NSAC's Blog

2014 Farm Bill Drilldown: Local and Regional Food Systems, Healthy Food Access, and Rural Development

February 11, 2014

With the 2014 Farm Bill recently signed into law, NSAC is doing a blog series that delves into the details of the bill for sustainable food and farming systems. Previous posts in this farm bill series dove into the overall farm bill by the numbers, beginning and socially disadvantaged farmer issues, working lands conservation programs, the linkage between conservation and crop insurance, and easement, land retirement, and energy programs.



The new five-year Farm Bill reflects shifting priorities over the past decade in which issues like local and organic food and healthy food access have become elevated in accord with growing consumer demand for agricultural products produced locally and strong growth in the development of local and regional food systems.

The last two farm bills, in 2002 and 2008, brought about some important changes to support programs that directly and indirectly support local and regional food systems and rural economic development more broadly.

The 2002 bill, for instance, created the Farmers Market Promotion Program and also expanded the Value-Added Producer Grant program to include value-added production methods such as organic and grass-fed while increasing the program’s mandatory funding levels.

In the 2008 bill, mandatory funding was provided for the Farmers Market Promotion Program and the Specialty Crop Block Grant programs, while new rural development programs such as the Rural Microentrepreneur Assistance Program and Local and Regional Food Enterprise Loans were created. Existing programs, like the Value-Added Producer Grant program, were expanded further to include locally produced and marketed food projects and regional food supply chain projects.

At the start of Congress’ work on the most recent Farm Bill, NSAC worked with members of both the House and Senate to highlight issues critical to the continued success of local and regional food systems and rural development. In Fall 2011 and again in early 2013, Senator Sherrod Brown (D-OH) and Representative Chellie Pingree (D-ME) introduced the Local Farms, Food, and Jobs Act (LFFJA), which proposed comprehensive changes to several USDA programs in the farm bill dealing with issues such as crop insurance, farm credit, conservation, healthy food access, rural development, research, local food, and livestock programs.

LFFJA was intended to help shape the farm bill, rather than acting as stand-alone legislation. With the support of nearly 100 legislative co-sponsors and over 280 organizational supporters, LFFJA was recognized as containing provisions vital to supporting local and regional food systems, creating economic opportunities for farmers, and improving healthy food access for all consumers. Many LFFJA provisions ultimately became incorporated into the new farm bill, as detailed below.

Summary of Local Food and Rural Development Farm Bill Provisions

The final farm bill builds on the growing investment in local and regional food systems, organic agriculture, and healthy food access, providing greater opportunities for small and mid-sized farms, specialty crop farmers, and farmers looking to diversify. While the advances for rural economic development programs are not as great, the farm bill still makes minor improvements to certain programs that serve as starting points for further work in future farm bills.

In total, the new farm bill will invest $501 million over the next five years directly into the local food, rural development, organic agriculture, and healthy food access initiatives that NSAC works on and supports, representing a nearly 50 percent increase over the previous farm bill.

Summary of Additions to Mandatory Funding for Select Local Food, Organic, Healthy Food Access and Rural Development Programs

(5-year totals in millions of dollars)

Farm Bill Program 2008 Farm Bill 2014 Farm Bill Farmers Market and Local Food Promotion Program $33 $150 Specialty Crop Block Grant * $224 $100 Value Added Producer Grant Program $15 $63 Rural Microentrepreneur Assistance Program $15 $15 National Organic Cost Share Certification $22 $57.5 Senior Farmers Market Nutrition Program * $28 $0 Food Insecurity Nutrition Incentives (SNAP Incentives) n/a $100 Community Food Projects * no increase $16 increase Total $337 $501.5

* These three programs have permanent funding. The chart therefore shows increases over previous farm bill levels only. The 10-year increase in the new bill for SCBGs is $250 million and the 10-year increase for CFGs is $36 million.

Supporting Direct Farmer-to-Consumer and Intermediated Marketing Channels to Expand Opportunities for Farmers and Ranchers

Among the best news for local food and regional food systems is the expansion of the Farmers Market Promotion Program into the Farmers Market and Local Food Promotion Program in the new farm bill. In addition to supporting direct farmer-to-consumer marketing channels such as farmers markets, community supported agriculture, and others, the new, expanded program will provide grants to farm-to-institution, food hubs, and other local and regional food enterprises that process, distribute, aggregate, or store locally or regionally produced food products.

The bill also triples money for this program from the level provided in the final years of the 2008 Farm Bill, providing $30 million in annual mandatory funding. Fifty percent of funding will go to direct marketing, with the remaining 50 percent going to non-direct marketing regional food enterprises and supply chains. This increased funding and expansion of categories is expected to provide a big boost to the entire spectrum of the local and regional food value chain.

The new bill increases mandatory funding for Specialty Crop Block Grants. The block grant program, administered by state departments of agriculture, serves a wide variety of goals and interests, but can and often does include project or research funding in support of local and regional food systems. The new bill funds the program at $72.5 million in mandatory funding each year over the next 4 years and then, beginning in 2018 and on into the future, at $85 million, up from $55 million at the end of the last farm bill cycle. These levels represent a substantially increased level of funding than what was in the original Senate and House-passed farm bills, a rare occurrence.

Given the flexibility of the Specialty Crop Block Grant program to potentially support farm to school initiatives, farmer food safety training, food hubs, processing businesses, marketing research, and the like, the increased funding for this program represents an improved opportunity for farmers, entrepreneurs, and community-based groups to find support for the development of local and regional food systems, at least with respect to activities specifically focused on fruits and vegetables.

Missed Opportunities for Local and Regional Food Systems

Despite the gains in the current farm bill, several provisions fall short of their potential to bolster existing programs and create robust new programs. Below we highlight four such provisions.

Among the biggest missed opportunities are the strong Farm to School provisions that were in the House-passed farm bill and LFFJA but excluded in the final farm bill. The House provisions would have instituted two sets of pilot programs giving more control to the States and to local schools and school districts by authorizing the use of dollars from two USDA food distribution programs for the purchases of foods from agricultural producers in their own communities. Additionally, schools with low annual commodity entitlement values (very small, mostly rural schools) would have been authorized to start making their own local food purchases, in whole or in part, provided this would yield reduced overall administrative costs.

Instead, the final farm bill contains a pilot project, built off of a Senate-passed provision, that will allow eight states to do pilot projects solely for unprocessed fruits and vegetables, not all foods. The pilot project language does not explicitly allow school districts to substitute their own local purchases for USDA commodities, so that will become an issue for farm bill implementation. Importantly, the final language allows states to use geographic preference for local food if they so desire. This geographic preference language, however, does not provide clarification of geographic preference rules more broadly beyond these eight pilot projects.

The final bill provides for the creation of a new local food production data collection and program evaluation initiative to collect important data and to understand the impacts and effectiveness of programs designed to facilitate local food systems. While the initiative, which also stems from LFFJA, represents an important first step for USDA to begin much needed data collection and program evaluation, the bill does not provide the initiative with any funding. Hopefully the upcoming annual appropriations bill will provide the needed start-up funding.

Increasing Food Security and Access to Healthy and Locally Produced Food

The new farm bill also makes strides in providing low-income Americans with better access to healthy and locally produced foods. The bill creates a new Food Insecurity Nutrition Incentive grant program to fund programs that encourage increased fruit and vegetable consumption by SNAP (food stamp) recipients at the point of purchase through increased purchasing power.

Building off of successful incentive programs in states like Michigan, California, and New York, the new program has mandatory funding at levels ranging between $20 million to $35 million per year for a total of $135 million over the course of this five-year farm bill. The bill also prioritizes projects that involve direct-to-consumer sales marketing, locally or regionally produced fruits or vegetables, and are located in underserved communities.

The popular Community Food Projects grant program, which supports the development of community-based food projects in low-income communities to improve the self-sufficiency of community members, saw a sizable increase in funding. The bill grants the program with $9 million in mandatory funding per year starting in fiscal year 2015, nearly double its $5 million funding level from the 2008 Farm Bill. Additionally, the bill extends the period of the grant from 3 years to 5 years.

Along with these positive developments for healthy food access programs, the farm bill also provides a suite of provisions dealing with EBT (electronic benefits transfer) equipment that expands the ability of SNAP benefits to be used in more direct-to-consumer marketing outlets.

One provision would allow SNAP recipients to use their benefits to participate in Community Supported Agriculture (CSAs) ventures while another would allow an exemption for farmers markets and other direct-to-consumer marketing outlets from having to pay all of its EBT equipment and implementation costs, costs which often prohibit these types of retailers from being able to accept SNAP benefits. A third provision authorizes pilot projects to test online and mobile technologies for purchases made with EBT.

The bill also maintains the status quo for the Senior Farmers Market Nutrition Program, which actually turns out to be welcome news in light of the threat to having it merged with another program and its funding cut by half in the House bill. By retaining this program, low-income senior citizens in the U.S., its territories, and tribal communities, have increased purchasing power at farmers markets and community supported agriculture programs. The proposed increase in funding for the program contained in LFFJA was not included in the final bill.

The bill also authorizes USDA to house a Healthy Food Financing Initiative (HFFI) to provide healthy food retailers with grants and loans to “overcome the higher costs and initial barriers to entry in underserved areas.” Among the priority categories listed for funding a project is that it “supports regional food systems and locally grown foods, to the maximum extent practicable.” Although the program does not currently have funding, HFFI is authorized to receive up to $125 million in appropriated funds; whether it receives funding or not will be a function of future annual agriculture appropriations bills.

Investing in the Future of Organic Agriculture

Overall, organic agriculture fared well in the current farm bill, with funding increases and funding renewals for several programs. The National Organic Certification Cost-Share Program, which helps defray the costs of annual certification for organic farmers and livestock producers, receives increased mandatory funding per year, more than doubling funding to $11.5 million annually, up from just over $5 million annually in the 2008 Farm Bill.

The National Organic Program, which develops, implements, and administers national labeling standards for organic agricultural products, receives a one-time $5 million for technology upgrades.

The bill renews funding for the Organic Agriculture Research and Extension Initiative at the previous $20 million per year level and renews one-time $5 million in funding Organic Production and Market Data Initiatives. These programs are covered in more detail in our drill down on the research title of the farm bill.

Unfulfilled Promise of Rural Development Programs

Unlike local and regional food, organic, and healthy food access programs, rural economic and community development programs had less to celebrate in the new farm bill. The brightest light was the increased mandatory funding and program improvements to the Value-Added Producer Grant program. But overall, rural economic development received just two one hundredths of one percent of total farm bill funding. Additionally, there were few policy changes one could point to as demonstrations of progress in strengthening rural development programs to promote job creation or to help promote the development of local and regional food production.

For the Value-Added Producer Grant program, the bill provides mandatory funding in a lump sum of $63 million over five years to assist farmers with the development of high quality farm-based products differentiated by production processes, physical segregation, or marketing. The bill also adds veteran farmers and ranchers to the priority eligibility category for the and makes very important changes to the determination of which projects from groups of producers receive priority consideration. Priority will be given to those projects that “best contribute” to creating or increasing marketing opportunities for small and mid-sized family farms and beginning, socially disadvantaged, and veteran farmers or ranchers.

The final funding level falls short of the LFFJA recommended level by $38 million and additional policy improvements to VAPG included in the LFFJA were not included in the final bill.

The bill provides the same $3 million in mandatory funding per year as the previous 2008 farm bill to Rural Microentrepreneur Assistance Program (RMAP). RMAP provides training, technical assistance, and microloans to very small rural businesses through grants to intermediary organizations. This level of funding falls far short of the $10 million per year that NSAC requested which would enable the program to grow beyond current levels to better meet the needs of small rural business owners. Additionally, the bill failed to provide any of the important no-cost improvements to the RMAP program that advocates, including NSAC, had asked for, including ones that would simply clarify statutory problems which have lingered since the last farm bill and now unfortunately will linger for another five years.

The Business and Industry (B&I) Guaranteed Loan Program provides federal guarantees of commercial loans for a very wide variety of new and expanding rural businesses. The 2008 Farm Bill established a Local and Regional Food Enterprise Loan account within the B&I program and mandated that at least 5 percent of available funding support such businesses.

On a positive note, the final farm bill retains the 5 percent floor, rejecting a House farm bill provision to substitute a cap. However, the final bill did not include various no-cost policy changes that would have facilitated the use of the local food enterprise loans. The no-cost changes would have, among others, provided for simultaneous approval of the loan and loan guarantee, encouraged the development of intermediated marketing channels for local and regional food as part of regional economic development strategies, allowed for non-rural siting of distribution facilities that expand rural and farm income, and created an outreach and transparency plan to help make more applicants and the public aware of the program.

Under the new bill, the Rural Business Opportunity Grant and Rural Business Enterprise Grant programs have been merged into one program, to be known as Rural Business Development Grants, with authorization for up to $65 million in discretionary funding per year over five years, but no mandatory funding. The bill limits the use of funds for certain activities previously funded by RBOG, allowing up to 10 percent of total appropriated dollars to be used for planning projects, technical assistance and training to existing or prospective entrepreneurs and managers, localized economic development planning, and certain business training centers.

In another positive, the new bill allows USDA to use up to 10 percent of a wide number of rural development programs to support strategic regional community and economic development plans, including especially plans developed by and with the support of multiple stakeholders in the service area of the plan.

Conclusions

In his remarks at the signing of the new farm bill last week, President Obama recognized the support the bill provides for local food. Overall, programs dealing with the development of local and regional food systems and organic agriculture fared decently – seeing some increases in funding and changes that helps direct-to-consumer sales, organic production, regional supply chains, and the marketing of locally grown foods.

While the President’s remarks also noted that the bill “lifts up rural communities,” there is little sign of major investments or policy changes in the USDA’s Rural Development programs outside of the energy and agriculture sectors. Despite continuing signs of declining population, stagnating job growth, and increasing poverty levels in rural areas, and despite the farm bill being the major bill in which Congress considers rural development, the farm bill still does not take on the task at hand with anywhere near the seriousness it deserves.

Despite missed opportunities, however, the new farm bill contains continued and enhanced support for programs that aid local and regional farm and food-related businesses, organic agriculture, healthy food access, and, to a limited extent, rural business development.

Categories: Farm Bill, Local & Regional Food Systems, Organic, Rural Development