October 9, 2013
Last fall, Congress allowed the farm bill to expire without a new bill to take its place. Instead, Congressional leaders cobbled together an awful and temporary extension of the old farm bill on New Year’s Eve that shut down a number of innovative programs indefinitely.
As of October 1, Congress has once again allowed the farm bill to expire, and these programs are now at risk of becoming permanently “stranded” without funding. These stranded programs impact over half of the agricultural sector – including fruit and vegetable, organic, renewable energy, livestock, minority, and beginning farmers – and invest in sustainable food systems, rural job creation, and the next generation of farmers. Unless Congress takes action, these innovative and forward-looking programs will disappear.
This is the third post in our What’s at Stake in the Farm Bill? series that focuses on ten of the stranded programs and how their expiration impacts farmers and communities throughout the country.
The soaring consumer demand for food and agricultural products from local farmers and regional markets, along with slow growth and out-migration in large swaths of rural America, present a unique set of challenges. Local and regional farm and food-related businesses, are a critical component to addressing those challenges by helping to create new jobs, bolster farm incomes, reverse out-migration, and enhance access to fresh and healthy foods.
Over the past decade, Congress has created several programs in the Farm Bill that help farmers and local food businesses scale up in the marketplace, provide rural entrepreneurs and communities with a stronger financial footing, and spur energy conservation and renewable energy generation. These successful programs include the Farmers Market Promotion Program, Value-Added Producer Grants Program, and Rural Energy for America Program. Together, these programs have helped build new and expand existing rural businesses, develop local and regional food systems, reduced energy consumption, and strengthen community and economic community development.
Unfortunately, all three programs join a long list of “stranded” programs that have remained de-funded since last fall when Congress allowed the 2008 Farm Bill to expire and then passed a farm bill extension that excluded these programs. With Congress having yet to enact a new farm bill, over a year has gone by in which farmers, consumers, rural business owners and rural communities have missed out on the resources, opportunities, and innovations these and other U.S. Department of Agriculture (USDA) programs provide.
Farmers Market Promotion Program: Connecting Farmers to Consumers for Health and Economic Benefits
Fifth generation farmer Jody Hardin and his community in North Little Rock, Arkansas are just one of many examples of the difference the Farmers Market Promotion Program (FMPP) can make. In 2009, Jody, in partnership with Delta Land and Community, received an FMPP grant to improve sales at the Certified Arkansas Farmers Market (Arkansas Market), a farmers market that he founded in the food desert of Argenta (North Little Rock).
Managed by USDA’s Agricultural Marketing Service (AMS), the FMPP is a competitive grant program that funds marketing proposals for community-supported agriculture (CSA) programs, farmers’ markets, roadside stands, and other direct marketing strategies such as agritourism. Specific grant uses include developing relevant financial and marketing information, business planning, improving market access and education for consumers, organizing markets and direct marketing networks, and supporting innovative approaches to market management and operations. By fostering market development and promotion, FMPP boosts farm income and stimulates economic development.
The FMPP grant helped Jody and his staff create food festivals at the Arkansas Market coinciding with peak harvest periods that increased customers and sales for farm vendors. According to Jody, the customer base went from 400 per market day to over 1,000. As farmers learned of the increasing consumer demand, the Arkansas Market went from between 12 to 15 farm vendors per market day to over 30.
The FMPP grant also contributed to direct relationships between the farmers participating in the Arkansas Market and 20 top Little Rock chefs. Those chefs were recruited to partner with farmers at the food festivals, and subsequently began buying directly from the famers.
Jody sums up the impact of the FMPP this way:
The FMPP grant was an incredible opportunity…All in all, we were able to build a larger clientele, we were able to build a larger base of farmers, and we generated dollars back into the local economy.
By building the distribution, aggregation, and marketing infrastructure necessary to respond to growing consumer demand for local and regional food, these programs benefit not only our nation’s farmers and ranchers, but other sectors as well. Every two jobs created at a farmers market supports an additional job in another sector of the local economy. In describing the economic ripple efforts of a successful farmers market, Jody says that:
The success of this farmers market has led to the development of new restaurants in the area, the new grocery store Argenta Market that I co-founded, and unprecedented real estate development in the downtown North Little Rock area.
As one of the fastest growing sectors in American agriculture, direct-to-consumer channels need the continued support of programs like FMPP to help local and regional producers and their communities thrive.
Value-Added Producer Grants Program: Expanding Food Choices and Marketing Opportunities
In addition to exploring new markets, farmers also look for ways to differentiate their product – either by changing the product’s physical state to create a new product (such as cheese from milk), using a specific production process to establish a special identity (such as organic fruit or grass-fed meat), physically segregating a commodity in production and distribution (such as GMO-free corn), or linking the farmer to a local or regional supply chain (such as a farm to school network). Each of these activities can add value to a farmer’s product.
Since 2000, the Value-Added Producer Grants (VAPG) program has provided competitive grants to individual and groups of independent agricultural producers to develop value-added producer-owned businesses. VAPG grants can be used to acquire working capital or to fund business plans and feasibility studies needed to establish viable marketing opportunities.
Administered by USDA Rural Development, VAPG not only helps increase producer income and marketing opportunities, but also enhances food choices for consumers, and improves the local economy through job creation and retention.
Burbach Countryside Dairy, in Hartington, Nebraska, was among 15 dairies from 12 states to receive a VAPG award in May 2013 – the latest round of funding. In total, over 110 agricultural producers from 43 states were awarded VAPG grants totaling nearly $16.8 million.
Burbach Countryside Dairy owners and operators, Dean and Lisa Burbach, started their dairy farm in 1999. In 2005, the Burbachs decided to launch on-farm milk processing and build a bottling plant. They sold their first returnable glass-bottled milk early in 2006 to three grocery stores. Today, they sell to over 70 grocery stores in Nebraska, Iowa and South Dakota. In addition to selling milk, the Burbachs also sell cream and a variety of cheeses and cheese curds. Their VAPG grant will help the Burbachs with expanding and marketing their line of fluid milk products.
As one of the few grant programs designed to provide funding for private, for-profit agricultural producers seeking to expand, VAPG is critical to the stability of small and mid-sized producers – providing ways to diversify products and markets and providing consumers with more local and sustainably-produced food options.
Rural Energy for America Program: Promoting Cost Savings and Resource Conservation
Renewable energy and energy efficiency projects can help producers curb rising production costs and increase profits, while reducing their environmental footprint. Take Chuck Bushman, who runs an organic chicken and dairy farm in Castalia, Iowa, with 750 acres of farmland, 10,000 laying hens, and 75 milking cows. In early 2013, thanks to the Rural Energy for American Program (REAP), Bushman was able to install solar panels on his farm that reduce his utility bills by 90 percent – from $1,600 per month to $170 per month.
The 360 solar panels on the roof of his poultry barn and farm sometimes generate more electricity than needed, allowing Bushman to “bank” the extra electricity on the grid for those days when his electricity demand exceeds what he generates. REAP also helped fund smart meters for the chicken coop and other buildings to monitor where electricity demand is highest.
Photo Credit: Environmental Law & Policy Center
Since its creation in 2002, REAP has made matching grants and loan guarantees available to farmers, ranchers, and rural businesses to increase energy efficiency and produce energy from renewable energy sources. Specifically, REAP funds energy audits and feasibility studies, energy efficiency improvements and the installation of renewable energy systems. To date, the program has provided farmers, ranchers, and rural small businesses with grants and loans for over 9,000 energy efficiency and renewable energy projects in all 50 states.
The success and popularity of REAP is evident, with a broad range of projects funded across the country. In fact, project proposals increasingly outpace available funds. Continued funding for a cost-sharing program such as REAP is essential to meet this high need and help farmers reduce their energy bills, conserve resources, and improve their bottom line.
Next Steps to Strengthening Local Food Systems and Rural Communities
The Farmers Market Promotion Program (to be expanded and renamed the Farmers Market and Local Food Promotion program in both the House and Senate versions of the new Farm Bill), Value-Added Producer Grants program, and Rural Energy for America Program are increasingly important and popular programs that provide vital resources to local farmers, other rural business owners, and rural communities. With the U.S. economic recovery continuing its slow pace, programs that provide grants and loans to increase marketing opportunities for local producers, healthy food access for consumers, farm product development and diversification, and energy efficiency and cost savings are critical to rural community and economic development.
Each of these programs have also received increasing support from Congress – with all three programs receiving mandatory funding in the 2008 Farm Bill and all three programs slated to receive funding in one or both pending versions of the new Farm Bill. With the expiration of the 2008 Farm Bill at the end of September last year and with all three programs shut out of funding in the short-term Farm Bill extension (which expired October 1 this year), the progress and innovations these three programs have helped foster are in jeopardy.
In 2013, FMPP was unable to solicit new grant applications because it lacked any funding. While VAPG and REAP continue to run at diminished levels on funding carried over from previous years, that funding is quickly dwindling, leaving the fate of these programs uncertain. All three programs risk being shuttered, even after the government shutdown is lifted, without a new Farm Bill.
Congress must pass a new Farm Bill that will continue to support these strong and successful programs that promote the health and economic well being of America’s farmers and farming communities.