By Aaron Shier, NFU Government Relations Representative
Though traditional commodity markets remain a large source of revenue, the market for locally or regionally produced food, value-added products, and organic agriculture are becoming increasingly important for farmers.
Why are diverse market opportunities so important? Local and regional marketplaces, with their shorter supply chains, can help farmers capture a larger share of the retail food dollar and provide consumers with access to fresh, healthy produce. Certified organic products typically command a higher market price and domestic demand is outpacing supply. And value-added activities are important for rural economic development and can increase producer incomes.
National Farmers Union was pleased that Congress recognized the importance of diverse markets in the 2018 Farm Bill by reauthorizing and providing funding to programs that support their development and growth. The following are some key changes and additions to programs that support diverse markets that became law when the bill was signed on December 20, 2018.
Local Food and Value-Added Activities
The 2018 Farm Bill created the Local Agriculture Market Program (LAMP) and provides the program with $50 million annually in permanent, mandatory funding. LAMP puts popular programs – including the Farmers Market and Local Food Promotion Program (FMLFPP) and Value-Added Producer Grants (VAPG) – under one umbrella. FMLFPP funds both direct-to-consumer marketing strategies (such as farmers markets), as well as the work of intermediaries that help connect producers and consumers (such as food hubs). VAPG, on the other hand, supports farmers or groups of farmers in the development of value-added producer-owned businesses.
LAMP maintains these programs while adding a few new key provisions. The program offers grants to support public-private partnerships to plan and develop local and regional food systems. Additionally, it provides funding for producers or organizations to undertake certain food safety activities.
The success of organic agriculture depends in large part on the integrity of the National Organic Program (NOP). To protect and strengthen the program, the farm bill focuses on enforcing organic import regulations that deter fraud.
The growth of the organic sector also hinges on quality data collection and research that addresses the challenges organic farmers face. The Organic Agriculture Research and Extension Initiative (OREI) receives funding that grow incrementally over the life of the bill, achieving permanent funding at $50 million per year in 2023. Furthermore, the Organic Production and Market Data Initiative received $5 million in mandatory funding to improve data collection on organic production, handling, and distribution, among other things.
Farmers seeking organic certification typically have to pay an application fee, an annual renewal fee, assessment on annual production or sales, and inspection fees. These costs can be prohibitive, especially for beginning farmers and smaller operations. The farm bill provides $40.5 million in mandatory funding for the National Organic Certification Cost Share Program (NOCCSP), which helps defray the cost associated with certification.
The farm bill also maintained funding for the Specialty Crop Block Grants (SCBG) program at $85 million annually. SCBG provides assistance for fruit, vegetable, tree nut, and other specialty crop producers through grants to state departments of agriculture. Applicants can use the grants for a wide variety of purposes, including research, agricultural extension activities and programs to increase demand for agricultural goods of value to farmers in their state or territory.
The 2018 Farm Bill maintains and improves programs that support existing diverse markets and are designed to help communities develop new market opportunities. Now that the farm bill has been signed into law, much comes down to implementation of programs. As we work with the U.S. Department of Agriculture on this phase of the farm bill process, NFU will be providing updates on program application deadlines and other key programmatic information.
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