Other Ag News: Path to a New Farm Bill: Local and Regional Market Access

The farm bill has a longstanding history of supporting market development for local producers and food businesses through grant programs such as the Value-Added Producer, Farmers Market and Local Food Promotion, and more recently, the Regional Food System Partnership programs. Over time, Congress has authorized programs to respond to the unique needs of markets and regional supply chains. A recent report from US Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) demonstrates how Local Agriculture Market Programs address these needs and spur economic growth through job creation and an increase in customers and revenue. Recent Agricultural Census data further shows the continued growth of the sector. In 2022, 60,332 farms sold their products to retail markets, institutions, and food hubs marketed as local and regional products, with sales valuing $14.2 billion. This is an increase by 57% from 2017.

Demand for local and regional food grant programs has increased in recent years. Since 2018, AMS has awarded more than 3,000 grants across the Local Agriculture Market Programs (LAMP). Part of this increase can be attributed to the increased reliance on our local and regional food systems in light of fractured national supply chains during the COVID-19 pandemic. While food hubs often serve an essential role in these local food systems, they have had a difficult time securing relevant LAMP funding. Only 8% of relevant awards have included food hubs. Additionally, NSAC members have shared how difficult it is to navigate program applications, particularly for documenting matching requirements. Generally applications require over 100 hours to complete. 

Congressional leaders have heard this need clearly from their communities with the Senate and the House each taking a different approach to alleviating participation barriers. 

The Senate’s proposal would improve access programs by: 

• removing match requirements for Value-Added Producer Grants, the Farmers Market Promotion Program, and the Local Food Promotion Program, 
• directing USDA to collect feedback from stakeholders on how to simplify the application process, 
• and increasing authorization levels to $30 million annually. 

The House responds to these issues by incorporating provisions from the Local Farms and Food Act (H.R. 2723) that seek to increase programmatic access by creating a simplified application for Farmers Market and Local Food Promotion Program grants that would support underfunded activities, such as equipment and staff time. 

In addition to the provisions noted above, each proposal responds to local market changes by enabling food hubs as an eligible grant entity. They both clearly recognize the highly effective and popular nature of the program, and seek to correct the overly burdensome application process for producers and organizations but in slightly different ways. 

While the House targets short-term issues, the Senate proposal goes further to address programmatic growth by removing the match requirements and enabling additional funding. NSAC members and other local food stakeholders have consistently identified the match requirement as a significant barrier to access program funding. The reality is, even without a requirement, organizations and farmers are contributing their own resources to their business or community initiatives. Incorporating proof of this contribution into the application process is more often preventing highly qualified applicants from applying than it is ensuring private or public contribution to a project. While an increase in funding authorization is truly welcomed, recent precedent for the appropriations cycle leaves stakeholders nationwide concerned about the long term growth of the program. Without sufficient and guaranteed funding, the proposals risk creating more unmet demand for the program. For this reason, NSAC continues to advocate for an increase from $50 million to $75 million in mandatory annual funding in addition to the increase to $30 million in discretionary in the final bill. 

To support growers in complying with regulatory and market-based standards that have expanded under the Food Safety Modernization Act, the 2018 farm bill included changes to the Value-Added Producer Grants and the Farmers Market and Local Food Promotion Program to cover costs associated with food safety certifications and upgrades to equipment for maintaining food safe standards. 

Yet these changes have yet to be fully implemented under either program. Applicants can still receive financial support for food safety-related activities, but only if they are sandwiched within broader project requirements. Neither producers nor food enterprises can access these grant funds for exclusively food safety reasons. 

Congressional leaders reiterated the importance of these provisions in the Local Farms and Food Act (S. 1205 | H.R. 2723), but the food safety elements of the bill have not been included in either H.R. 8467 or the Senate’s proposed Rural Prosperity and Food Security Act of 2024.

A final farm bill must direct USDA to finish implementing these changes, and ensure the expanded funding for equipment supports food safety standards and compliance. The need for this opportunity will only continue to grow as both the Food Safety and Inspection Service and the Food and Drug Administration continue to promulgate new rules that can pose disproportionate economic burdens upon small and very small producers and processors. 

Beyond investments in organizations and producers, Congress has sought to strengthen the local and regional marketplace by empowering states and localities to develop their own food supply chains through targeted food purchases. Supporting domestic supply chains is not a new concept for the USDA. USDA spends billions on food purchases annually to distribute two billion pounds of food into schools, food pantries, and community nutrition programs serving children and adults. USDA’s Commodity Procurement Department purchases food on a competitive solicitation process. Due to the scale of these purchases, solicitations are often written to cover a large geographic footprint and USDA follows a precedent of selecting bids at lowest cost. As a result, it is extremely difficult for small-scale farmers or localized food hubs to participate in this system. Rather, these contracts often benefit fewer, larger scale food distributors or producers. For example, in 2022, 50% of the total value of contracts were awarded to only 25 businesses. That represents roughly $2.3 billion in spending. 

USDA launched an alternative in 2022 known as the Local Food Purchase Assistance Program (LFPA) where they enter into cooperative agreements with States and Tribal nations for local authorities to purchase food and distribute it in insecure communities on USDA’s behalf. The benefits of LFPA exceed traditional food and nutrition programs. In addition to providing nutritious foods to communities with limited access, it has an explicit directive to support local and regional food supply chain resiliency by purchasing from local, underserved, and historically disadvantaged agricultural producers. As a result, the program has already made purchases from 6,000 unique producers, of which more than 63% have been disadvantaged producers. 

The Senate has recognized the novel program’s potential for reforming federal procurement. The Senate seeks to create a permanent Local Food Purchase Assistance program that: 

• Enters into noncompetitive cooperative agreements with States, Tribal nations, and territories to purchase and distribute local food to insecure communities, 
• Requires foods be purchased from local and underserved producers within their state or region, 
• Ensures access for Tribal nations with a 15% funding set-aside, and
• Offers $200 million in mandatory funding for the program’s duration and authorizes an additional $40 million annually. 

NSAC members and community stakeholders are hopeful that this transformative local food purchasing program has a permanent home in the farm bill. However, some are concerned about the funding levels proposed, which represent a fraction of the original program funding. The current proposal could result in some states receiving such a small annual amount of funding – like $52,000 in Vermont –  that states may pass on the funding opportunity. The House, on the other hand, largely remains focused on filling gaps in existing food and nutrition programs, like the Emergency Food Assistance Program (TEFAP). Their approach would authorize a Food Box Pilot Program that is structured as a competitive, federal program. While the program has the potential to serve communities left out of the TEFAP system, its inherent structure would likely benefit businesses and distributors that primarily purchase from large-scale farming operations, much like previous USDA food box initiatives. NSAC will take a deeper look at this initiative in a future post.

Congress has the opportunity to continue its legacy of creating and investing in programs that promote local and regional food systems for rural and urban communities, alike. It is imperative that the farm bill provide the right resources for these initiatives to be successful. That means a final farm bill must: 

• address barriers for participation and make them accessible for all sizes of operations and experience levels, 
• ensure these programs fund essential elements of local food supply chains, from equipment, to food safety training, and value-chain coordination activities,
• resource programs with sufficient, reliable funding that adequately responds to demand, 
• equip States and Tribal nations to lead food procurement programs that catalyze local markets and ensure access to nutritious, locally-produced, culturally-relevant food, and
• provide USDA the authority to remain nimble and responsive to market trends and supply chain disruptions. 

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