02-432. Announcement of the Emerging Markets Program for Fiscal Year 2002

AGENCY:

Commodity Credit Corporation, USDA.

ACTION:

Notice.

SUMMARY:

The Commodity Credit Corporation is inviting private sector proposals for the FY 2002 Emerging Markets Program.

DATES:

All proposals must be received by 5:00 p.m. Eastern Standard Time, March 11, 2002. Announcements of funding decisions for the EMP are anticipated sometime after mid-July 2002.

FOR FURTHER INFORMATION CONTACT:

Marketing Operations Staff, Foreign Agricultural Service, U.S. Department of Agriculture, Room 4932S, STOP 1042, 1400 Independence Ave., SW, Washington, DC 20250-1042, phone: [phone], fax: [phone], e-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

Introduction

The Commodity Credit Corporation (CCC) announces that proposals are being accepted for participation in the Fiscal Year 2002 Emerging Markets Program (EMP). The purpose of the EMP is to assist U.S. organizations, public and private, to improve market access and to develop and promote U.S. agricultural products and/or processes in low-to middle income countries that offer promise of emerging market opportunities. This is to be accomplished by providing, or paying the costs of, approved technical assistance activities in those emerging markets. The EMP is administered by the Foreign Agricultural Service (FAS).

The Act defines an emerging market as any country that the Secretary of Agriculture determines:

(1) Is taking steps toward a market-oriented economy through the food, agriculture, or rural business sectors of the economy of the country; and

(2) Has the potential to provide a viable and significant market for United States agricultural commodities or products of United States agricultural commodities.

Because funds are limited and the range of potential emerging market countries is worldwide, proposals for technical assistance activities (“proposals”) will be considered which target those countries with: (1) Per capita income less than $9,265 (the ceiling on upper middle income economies as determined by the World Bank (World Development Indicators 2001)); and (2) population greater than 1 million. Proposals may address suitable regional groupings, e.g., the islands of the Caribbean Basin.

Authority

The EMP is authorized by Section 1542(d)(1)(D) of the Food, Agriculture, Conservation, and Trade Act of 1990, as amended (the Act). Up to $10 million is available to fund the program.

Eligible Applicants, Commodities, and Activities

Any United States agricultural or agribusiness organization, university, or state department of agriculture is eligible to participate in the EMP. Proposals from research and consulting organizations will be considered if they provide evidence of substantial participation by the U.S. industry. U.S. market development cooperators may seek funding to address priority, market specific issues and to undertake activities not suitable for funding under other FAS marketing programs, e.g. the Foreign Market Development Cooperator Program and the Market Access Program.

All agricultural products, except tobacco, are eligible for consideration. Proposals which include multiple commodities are also eligible.

Only technical assistance activities are eligible for reimbursement. Following are examples of the types of activities that may be funded:

—Projects designed specifically to improve market access in emerging foreign markets. Examples: activities intended to mitigate the impact of sudden political events or economic and currency crises in order to maintain U.S. market share; responses to time-sensitive market opportunities;

—Marketing and distribution of value-added products, including new products or uses. Examples: food service development; market research on potential for consumer-ready foods or new uses of a product;

—Studies of food distribution channels in emerging markets, including infrastructural impediments to U.S. exports; such studies should be specific in their focus and may include cross-commodity activities which focus on problems, e.g., distribution, which affect more than one industry. Examples: grain storage handling and inventory systems development; distribution infrastructure development;

—Projects that specifically address various constraints to U.S. exports, including sanitary and phytosanitary issues and other non-tariff barriers. Examples: seminars on U.S. food safety standards and regulations; assessing and addressing pest and disease problems that inhibit U.S. product exports;

—Assessments and follow up activities designed to improve country-wide food and business systems, to reduce trade barriers, to increase prospects for U.S. trade and investment in emerging markets, and to determine the potential use for general export credit guarantees for commodities, facilities and services. Examples: product needs assessments and market analysis; assessments for using facilities credits to address infrastructural impediments;

—Projects that help foreign governments collect and use market information and develop free trade policies that benefit American exporters as well as the target country or countries. Examples: agricultural statistical analysis; development of market information systems; policy analysis;

—Short-term training in broad aspects of agriculture and agribusiness trade that will benefit U.S. exporters, including seminars and training at trade shows designed to expand the potential for U.S. agricultural exports by focusing on the trading system. Examples: retail training; marketing seminars; transportation seminars; training keyed to opening new or expanding existing markets.

The Program funds technical assistance activities on a project-by-project basis. EMP funds may not be used to support normal operating costs of individual organizations, nor as a source by which to recover prior expenses from previous or ongoing projects. Ineligible activities include restaurant promotions; branded product promotions (including labeling and supplementing normal company sales activities intended to increase awareness and stimulate sales of branded products); advertising; administrative and operational expenses for trade shows; and the preparation and printing of brochures, flyers, posters, etc., except in connection with specific technical assistance activities such as training seminars. Other items excluded from funding are contained in the FY 2002 EMP Guidelines.

Project Suitability and Qualification Requirements

The underlying premise of the EMP is that there are distinctive characteristics of emerging agricultural markets that necessitate or benefit significantly from U.S. governmental assistance before the private sector moves to develop these markets through normal corporate or trade promotional activities. The emphasis is on marketing opportunities where there are risks that the private sector would not normally undertake alone. The EMP is intended to supplement, not supplant, the efforts of the U.S. private sector and it complements the efforts of other FAS marketing programs. Once a market access issue has been addressed by the EMP, further market development activities may be considered under other programs such as GSM-102 or GSM-103 credit guarantee programs, the Facility Guarantee Program, the Supplier Guarantee Program, the Market Access Program, or the Cooperator Program. Section 108 funds may be used to complement funding provided by the EMP.

The following marketing criteria will be used to determine the suitability of projects for funding under the EMP:

1. Low U.S. market share and significant market potential.

• Is there a significant lag in U.S. market share of a specific commodity in a given country or countries?
• Is there an identifiable obstacle or competitive disadvantage facing U.S. exporters (e.g., competitor financing, subsidy, competitor market development activity) or a systemic obstacle to imports of U.S. products (e.g., inadequate distribution, infrastructure impediments, insufficient information, lack of financing options or resources)?
• What is the potential of a project to generate a significant increase in U.S. agricultural exports in the near-to medium-term? (Estimates or projections of trade benefits to commodity exports, and the basis for evaluating such, must be included in EMP proposals.)

2. Recent change in a market.

• Is there, for example, a change in a sanitary or phytosanitary trade barrier; a change in an import regime or the lifting of a trade embargo; or a shift in the political or financial situation in a country?

Application Requirements and Process

It is highly recommended that any organization considering applying to the Program for FY 2002 first obtain a copy of the 2002 Program Guidelines. These Guidelines contain information on requirements that a proposal must include in order to be considered for funding under the Program.

Requests for the 2002 EMP Guidelines and additional information may be obtained from the Marketing Operations Staff at the address above. The Guidelines are also available at the following URL address: http://www.fas.usda.gov/​mos/​em-markets/​em-markets.html.

To assist FAS in making determinations regarding funding, applications should be no longer than ten (10) pages and include the following information: (a) Name of organization submitting the proposal; (b) Federal tax ID number of submitting organization; (c) date of proposal; (d) address, telephone and fax numbers of the organization; (e) full title of proposal; (f) constraint description activities (statement of problem to be addressed); (g) objectives and detailed description of project approach and specific; (h) benefits to U.S. agricultural exports as a result of the project, including specific performance measures; (i) target country/countries for proposed activities; (j) supporting market analysis of the target market(s)—brief economic analysis for each commodity and country, including current market conditions and relevant trade data—and existing size of U.S. export market share, in dollars and/or quantities, and the basis or source(s) for this data; (k) information on whether similar activities are or have previously been funded in target country/countries (e.g., under FAS's MAP and/or FMD programs); (l) a clearly stated explanation as to why participating organization(s) are unlikely to carry out activities without Federal financial assistance; (m) projected starting date (should be after 15 July 2002) and time line(s) for project implementation; (n) detailed, line item project budget, including other sources of funding and contributions from participating organizations (additional requirements are contained in the 2002 Program Guidelines) and any third party contributions. Qualifications of applicant(s) should be included, but as an attachment.

This notice is complemented by concurrent notices announcing other foreign market development programs administered by FAS including the Market Access Program (MAP), the Foreign Market Development Cooperator (Cooperator) Program, the Section 108 Program, and the Quality Samples Program (QSP). For FY 2002, EMP applicants have the opportunity to utilize the Unified Export Strategy (UES) application process, an online system which provides a means for interested applicants to submit a consolidated and strategically coordinated single proposal that incorporates funding requests for any or all of these programs. Applicants are not required to use the UES, but are strongly encouraged to do so because it reduces paperwork and expedites the FAS processing and review cycle.

Applicants planning to use the on-line system must contact the Marketing Operations Staff at [phone] to obtain site access information. A login ID and password will be supplied to a prospective applicant upon request. A “Help” file will be available to assist applicants with the process. However, the on-line application for the EMP will not be available until approximately late January. Therefore, all organizations applying for funding assistance in FY 2002 are urged to begin preparing their applications in accordance with the requirements contained herein and the FY 2002 Program Guidelines, and provide this information once the online application is available. A notice concerning the availability of the online system will be posted on the FAS web site. A printed version of the proposal should also be submitted (using WordPerfect, Word or compatible format) to one of the following addresses:

Hand Delivery (including FedEx, DHL, UPS, etc.): Marketing Operations Staff, Foreign Agricultural Service, U.S. Department of Agriculture, Room 4932-South,1400 Independence Avenue, SW, Washington, DC 20250-1042.

U.S. Postal Delivery: Marketing Operations Staff, Foreign Agricultural Service, U.S. Department of Agriculture, STOP 1042, 1400 Independence Ave., SW, Washington, DC 20250-1042.

Allocation of Funds

In general, all qualified proposals received before the application deadline will compete for EMP funding. The limited funds and the range of emerging markets worldwide in which the funds may be used preclude CCC from approving large budgets for individual projects. While there is no minimum or maximum amount set for EMP-funded projects, most are funded at a level of less than $500,000 and for a duration of one year or less. Multi-year proposals may be considered in the context of a strategic detailed plan of implementation. Funding in such cases is normally provided one year at a time, with commitments beyond the first year subject to interim evaluations.

In general, priority consideration will be given to proposals that identify and seek to address specific problems or constraints in rural business systems or food and agribusiness systems in emerging markets through technical assistance activities to expand or maintain U.S. agricultural exports. Priority will also be given to those proposals that include the willingness of the applicant to commit its own funds, or those of the U.S. industry, to seek export opportunities in an emerging market. The percentage of private funding proposed for a project will therefore be a critical factor in determining which proposals are funded under the EMP. Proposals will also be judged on their ability to provide benefits to the organization receiving EMP funds and to the broader industry which that organization represents.

Reporting Requirements

A performance report detailing the results of each project supported with EMP funds must be submitted to the Marketing Operations Staff at the address above. Because public funds are used to support EMP projects, these reports will be made available to the public. Complete final financial reports are to accompany performance reports.

Closing Date for Applications

The deadline for all applications to the EMP is 5:00 p.m. Eastern Standard Time, March 11, 2002. Announcements of funding decisions for the EMP are anticipated sometime after mid-July 2002.

Signed at Washington, DC on December 31, 2001.

Mary T. Chambliss,

Acting Administrator, Foreign Agricultural Service, and Vice President, Commodity Credit Corporation.