NON-PRICE PROMOTION IMPACTS ON COTTON AND SOYBEANS EXPORTS UNDER EXCHANGE RATE LINKED SUBSIDIES

Issue of exchange rate-linked subsidies for non-price export promotion has recently emerged as an area of interest among marketing researchers because of fluctuating strength of US dollars and position of US agricultural goods in export markets. One solution to mitigate these impacts was to link the federal export promotion subsidies with the changing value of US dollars. In the study, an equilibrium displacement framework was developed to analyze the effectiveness of exchange rate-linked subsidies for non-price promotion by comparatively analyzing its effectiveness on US soybeans and cotton. The study result shows that an increase in promotion expenditure with an increase in the strength of US dollars and vice versa promotes the export of US cotton and soybeans in export markets and increases the efficiency of federal export promotion programs. Even though transportation cost elasticity was one of major focuses of this study, it emerged as an insignificant factor.