2018 ATP Supporting Statement 8-28-2018

Agricultural Development Program 2018 Supporting Statement

SUPPORTING STATEMENT

for the

Agricultural Trade Promotion Program

(0551-NEW)

1. Explain the circumstances that make the collection of information necessary. Identify any legal or administrative requirements that necessitate the collection. Attach a copy of the appropriate section of each statute and regulation mandating or authorizing the collection of information.

The basic authority for the Agricultural Trade Promotion Program (ATP) is contained in Authority comes from the Commodity Credit Corporation (CCC) Charter Act per 15 U.S.C. 714c – Specific Powers of Corporation. Program regulations are necessary to establish this new CCC program. Financial assistance for both programs is made available on a competitive basis. The programs are administered by personnel of the Foreign Agricultural Service (FAS).

The ATP will provide assistance to U.S. agricultural industries to conduct market promotion activities that promote U.S. agricultural commodities in foreign markets, including activities that address existing or potential non-tariff barriers to trade. This rule specifies, among other things, eligibility requirements, activities eligible for reimbursement, contribution requirements, and application procedures for the ATP. This rule also proposes a new information collection for required program information.

The ATP is a cost-share program that is designed to reimburse nonprofit U.S. agricultural trade organizations, nonprofit state regional trade groups, U.S. agricultural cooperatives, and state agencies that conduct approved foreign market development activities. When considering eligible nonprofit U.S. trade organizations, CCC gives priority to organizations that have the broadest producer representation and affiliated industry participation of the commodity being promoted. Eligible activities can be generic or branded in nature. U.S. for-profit entities whose size does not exceed 300 percent of the small business size standards published at 13 CFR part 121, Small Business Size Regulations, may participate in an ATP Participant’s brand promotion program.

The information collected will be used primarily by FAS to manage, plan, evaluate, and account for government resources. Specifically, data is used to assess the extent to which: applicant organizations represent U.S. commodity interests; benefits derived from market development efforts will translate back to the broadest possible range of beneficiaries; the market development efforts will lead to increases in consumption and imports of U.S. agricultural commodities; the applicant is able and willing to commit personnel and financial resources to assure adequate development, supervision, and execution of project activities; and private organizations are able and willing to support the promotional program with aggressive marketing of the commodity in question.

The integrity of the program hinges on information received from or maintained by the industry. Information collected provides evidence that taxpayer funds are being disbursed in accordance with authorizing legislation, ethical standards, and standard Government rules and regulations.

2. Indicate how, by whom and for what purpose the information is to be used. Except for a new collection, indicate the actual use the agency has made of the information received from the current collection.

All data collected is used by FAS marketing specialists and program managers for the allocation of funds, program management, planning, and evaluation. The data collection has, in almost every case, been mandated by either a GAO or OIG report to eliminate perceived deficiencies in the management of similar FAS programs and to establish additional program controls.

Allocation Criteria: The criteria for the allocation of funds are enumerated in the program regulations as well as the annual announcements of the ATP, which is published in the

Federal Register. FAS considers a number of factors when reviewing proposed projects. These factors include the ability of the organization to provide an experienced U.S.‑based staff with technical and international trade expertise to ensure adequate development, supervision, and execution of the proposed project; the applicant's willingness to contribute resources, including cash and goods and services of the U.S. industry and foreign third parties; the conditions or constraints affecting the level of U.S. exports and market share for the agricultural commodities and products to be promoted; the degree to which the proposed project is likely to contribute to the creation, expansion, or maintenance of foreign markets; the degree to which the strategic plan is coordinated with other private or U.S. government‑funded market development projects; and the applicant’s past export and demand expansion performance.

Applications: Through the UES application, prospective Participants will submit data about their organizations so that FAS can apply the allocation criteria discussed above. The application is also the primary strategic planning document. The application assesses market potential, demonstration of loss suffered as a result of imposed tariffs (e.g., reduced sales, lost revenue, etc.), outlines Participant strategy and goals, explains and justifies individual activities, provides estimated budgets, and includes benchmarks and goals for evaluating performance. The Participant’s application(s) to MAP and/or FMD may also dictate current application content because many activities continue or follow‑up on previous activities in MAP and/or FMD. The scope and content of each application depends largely on the applicant’s organizational style, marketing approach, and method of operation. Additionally, the Participants will be required to fill out the standard OMB SF-424 form as part of their application package.

Project Agreements: The project agreement is a binding instrument and creates a legal obligation on the part of CCC to make appropriated funds available to the Participant. The agreement creates a cooperative relationship between CCC and the Participant outlining the basic responsibilities of each party and the contributed resources to support achievement of mutual goals.

Evaluation: FAS requires applicants to submit evaluation plans and performance measures in order to (1) monitor performance of market development activities and programs, (2) evaluate the benefits and effects of these activities, and (3) document the experience gained from these activities for use in the design and implementation of future market development programs. Based on this information, FAS program managers are also better able to determine what changes are needed to improve program performance and designing future programs.

Contribution Reports: FAS requires Participants to provide part of the resources needed to conduct promotion programs. Experience has shown that as the Participants increase their financial commitment, the organization enhances program management and supervision. Participants commit to a contribution level in their applications. This is one criteria that is used in the allocation of program resources. The Participants are, therefore, held to the contribution levels they specify in their applications. Contribution reports are required to ensure program participants have met their financial and in-kind obligations.

Reimbursement Claims: The annual application, approved by FAS, and corresponding amendments provide the authorities and limitations for Participants to make expenditures under project agreements. The Participant is responsible for instituting a financial management and accounting system that ensures accurate, current, and complete disclosure of all financial transactions for each approved activity. All expenditures incurred must be proper, reasonable, and in accordance with CCC regulations. The Participant is responsible for submitting claims to FAS requesting reimbursement for incurred costs as outlined in the application. Reimbursement claims are generally submitted on a monthly basis.

Office Management Records: Other reporting and recordkeeping requirements, i.e., travel reports, office management records, salaries, etc., are required as a means of ensuring that U.S. Government resources are disbursed as judiciously as possible. FAS requires the same control of Participant spending of taxpayer funds as the U.S. Government requires of its own employees. For example, FAS asks Participants traveling on U.S. Government funds to follow provisions of the Federal Travel Regulations; the purchase of office equipment follows General Services Administration purchasing practices; and salaries and allowances paid from U.S. Government funds, in most cases, follow GS salary levels or Embassy Foreign National salary scales. Again, all of these requirements are placed on Participants in order to maximize return on investment and preserve program accountability.

Brand Program Operational Procedures. ATP Participants with branded programs are required to establish brand program operational procedures, and they are submitted on an annual basis to CCC for approval. Procedures must, at a minimum, include a brand program application, application procedures, application review criteria, brand participant eligibility requirements, a participation agreement, reimbursement requirements, compliance requirements, reporting and recordkeeping requirements, employment practices, financial management requirements, contracting procedures, and evaluation requirements. Participants will receive written official notification of whether or not the procedures are approved. Until written approval is received, Participants cannot enter into participation agreements with branded participants and may not implement any brand programs. These procedures are to be reviewed annually by the Participant.

Written Contracting Guidelines. Participants are required to submit to CCC, for CCC approval, written contracting guidelines for contracts that are funded, in whole or in part, with ATP funds. These contracting guidelines govern all of a Participant’s ATP-funded contracting involving contracts with an annual value of $35,000 or more. The guidelines indicate the method for evaluating proposals received for all contract competitions, the method for monitoring and evaluating performance under contracts, and the method for initiating corrective action for unsatisfactory performance under contracts. Participants will receive written official notification of whether or not the guidelines are approved, at which point guidelines remain in place until approval is retracted or new guidelines are approved that supersede them. Guidelines may be modified or resubmitted at any time.

Anti-fraud Prevention Program. All ATP Participants must annually submit to CCC for approval a detailed fraud prevention program. The fraud prevention program includes, at a minimum, an annual review of physical controls and weaknesses, a standard process for investigating and remediation of suspected fraud cases, and training in risk management and fraud detection for all current and future employees. Until the Participant has received written approval of their program from CCC, Participants cannot conduct any ATP activities or permit any ATP activities to occur. If the Participant receives an allegation of or information leading to a suspicion of misrepresentation or fraud, they must report it to a specified USDA contact and cooperate fully in and comply with any directives resulting from a USDA investigation.

Other Reports and Record Keeping Requirements: Other reports and records are required to ensure the proper and judicious use of Government resources. Each Participant must certify that any Federal funds received supplement, but do not supplant, private or third party funds or other contributions to program activities. Participants must submit reports of findings whenever CCC resources are used for travel or research purposes. Auditable supporting documentation is required for all expenses reimbursed with CCC resources or claimed as a contribution. These include, but are not limited to: canceled checks, invoices, samples of produced materials, etc. Personnel records, including sick and annual leave, are required to document compliance with prescribed personnel policies. As a rule, such requirements conform to generally accepted Government standards.

3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g. permitting electronic submission of responses, and the basis for the decision for adopting this means of collection. Also describe any consideration of using information technology to reduce burden.

Over the last several years, FAS has continued its efforts in making the information submission process electronic and identical for the existing FMD and MAP programs through FAS’s online Unified Export Strategy (UES) application. The new ATP program will utilize the same submission process as FMD and MAP. Applications to the ATP can be made in the UES application. Reimbursement for activities under the ATP will also be made through the same UES interface.

4. Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in Item 2 above.

FAS administers various agricultural export assistance programs, including the Foreign Market Development Program, the Market Access Program, the Emerging Markets Program, the Quality Samples Program, and the Technical Assistance for Specialty Crops Program. In an effort to facilitate the strategic planning process of applicant organizations, as well as that of the Federal government, FAS unified and simplified the application process for its agricultural export assistance programs. FAS recognized that a group interested in applying for more than one of these programs may have to submit some information multiple times. The on-line, unified application process (i.e., UES) removes duplicative information and allows Cooperators and Participants to submit a single document when applying for the existing five FAS market development programs. The ATP can become the sixth program to be added to existing five; however, due to the expected timing of when the ATP is established it will need a separate application in its first year.

The data required of Participants cannot be obtained from any other source other than the organization itself. ATP Participants will be commodity organizations or agricultural cooperatives (i.e., U.S. Wheat Associates, American Soybean Association, etc.) who develop marketing programs specifically for their commodities or products. Most of the data developed and presented to FAS is developed in‑house by marketing and commodity analysts on their staffs. Some of the data, such as consumer or market surveys, are acquired via independent third parties for evaluation purposes.

5. If the collection of information impacts small businesses or other small entities (Item 5 of OMB Form 83–1), describe any methods used to minimize burden.

Since all current program Participants are non-profit organizations or agricultural cooperatives that generally represent growers, producers, and/or exporters of specific commodities, the information collection requirements imposed by these programs do not require any significant actions on the part of small businesses. However, the agency continues to review and revise its administration of the programs to better ensure accountability of program funds and program efficiencies.

The most recent MAP and FMD information collection had 64 respondents and none are small businesses. The ATP is expected to be similar in potential respondent composition.

6. Describe the consequence to Federal program or policy activities if the collection is not conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing burden.

The data collection requirements outlined above, except for periodic billings to FAS and travel reports, have been reduced to only one submission per year from MAP and FMD. Like MAP and FMD, the new ATP program cannot be implemented without the submission of the information outlined above.

7. Explain any special circumstances that would cause an information collection to be conducted in a manner:

• requiring respondents to report information to the agency more often than quarterly;

Respondents have to respond to the reimbursement claims that are done monthly.

• requiring respondents to prepare a written response to a collection of information in fewer than 30 days after receipt of it;

• requiring respondents to submit more than an original and two copies of any document;

• requiring respondents to retain records, other than health, medical or government contract, grant–in–aid, or tax records for more than three years;

• in connection with a survey that is not designed to produce valid and reliable results that can be generalized to the universe of the study;

• requiring the use of a statistical data classification that has not been reviewed and approved by OMB;

• that includes a pledge of confidentiality that is not supported by authority established in statute or regulation, that is not supported by disclosure and data security policies that are consistent with the pledge, or which unnecessarily impedes sharing of data with other agencies for compatible confidential use; or

• requiring respondents to submit proprietary trade secret, or other confidential information unless the agency can demonstrate that it has instituted procedures to protect the information’s confidentiality to the extent permitted by law.

There are no special circumstances that require the collection of information inconsistent with 5 CFR 1320, Section 5.

8. If applicable, provide a copy and identify the date and page number of publication in the Federal Register of the agency’s notice required by 5 CFR 1320.8(d), soliciting comments on the information collection prior to submission to OMB. Summarize public comments received in response to that notice and describe actions taken by the agency in response to these comments. Specifically address comments received on cost and hour burden.

Describe efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, disclosure or reporting format (if any), and on the data elements to be recorded, disclosed, or reported.

Consultation with representatives of those from whom information is to be obtained or those who must compile records should occur at least once every 3 years –– even if the collection of information activity is the same as in prior periods. There may be circumstances that may preclude consultation in a specific situation. These circumstances should be explained.

This is a new program, but it is based on MAP and FMD. Using MAP and FMD as a guide it is assumed that FAS marketing specialists consult with their counterparts in the Participant organizations to discuss program status, evaluations, management issues, and direction. FAS leadership is also in contact with Participant executives to discuss problems, program direction, and policy, and FAS administrative personnel are in contact with their counterparts in the organizations to assist with procedural and accounting issues.

A 60-day notice is embedded in the rule.

9. Explain any decision to provide any payment or gift to respondents, other than remuneration of contractors or grantees.

The agency does not provide any payment or gift to respondents, other than remuneration of contractors or grantees.

10. Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulation or agency policy.

In the past, Cooperators and Participants have been aware that information collected relating to FMD and MAP are generally open for public inspection, but the agency may withhold information which could cause substantial competitive harm to the submitter under exemption 4 of the Freedom of Information Act (FOIA), 5 U.S.C. 552(b)(4). The same will apply to the ATP. It is also the agency's policy, prior to responding to a FOIA request, to obtain and consider the views of the submitter of the information if the information submitted is not readily identifiable as privileged or business confidential. If the agency disagrees with the views presented by the submitter, it will give the submitter sufficient time, prior to release of the information, to pursue legal action to prevent the release.

11. Provide additional justification for any questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private. This justification should include the reasons why the agency considers the questions necessary, the specific uses to be made of the information, the explanation to be given to persons from whom the information is requested, and any steps to be taken to obtain their consent.

There are no sensitive questions involved in this information collection.

12. Provide estimates of the hour burden of the collection of information. The statement should:

• Indicate the number of respondents, frequency of response, annual hour burden, and an explanation of how the burden was estimated. Unless directed to do so, agencies should not conduct special surveys to obtain information on which to base hour burden estimates. Consultation with a sample (fewer than 10) of potential respondents is desirable. If the hour burden on respondents is expected to vary widely because of differences in activity, size, or complexity, show the range of estimated hour burden, and explain the reasons for the variance. Generally, estimates should not include burden hours for customary and usual business practices.

• If this request for approval covers more than one form, provide separate hour burden estimates for each form and aggregate the hour burdens in Item 13 of OMB Form 83–1.

• Provide estimates of annualized cost to respondents for the hour burdens for collections of information, identifying and using appropriate wage rate categories. The cost of contraction out or paying outside parties for information collection activities should not be included here. Instead, this cost should be included in Item 14.

The current annual burden estimate is based on prior estimates for the FMD and MAP programs. For the ATP the annual burden estimate of 63,020 hours is based on separate estimates of 10 distinct areas of data collection: applications, project agreements with FAS, evaluations of marketing activities and programs, travel reports, contribution reports, administrative functions, office management records, brand program operational procedures, written contracting guidelines, and an anti-fraud prevention program. The estimates used to determine the burden on the public are explained as follows:

a) Applications. Applications include many separate estimates, projections, goals, etc., all of which make up a comprehensive application. The current estimate for one Cooperator or Participant to complete an application is approximately 100 hours. As explained earlier in this document, less information is requested from Cooperators and Participants than in the past, and multiple programs are applied for with a single application. Note: For the first year of implementation the ATP will require its own application.

b) Program Agreements. This includes preparing new or amending already active program agreements. Participating organizations take approximately 1 hours to review the project agreement (contract), clear them with legal counsel (if necessary), sign them, and return them to FAS. On average, 280 program agreements are signed each year. The ATP will potentially add an additional 70 program agreements.

c) Evaluations. Cooperators and Participants are required, under the proposed ATP regulation, to evaluate the effectiveness of their programs. FAS encourages Participants to use the GPRA as a guideline for their evaluations. Applications include evaluation plans and performance measures in order to (1) monitor performance of market development activities and programs, (2) evaluate the benefits and effects of these activities, and (3) document the experience gained from these activities for use in the design and implementation of future market development programs. Establishing good performance measures enables Cooperators and Participants to perform meaningful evaluations. Based on these evaluations, Participants, and FAS program managers are better able to determine what changes are needed to improve program performance and designing future programs. It is estimated that it will take approximately 59 hours to complete annual evaluations, analyze its results, and develop a written report which summarizes the evaluation process and findings.

d) Travel Reports. Since travel is a very important part of overseas market development, the number of trips involving both 1) the United States and 2) foreign countries amounts to about 2,560 trips per year. As the U.S. Government requires trip reports from government employees, FAS also finds this type of information extremely useful as a management tool. Cooperator and Participant trip reports provide valuable insight to market situations and program issues. The average time required to prepare travel reports is 1 hours per Cooperator or Participant.

5. Contribution reports. Each Participant will prepare a summary contribution report each year via a web-based interface. Depending on the size and scope of the program, smaller Participants may need only several hours to prepare the report, whereas larger Participants may need several weeks. The average time required to prepare the contribution report is 8 hours per Participant.

f) Administrative Procedures. Participants will be responsible for submitting reimbursement claims to FAS requesting reimbursement for program expenditures. Participants bill FAS whenever they feel their costs are of sufficient size to justify a claim for reimbursement. Participants are required to maintain receipts for all program related expenditures in excess of $25.00. The estimate of 40 hours per claim includes all incidental office costs and procedures necessary to prepare and support each claim.

g) Office Management. Participants will be required to keep good office records available for audit. These records include such things as salary computations, receipts for all disbursements, time and attendance records, etc. Only 11 Cooperators have foreign offices supported by Cooperator project funds. In addition, FAS requirements apply only to Cooperator overseas offices and only if a portion of the cost is paid with project funds or counted as a contribution. The average time required to prepare and maintain office records is 90 hours per Participant.

h) Brand Program Operational Procedures. Participants with branded programs are required to establish brand program operational procedures that must be submitted on an annual basis to CCC for approval (not all Participants have branded programs). Procedures must, at a minimum, include a brand program application, application procedures, application review criteria, brand participant eligibility requirements, a participation agreement, reimbursement requirements, compliance requirements, reporting and recordkeeping requirements, employment practices, financial management requirements, contracting procedures, and evaluation requirements. The average time required to prepare the brand program operational procedures is 2 hours per Participant.

1. Written Contracting Guidelines. Under the new MAP regulation effective as of the 2013 program year, Participants are required to submit to CCC, for CCC approval, written contracting guidelines for contracts that are completely or partially funded with MAP funds. These contracting guidelines govern all of a Participant’s MAP-funded contracting involving contracts with an annual value of $35,000 or more. The guidelines indicate the method for evaluating proposals received for all contract competitions, the method for monitoring and evaluating performance under contracts, and the method for initiating corrective action for unsatisfactory performance under contracts. The average time required to prepare the contracting guidelines is 2 hours per Participant.

j) Anti-fraud Prevention Program. Participants must annually submit to CCC for approval a detailed fraud prevention program. At a minimum, the program must include an annual review of physical controls and weaknesses, a standard process for investigating and remediation of suspected fraud cases, and training in risk management and fraud detection for all current and future employees. The average time required to prepare the fraud prevention program is 2 hours per participant.

The estimated total cost to respondents for reporting and recordkeeping is $3,172,000 based on the following:

		NUMBER OF		TOTAL	AV HOURS	TOTAL	COST	COST TO
DESCRIPTION		RESPONDENTS	FREQ	RESPONSE	PER RESP	HOURS	PER HOUR	PUBLIC
A)	Applications	70	1	70	100	7,000	$70	$490,000
B)	Project Agreements	70	4	280	1	280	$80	$22,400
C)	Evaluation of Marketing	70	1	70	59	4,130	$70	$289,100
	Activities and Programs
D)	Travel Reports	70	32	2240	1	2,240	$65	$145,600
E)	Contribution Reports	70	1	70	8	560	$45	$25,200
F)	Administrative Procedures	70	17	1190	40	47,600	$45	$2,142,000
G)	Office Management Records	10	1	10	90	900	$40	$36,000
H)	Brand Program Operational	15	1	15	2	30	$70	$2,100
	Procedures
I)	Written Contracting Guidelines	70	1	70	2	140	$70	$9,800
J)	Anti-fraud Prevention Program	70	1	70	2	140	$70	$9,800
	TOTAL		60	4,085		63,020		$3,172,000

13. Provide an estimate of the total annual cost burden to respondents or recordkeepers resulting from the collection of information. (Do not include the cost of any hour burden shown in Items 12 and 14).

• The cost estimate should be split into two components: (a) a capital and start–up cost component (annualized over its expected useful life); and (b) a total operation and maintenance and purchase of services component. The estimates should take into account costs associated with generating, maintaining, and disclosing or providing the information. Include descriptions of the methods used to estimate major cost factors including system and technology acquisition, expected useful life of capital equipment, the discount rate(s), and the time period over which costs will be incurred. Capital and start–up costs include among other items, preparations for collection information such as purchasing computers and software; monitoring, sampling, drilling and testing equipment; and record storage facilities.

• If cost estimates are expected to vary widely, agencies should present ranges of cost burdens and explain the reasons for the variance. The cost of purchasing or contracting out information collection services should be a part of this cost burden estimate. In developing cost burden estimates, agencies may consult with a sample of respondents (fewer than 10), utilize the 60–day pre–OMB submission public comment process and use existing economic or regulatory impact analysis associated with the rulemaking containing the information collection, as appropriate.

• Generally, estimates should not include purchases of equipment or services, or portions thereof, made: (1) prior to October 1, 1995, (2) to achieve regulatory compliance with requirements not associated with the information collection, (3) for reasons other than to provide information or keep records for the government, or (4) as part of customary and usual business or private practices.

(a) There is no cost burden to respondents associated with capital or start-up costs.

(b) There is no cost burden to respondents associated with operating or maintaining systems or purchasing systems.

14. Provide estimates of annualized cost to the Federal Government. Also, provide a description of the method used to estimate cost, which should include quantification of hours, operational expenses (such as equipment, overhead, printing, and support staff), and any other expense that would not have been incurred without this collection of information. Agencies also may aggregate cost estimates from Items 12, 13, and 14 in a single table.

The estimated annual costs to the Federal Government for all submissions found in the guidelines are as follows:

ITEM ORG GRADE RATE HOURS COST

A) Applications POD 13 $45.54 90 $4,099 COPD 13 $45.54 22,520 $1,025,561

B) Agreements POD 11 $31.95 140 $4,473

C) Evaluations POD 13 $45.54 270 $12,296

COPD 13 $45.54 1,350 $61,479

E) Contributions POD 11 $31.95 810 $25,880

COPD 12 $38.30 80 $3,064

F) Administrative Procedures POD 11 $31.95 4,510 $144,095

TOTAL $1,280,947

Note: POD refers to the Program Operations Division of FAS. This office is responsible for administrative operation of the MAP and Cooperator program. COPD refers to the Cooperator Programs Division of FAS which is responsible for review of application and evaluation content and day to day contact with program participants.

15. Explain the reasons for any program changes or adjustments reported in Items 13 or 14 of the OMB Form 83–I.

This is a new program resulting in a program change of 63,020 burden hours.

16. For collections of information whose results will be published, outline plans for tabulation and publication. Address any complex analytical techniques that will be used. Provide the time schedule for the entire project, including beginning and ending dates of the collection of information, completion of report, publication dates, and other actions.

FAS has no plans to tabulate or publish the information FAS collects.

17. If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons that display would be inappropriate.

There are no forms associated with this information collection.

18. Explain each exception to the certification statement identified in Item 19, “Certification for Paperwork Reduction Act Submissions” of OMB Form 83–1.

There are no exceptions.

7