Promotion programs that subsidize advertising for exported agricultural products continue to be used despite much criticism that they are an inefficient use of taxpayer money. At the same time, others have advocated for an increase in funds to support domestic advertising for fruits and vegetables. We investigate the economic and nutritional effects from changes in both export and domestic promotion expenditures for horticultural and nonhorticultural commodities. Simulation results show that even modest decreases in trade promotion expenditures coupled with a corresponding increase in domestic promotion efforts have the capacity to influence domestic market conditions, caloric intake, and nutrient consumption.

Federal subsidies for nonprice export promotion of farm products have been criticized on the grounds that they merely substitute taxpayer dollars for private promotional expenditures. This “displacement hypothesis” is tested by estimating export demand and advertising-goodwill re-lations using time series data for 1975-2008. The displacement hypothesis receives some support in that three of the nine tests show an inverse relationship between industry and government expenditures. However, the remaining tests show no relationship. These results, coupled with the finding of Kinnucan and Cai (2011) that expenditures for export promotion may be too high when consumer impacts are taken into account, suggest it is time to let the Market Access and Foreign Market Development programs operated by the U.S. Department of Agriculture lapse.

South Korea's economic takeoff in the 1960s triggered a scholarly debate over the causes behind its economic growth. Neoclassical economists and “statist” scholars focused on government policies toward the industrial sector, but as this article shows, they have neglected to consider the political economy behind the government's targeting of the agricultural and livestock sectors for export promotion. In fact, the South Korean government's support of export-led growth—aimed at the rural sector as well as industry—transformed the nation's agricultural and livestock institutions from instruments of development and export promotion into protectionist mechanisms. This article discusses how complete market liberalization would have resulted in more efficient resource allocation and reveals how political considerations affected the institutional arrangement in the South Korean countryside and the subsequent liberalization of agricultural and beef markets.