Ad Hawk

...If it seems odd to you that the U.S...

...Bought an $8 jar of Skippy lately...

...At least the peanut farmers will tell the public where their money goes—to market Skippy in Korea and Taiwan and to sell honey roasted peanuts to the French...

...Yet in 1989, McDonald's got a handout from the feds to advertise its Sausage McMuffins in Hong Kong...

...Instead of just arguing for relaxed trade barriers at GATT talks, the U.S...

...And even Ursula Hotchner of that nice Newman's Own (whose profits, she notes, go to Paul's favorite charities) refuses to discuss any specifics of the overseas advertising efforts her company undertakes with federal dollars...

...Here's an entrepreneur who commands multimillion-dollar salaries for his films, and his gourmet goodies are on the dole...

...And the bigger the corporation, the bigger the check...

...But as USDA's own magazine, AgExporter, notes, "Pillsbury has cultivated the Japanese market since the seventies...

...Last year's $200 million Marketing Promotion Program budget was bigger than that of the Department of Commerce's entire International Trade Administration (ITA), which provides marketing assistance for all U.S...

...government would subsidize wine tastings in Tokyo or radio campaigns in Turkey, it's even odder which companies it chooses to fund...

...Trade Representative (OTR...

...Instead of buying brand-name billboards, ITA runs programs that try to link U.S...

...footwear manufacturers in Europe...

...money inexplicably helped Nestle, the Swiss-owned chocolate and baby formula behemoth, promote its candy bars...

...Gallo refuses to answer any questions regarding its marketing...

...These corporate subsidies have nothing to do with making America more competitive...

...Now take a look at a carton of Dole Pineapple Juice...

...The bottom line with the program is that it's a corporate welfare program," Schumer charges...

...And, at least until recently, no one but you, the government, and the trade association ever had to know...

...Rather, they're some of the most powerful and profitable multinational conglomerates around—companies that don't need anyone's help (let alone taxpayers') when it comes to peddling their wares...

...In fact, by giving weight to a company's international sales history the program is structured to ensure that the biggest companies will get the most money...

...This means that the biggest wineries, many of which have been exporting for years and are the most capable of carrying out promotion campaigns without public assistance, garner most of the support...

...While some congressmen inevitably prefer pork barrel politics to policy debates, there are some serious questions here...

...It boasts 70 billion served worldwide...

...At a budget committee task force hearing last year, Kansas Rep...

...peanut farmers...

...agricultural firms may seem like small potatoes...

...The Market Promotion Program is no different...

...New York Rep...

...well, nobody, including the USDA, seems to know exactly what they do...

...Federal subsidies were being used to do exactly what the company had done for years, with minimal apparent difficulty, using its own funds...

...For some 50 years, those farmers have enjoyed both lucrative government price supports and strict quotas on peanuts imports— the same kind of trade practices we label unfair when imposed by other nations...

...company...

...It's his salad dressing and spaghetti sauce that have got us wondering...

...I would hate to see a lot of programs jeopardized because of an attempt to drive a train through agriculture programs...

...import restrictions or price supports on commodities like wool and peanuts—instead of funneling even more money into international ad departments...

...But to make the public shelling complete, the farmers' trade association, the National Peanut Council, has received more than $27 million over the past six years from its friend, the Marketing Promotions Program...

...Doug Turetsky is a New York writer...

...Korea, Malaysia, and New Zealand reserve some of their most daunting tariffs for fruit juice...

...ITA has the right idea...

...Over the past three years, Newman's Own has received more than $100,000 from the U.S...

...Buying the farm Given the broad array of criticisms of the export subsidy program, the poor USDA oversight, and the massive federal deficit, why does Congress allow major corporations to continue dining at public expense...

...Still, one example of what our tax dollars are buying can be excavated from documents provided by the USDA...

...More soybean margarine sold in Britain, more Italians eating California prunes, more Norwegians cracking Georgia peanuts...

...While USDA's theory is that bigger companies can get more bang for their advertising buck, GAO claims that theory is remarkably untested...

...You actually need a license to join the elite group that comprises the nation's peanut farmers...

...We don't give a damn about the companies...

...Perhaps because some of USDA's biggest "promotional" grants went to affluent companies whose promotional efforts were going along swimmingly—tariffs or no—before the government ever offered to help...

...agricultural businesses overcome unfair trade practices...

...We're exporting something of our culture," effuses Nancy Light of the Wine Institute, an industry trade group that's divided some $10 million in federal money among California wine groups since the marketing program began...

...In 1989 the Wine Institute received $7 million from the promotion program for "tasting shows" and store promotions in Japan and Europe...

...Howland says the USDA or the trade association handling the federal allocations will look to the biggest seller in that market—say, McDonald's—and offer promotion subsidies...

...It simply upped the number of acres of corn it plants at its own facility in Buhl, Idaho...

...in Paris, Rome, and Tokyo, young people flock to the golden arches to be seen and to drink milkshakes...

...Our money never goes to private corporations," says an ITA spokesman...

...Even USDA is reluctant to talk turkey about how all that money is spent, providing only general information...

...They certainly don't cover cocktail parties or flights," she says helpfully...

...I have supported food stamps, urban programs," Glickman reminded them...

...Research assistance was provided by James Lee...

...William Quarles, a vice president with Sunkist, gets testy when asked how he spends the federal money...

...If the amount of money wasted on the Market Promotion Program seems paltry when compared to a $500 billion S&L bailout or a $50 billion war, think of the $200 million given away last year as a small symbol of a large trend: the boom in welfare-for-thewealthy programs during the eighties...

...The only people we care about are the private farmers," says one USDA staffer...

...money to corporate ad execs boosts foreign purchases of specific goods or not...

...A big reason the public doesn't hear much about the millions it spends promoting cigarettes and candy abroad is that information on the federal marketing program is notoriously hard to come by—even if you're from the General Accounting Office (GAO...

...Dan Glickman was one of several agriculture committee members to punctuate his defense of subsidies like the export program with a stark threat to his urban peers...

...As we've seen, and the GAO recently speculated, that law simply put into writing what had been fact since the program's inception...

...treasury...

...Many companies on USDA's dole won't...

...In the six years since the USDA marketing program began, nearly $1 billion in such grants have been allocated to persuade overseas consumers to buy American agricultural products—products from bovine semen to chicken breasts to cigarettes...

...But ITA doesn't line the pockets of Microsoft and Maidenform...

...More than six dozen companies were granted subsidies by the institute, including tiny vintners like Stag's Leap, Valley of the Moon, and Hacienda, which got $5,000 each...

...Twothirds of that money went to trade associations like the U.S...

...and car makers in Indonesia, where the car tariff ranges from 100 to 200 percent...

...Where the playing field is truly tilted, industries—although not private companies— deserve special help...

...government largess...

...In its 1990 report, it charges that the USDA makes virtually no effort to evaluate whether the program works at all—whether U.S...

...In 1989, when the GAO first sought the names of the companies and amounts of the subsidies, USDA claimed no comprehensive list existed...

...Yet when million-dollar recipient Pillsbury needed to increase production of that Green Giant corn, it didn't turn to private farmers...

...Couldn't you spend it on a "Buy Idaho Spuds" campaign...

...Let's say the USDA wants to boost sales of french fries in Hong Kong as a means of increasing the export of Idaho potatoes...

...In the past five years it has spent more on advertising than virtually any other U.S...

...Some executives even make it sound as if they're performing a patriotic duty by marketing their wares overseas...

...Participants no longer have to prove their products faced unfair trade practices to get government money...

...Then there's the aptly named Dole companies, which swallowed some $3.9 million in federal subsidies through a variety of channels...

...Rather, it goes for technical assistance to various industries attempting to develop their markets overseas...

...Poultry and Egg Export Council and the Tobacco Associates...

...In 1989, $287,000 in U.S...

...government might consider revising its own, more subtle industrial policy by eliminating U.S...

...When it comes to farm policy, Congress is generally one big team—perhaps because farm-belt legislators are so skilled at calling in favors when farm bills hit the floor...

...Take McDonald's...

...In addition, Dole is a subsidiary of the multinational conglomerate Castle and Cook, whose fruit farms in Costa Rica, Honduras, and the Philippines are often blamed for undercutting the U.S.'s own citrus farmers...

...The Dole Nut Company had its own $188,000 contract with the agency...

...But perhaps the most disturbing beneficiaries of the Marketing Promotion Program are those industries that, instead of facing unfair trade practices abroad, are legendary for promoting them at home—like U.S...

...That sounds equitable and democratic—until you look at all the numbers...

...companies to foreign distributors, prints a monthly promotional magazine, and sponsors pavilions at overseas trade shows...

...The fine print on the container reveals that the juice was made from concentrate produced in Hawaii—and in the Philippines and Thailand, where growing and harvesting costs are cheaper than in the U.S...

...government to push their products abroad All in all, PAul NEwman seems like a staright-up guy-the liberal causes, the lasting marriage, those sporty little cars...

...One day you're paging through the latest newsletter of the regional corngrowers association when you happen upon an item offering federal money to companies just like yours...

...Not to be left out, the Florida Department of Citrus squeezed another $26,000 in federal funds into Dole's cup...

...Part of the reason is that there's precious little debate over national farm policy...

...goods and services except agricultural products—that is, everything from software to underwear...

...Blue Diamond, the California almond company, used some of its millions in subsidies to insert advertisements on wrestling videotapes shown in Kuwait...

...But building that level field involves taking a hard look at the home team, too...

...Despite the USDA program's supposedly essential role in upping overseas sales, GAO notes that government program officials haven't demonstrated that, in the absence of public subsidies, overseas promotional activities could not have taken place (or, in fact, were not already taking place...

...Is funneling USDA money into the advertising budgets of our biggest corporations really the best way to achieve that...

...according to USDA data, the largest farm payments in 1988 went to people with average net incomes of $96,000...

...Consider Minnesota-based Pillsbury, home of the popping-fresh Doughboy and the Jolly Green Giant...

...The remaining $68 million was doled out—with minimal documentation and virtually no public oversight—to several hundred private corporations to do...

...Send them a few-page description of your ideal plan for capturing the Sri Lankan corn market and tens of thousands—even millions—of government dollars can be yours...

...Of course, some companies—like Sunkist, a $9 million winner—do face significant barriers to marketing overseas...

...money necessary to make Gallo, McDonald's, and Sunkist successful overseas...

...Department of Agriculture (USDA) enterprise called the Market Promotion Program, some of the biggest private corporations in the country receive millions each year in public money to fund ads, billboards, and supermarket displays abroad...

...These protections hit taxpayers twice—in the public treasury and in the private purse...

...Consumers buy by brands of products," Howland explains, "not by generics...

...Joe Rollo, director of the Wine Institute's international department, says the trade group parcels out the money based on such criteria as each winery's "history and experience in export," as well as previous sales and the size of the administrative staff (to ensure the ability to process orders...

...While the California Prune Board and the California Raisin Advisory Board together kicked in nearly $2 million, the Dole Fresh Fruit Company got another $2.18 million subsidy directly from USDA...

...It wasn't until last year that the GAO succeeded in compiling such a list...

...Since its creation in 1985 (under the name Targeted Export Assistance Program) the quiet Marketing Promotion Program has become the biggest federal export assistance program in the entire U.S...

...And while it's true that Japan enacts considerable barriers on corn used for animal feed, frozen peoplecorn appears nowhere on a comprehensive list of barriers compiled by the Office of the U.S...

...It's a subsidiary of the British conglomerate Grand Metropolitan PLC, which had a net income of $506 million when Pillsbury received more than $1 million from the U.S...

...But Ken Howland, USDA's deputy assistant administrator, is quick to defend the practice of giving the most to the biggest...

...When the nation faces a $3 trillion deficit, the $68 million spent last year to subsidize the overseas advertising of U.S...

...they have everything to do with big business's political power...

...While the USDA perpetually invokes small farmers in desperate need, the bulk of its subsidies often wind up in the pockets of the biggest producers...

...Why such reticence about a marketing program crafted for the perfectly reasonable mission of boosting overseas agricultural sales in the face of unfair European, Japanese, and other trade restrictions...

...Charles Schumer, a longtime opponent of the subsidies, claims the original impetus came not from a congressional concern with countering unfair tariffs and restrictions but from a desire to appease powerful agricultural constituents who claimed that their products were left out of the nation's hefty farm subsidy programs, which give special subsidies to commodities like honey, sugar, wool, dairy products, and mohair...

...government to help it hawk its products overseas...

...In the world of government-subsidized advertising, of course, $100,000 to Newman's Own is barely a crouton...

...Of course, millions of dollars in targeted advertising does tend to increase sales...

...But to USDA marketing program officials, the size, ownership, advertising history, and trade obstacles of a given company seem to be irrelevant...

...Forget labels like Democrat and Republican, liberal and conservative...

...Corn dogs Imagine you're the CEO of the Kansas-based Jumbo Processed Corn...

...What's more, Pillsbury isn't even an Americanowned company...

...Not exactly top secret stuff, but you can see why company ad directors and government officials aren't bragging...

...The biggest award went to the biggest winery in the United States—Gallowhich received $2.2 million, or nearly one-third of all the money set aside for the industry...

...But the bottom line is this: Do you really think Paul Newman and the Jolly Green Giant need your help...

...Let's assume that the export subsidy program aims to help U.S...

...But amazingly, as it's grown, it's managed to sell out its original purpose—to rectify foreign wrongs—altogether...

...Still, McDonald's is an American company...

...In addition to $90,000 channeled to it through a regional trade association, Pillsbury received $1.139 million directly from USDA in 1989 to market its Green Giant frozen corn in Japan...

...Despite the rhetoric with which the program was founded, many of the beneficiaries of this government giveaway aren't companies squeezed out by the unfair trade practices of competitor nations or even struggling enterprises whose survival might depend on U.S...

...For what...

...What if McDonald's doesn't need the money...

...Through a littleknown U.S...

...And unlike USDA, ITA still devotes most of its energies to helping American industries blocked by foreign trade bans—telecommunications and computer companies in Korea and Japan...

...In the past Congress, while allocating $1 billion to the program over the next five years, legislators also made one minor change to the program's mandate...

...The question is, was U.S...

...To rebut this charge, the USDA offers an impressive list of "success stories"—examples of rising foreign sales in conjunction with the advertising and promotion subsidies...

...The reluctance of company executives to talk about how they spend their federal subsidies, or even how much of their advertising budgets are composed of public dollars, might make you forget that you're paying for their ads...