Dairy Export Incentive Program (DEIP) helps exporters of U.S. dairy products
meet prevailing world prices for targeted dairy products and destinations. Under
the program, the U.S. Department of Agriculture (USDA) pays cash bonuses to
exporters, allowing them to sell certain U.S. dairy products at prices lower
than the exporter's costs of acquiring them. The major objective is to develop
export markets for dairy products where U.S. products are not competitive
because of the presence of subsidized products from other countries.
The DEIP was announced by USDA on May 15, 1985, and was reauthorized by the
Food, Agriculture, Conservation, and Trade Act of 1990; the Uruguay Round
Agreements Act of 1995; the Federal Agriculture Improvement and Reform Act of
1996; the Farm Security and Rural Investment Act of 2002; and the Food,
Conservation and Energy Act of 2008. As part of its World Trade Organization
commitments resulting from the Uruguay Round Agreement on Agriculture, the
United States has established annual export subsidy ceilings by commodity with
respect to maximum permitted quantities and maximum budgetary expenditures.
The DEIP, administered by USDA’s Foreign Agricultural Service (FAS), helps U.S.
agricultural producers, processors, and exporters gain access to foreign
Commodities eligible under DEIP initiatives are milk powder, butterfat, and
An exporter interested in participating in the DEIP must provide specific
information, including a/an:
1) office and agent for service of legal process in the United States,
with names and street addresses
2) description and documented proof of business structure—how and where
3) Dun and Bradstreet number
4) certified statement describing participation, if any, during the
past 3 years in U.S. government programs, contracts, or agreements
5) certified statement that the exporter is not debarred, suspended, or
proposed for debarment from any federally administered program
In addition, exporters must post a performance security before submitting a
request for a bonus.
Making a Sale
All sales under the DEIP are made by the private sector, not the U.S.
government. An invitation for offers issued by USDA may be one of two types:
those inviting exporters to submit a competitive offer for a bonus, and those
inviting exporters to apply for an announced bonus. Once an invitation for
offers is issued, it is up to agricultural exporters to contact prospective
buyers in eligible countries and negotiate a sales contract covering price,
quantity, quality, delivery, and other terms. The sale may be contingent on
USDA’s approval of a bonus. Each prospective exporter submits an offer to USDA
requesting a bonus that would allow the sale to take place at the agreed price.
Under an invitation for competitive offers, USDA reviews all bids for the
competitiveness of the bonus value requested and compares the bids with offers
from other U.S. exporters and with sales of competitor countries. Under an
announced bonus, compliant offers meeting all program requirements are accepted
on a first-come, first-served basis. USDA has the right to reject any or all
Once USDA accepts a bid, the exporter and USDA’s Commodity Credit Corporation
(CCC) enter into an agreement. USDA notifies exporters submitting offers of the
acceptance or rejection of their offers by 10 a.m. Eastern U.S. time the next
business day after the date the offers were submitted for consideration. USDA
also makes the information available in a program announcement on the FAS Web
Receiving the Bonus
The bonus is paid to the U.S. exporter in cash. The CCC determines the bonus
payment by multiplying the bonus specified in the agreement by the net quantity
of the commodity exported. Once an exporter furnishes USDA with evidence that
the specified commodity has been exported to the target destination under the
terms of the agreement, the exporter can request payment of the bonus.
For more information, contact: Credit Programs Division, Office of Trade
Programs, FAS/USDA, 1400 Independence Ave. SW, Mail Stop 1025, Washington, DC
20250-1025; tel.: (202) 720-6211; fax: (202) 720-2495.
General information about FAS programs, resources, and services can be found