreign Agricultural Service (FAS) works to improve foreign market access for U.S. products, to build new markets, to improve the competitive position of U.S. agriculture in the global marketplace, and to provide food aid and technical assistance to foreign countries. FAS has the primary responsibility for USDA's activities in the areas of international marketing, trade agreements and negotiations, and the collection and analysis of international statistics and market information.
Existing Limitations: The Agricultural Trade Promotion and Facilitation Program has mandatory annual funding of $255 million. This new fund provides the Secretary of Agriculture $3.5 million annually to promote trade when the ATPFP's component programs have applications that exceed available funding. Current funding levels are inadequate to recover markets lost during trade disruptions and to meaningfully diversify export destinations.

Problem

Specific Harm

U.S. agricultural export losses due to the trade war totaled $27.2 billion, or annualized losses of $13.2 billion. The U.S. government provided farmers with financial assistance to help weather the storm, allocating nearly $28 billion in direct payments to farmers over 2018 and 2020.¹

American agricultural exports to China fell from $15.8 billion in 2017 to $5.9 billion in 2018, according to the U.S. International Trade Administration.² This represents a 63% collapse in a single year.

The agriculture sector had record levels of debt in 2019 and the highest number of bankruptcies since 2011.³ The number of farm bankruptcies in the United States grew by 20 percent in 2019. 595 such bankruptcies were filed in 2019, an increase on the 498 filed in 2018. The number of Chapter 12 bankruptcies hit an eight-year high.⁴

Who Is Affected

Losses were largely concentrated in the Midwest with Iowa, Illinois, and Kansas incurring annualized losses of $1.46 billion, $1.41 billion, and $955 million, respectively.⁵

Every $1 billion of U.S. agricultural exports in 2023 supported approximately 5,997 U.S. jobs throughout the economy. Agricultural exports in 2023 required 1.05 million full-time civilian jobs, which included 582,870 jobs in the nonfarm sector.⁶

U.S. agricultural trade is particularly concentrated among Mexico, Canada, and China. These nations were the destination for about 50 percent of the total value of U.S. agricultural exports in 2024.⁷

Gaps in Current Law

Permanent Market Loss: Supply chains and markets shifted, with countries like Brazil and Argentina exporting more soybeans to China to fill the demand previously filled by U.S. farmers.⁸

Brazil Dominance: Between January and November 2024, the U.S. share of China's soybean imports dropped to 18%, down from 40% in 2016. Meanwhile, Brazil's share surged to 74%, up from 46%.⁹

China imported 71% of its soybeans from Brazil in 2024, making it the dominant supplier. Should Brazil develop soybean varieties and production processes tailored exclusively to Chinese standards, its market share is expected to rise further.¹⁰

Accountability Failures

No statutory requirement for export market concentration limits or diversification targets
Inadequate FAS staffing in priority emerging markets
Market development programs underfunded relative to $27 billion in documented losses
No systematic tracking of competitor positioning (Brazil, Argentina, Australia, EU)
Bailout payments ($28 billion) addressed income loss but not market recovery

Proposed Reform

Primary Policy Change

Establish statutory requirements for agricultural export market diversification, expand market development program funding, and mandate competitor intelligence capabilities within USDA's Foreign Agricultural Service to prevent recurrence of catastrophic market concentration losses.

New Requirements

Market Diversification Standards

USDA shall maintain export market diversification such that no single country accounts for more than 25% of any individual commodity's export value (calculated on a rolling 3-year average)
FAS shall identify and prioritize alternative markets in regions with growing middle-class populations: Southeast Asia, South Asia, Africa, Middle East, and Latin America
Annual publication of commodity-specific concentration indices and diversification progress

Expanded Market Development Programs

For each $1 invested in export market development, U.S. agricultural exports have increased by more than $24. Through MAP, FAS will provide $174.3 million for fiscal year 2024 to 68 nonprofit organizations.¹¹ Mandate tripling of MAP baseline funding to address documented $27 billion market losses
USDA launched the $1.2 billion Regional Agricultural Promotion Program (RAPP) in 2023 in response to a bipartisan request from the U.S. Senate Committee on Agriculture, Nutrition, and Forestry. RAPP aims to diversify and expand market opportunities for U.S. food and agricultural products beyond the traditional top customers. Instead, RAPP will focus on enhancing U.S. exports to new markets in parts of the world – including South and Southeast Asia, Latin America, the Middle East and Africa, and others.¹² Codify and permanently authorize RAPP at current funding levels

FAS Capacity Enhancement

FAS has a global network of nearly 100 offices covering approximately 180 countries. These offices are staffed by agricultural attachés and locally hired agricultural experts who are the eyes, ears, and voice for U.S. agriculture around the world.¹³ Expand FAS attaché presence by 25% with priority placement in Southeast Asia, Africa, and South America
Establish dedicated competitor intelligence unit to track Brazil, Argentina, Australia, Canada, and EU market positioning
Mandatory quarterly reporting on sanitary/phytosanitary (SPS) market access barriers and resolution progress

Branded U.S. Agricultural Products Initiative

Create "American Grown" certification program for premium positioning in emerging markets
Prioritize value-added agricultural products over raw commodity exports
Expand Quality Samples Program to facilitate buyer relationships in priority markets

New Prohibitions

No federal agricultural trade assistance may be used for markets already exceeding the 25% concentration threshold until diversification targets are met
FAS may not reduce attaché presence in priority emerging markets identified in the diversification strategy
No Market Facilitation Program or similar bailout payments may be disbursed absent concurrent market recovery investment equal to 10% of bailout value

Enforcement

GAO Oversight

GAO shall conduct biennial audits of market diversification progress against statutory targets
GAO shall assess ROI of market development program expenditures against documented export value increases
GAO shall evaluate FAS competitor intelligence capabilities and accuracy

Inspector General Authority

USDA Inspector General shall review program participant compliance with match requirements
IG shall investigate allegations of fraud or misuse in market development grant programs

Congressional Reporting

FAS Administrator shall submit annual report to Senate Agriculture Committee and House Agriculture Committee on:
- Commodity-by-commodity export concentration ratios
- Progress toward diversification targets
- Competitor market share analysis
- SPS barrier resolution status
- Market development program performance metrics

What Changes

Before

U.S. soybean exports to China collapsed 63% in one year due to retaliatory tariffs
China has been actively diversifying its agricultural imports in recent years, with Brazil surpassing the US to become its top soybean supplier. Market data revealed that between 2016 and 2024, the US share of China's soybean imports plummeted from 40 percent to just 18 percent.¹⁴
$28 billion in taxpayer-funded bailouts to compensate farmers for lost markets
The increase was expected despite the government providing farmers with a $28 billion bailout, twice as much as the 2009 bailout of Detroit's Big Three automobile producers. While the aid package has provided relief, many farmers are continuing to struggle due to the trade war with China which has cut them off from one of their biggest markets.¹⁵
No systematic diversification strategy or concentration limits
FAS understaffed in highest-growth emerging markets

After

Statutory 25% concentration cap prevents over-reliance on any single buyer
Tripled MAP funding accelerates alternative market development
Permanent RAPP authorization ensures sustained investment in emerging markets
Expanded FAS presence in priority markets (Southeast Asia, Africa, Latin America)
Competitor intelligence enables proactive market strategy
GAO oversight ensures accountability and measured ROI
Reduced vulnerability to trade disruption through diversified export portfolio

ROI

Federal Budget Impact (10-Year, CBO-Scoreable)

Costs:

Item	10-Year
MAP Expansion (tripling baseline from ~$175M to ~$525M/year)	$3.5B
RAPP Permanent Authorization ($240M/year)	$2.4B
FAS Attaché Expansion (25% increase, ~30 positions)	$0.5B
Competitor Intelligence Unit	$0.15B
Quality Samples Program Expansion	$0.1B
Administrative/IT Systems	$0.1B
Contingency (15%)	$1.0B
Total	$7.75B

Savings:

Item	Gross	Capture	Net
Avoided Future Bailouts (MFP-type programs)¹⁶	$28.0B	50%	$14.0B
Reduced Farm Bankruptcy Costs¹⁷	$1.5B	40%	$0.6B
Avoided Crop Revenue Insurance Payouts	$2.0B	30%	$0.6B
Total	$31.5B		$15.2B

Result: Net +$7.45B · ROI 1.96:1

Societal Benefits

Benefit	Annual	NPV (3%)	NPV (7%)
Export Value Recovery (10% of $27B loss)¹⁸	$2.7B	$23.0B	$19.0B
Jobs Supported (at $6,000/job per $1B exports)¹⁹	16,200	—	—
Economic Multiplier Effect (at $2.06/dollar)²⁰	$5.6B	$47.8B	$39.3B
Farm Income Stabilization	$1.5B	$12.8B	$10.5B
Rural Community Economic Activity	$0.8B	$6.8B	$5.6B

Summary

Category	10-Year	Notes
Federal Budget	+$7.45B (1.96:1)	CBO-scoreable; conservative bailout avoidance estimate
Societal	$83.6B - $68.8B	NPV at 3-7%; includes multiplier effects

Confidence: MEDIUM — Export recovery estimates depend on successful market penetration in competitive emerging markets. Bailout avoidance assumes diversification prevents concentration-based vulnerability. Market development program ROI of 24:1 is well-documented by USDA.

References

Yeutter Institute, University of Nebraska, "Trade War Implications for U.S. Agriculture: Round Two," 2025.
PBS News, "What is the toll of trade wars on U.S. agriculture?" January 2020.
PBS News, "What is the toll of trade wars on U.S. agriculture?" January 2020.
Statista, "U.S. Farm Bankruptcies Reach Eight-Year High," 2020.
USDA Economic Research Service, "Retaliatory Tariffs Reduced U.S. States' Exports of Agricultural Commodities," March 2022.
USDA Economic Research Service, "U.S. Agricultural Trade at a Glance," 2024.
Federal Reserve Bank of Kansas City, "Key Agricultural Trade Partners Are Important for U.S. Farm Sector Revenues and Food Prices," June 2025.
Yeutter Institute, University of Nebraska, "Trade War Implications for U.S. Agriculture: Round Two," 2025.
DatamarNews, "Brazil Dominates Chinese Soybean Market in Early 2025," January 2025.
Seed World, "Brazil and China Launch 'Soy China' Initiative," July 2025.
USDA Foreign Agricultural Service, "Market Development Program Investments for Fiscal Year 2024," January 2024.
USDA Foreign Agricultural Service, "Regional Agricultural Promotion Program," 2023.
USDA Foreign Agricultural Service, "About FAS," 2024.
Global Times, "China accelerates shift to Brazilian soybeans," April 2025.
Statista, "U.S. Farm Bankruptcies Reach Eight-Year High," 2020.
Based on $28 billion Market Facilitation Program payments 2018-2020; 50% capture rate reflects conservative estimate of future disruption prevention.
Based on elevated Chapter 12 bankruptcy filings 2018-2019; American Farm Bureau Federation data.
USDA ERS documented $27 billion in retaliatory tariff losses; 10% recovery assumed from diversification.
USDA ERS Agricultural Trade Multipliers, 2023 data.
USDA ERS, "U.S. Agricultural Trade at a Glance," 2024.

Change Log

2025-12-09 - Created: Initial draft. Key sources: USDA ERS Agricultural Trade Multipliers; USDA FAS Market Access Program documentation; Yeutter Institute trade war analysis; American Farm Bureau Federation bankruptcy data; CSIS agricultural trade analysis.