Funding Termination for Regional Food Business Centers

What is the Future of Small Farm Assistance?

Considering American households spend $1.46 trillion on food every year, speculating on where that money could end up and how policy weakens or strengthens the average American’s ability to make those purchases, to me, will be forever interesting. So, with Agricultural Secretary Brooke Rollins’ announcement that the Regional Food Business Centers program (RFBC) would no longer be supported through government grants, I’m back to considering the relationship between consolidated efficiency and strategic disbursement in our food production. Did the funding cut just tip the scales in favor of Big Food?

The RFBC funding termination came in conjunction with comments from Rollins that, though admirable in its intent, the program was allocating financial resources that it didn’t really have the means to supply long-term and that the design of the program wasn’t well suited to the ultimate goal of promoting resilient food systems. While the decision is part of a broad attempt to stick to a more realistic national budget and remove regulatory barriers and not an outright move to support Big Food, there are a few question marks around how policy will develop to deliver what Rollins and her team have promised as far as prioritizing support for small farm operations.

Should We Continue to Support Small Farms?

Left unsupported, small and mid-sized farms would continue to face hefty challenges in securing capital and developing markets. Competing with large food corporations would become increasingly difficult. And yet, from an economic standpoint, funding small farm production from land acquisition through the sale of products might not seem like a wise allocation of resources. If the entire chain needs financial assistance, will it ever be sustainable?

Regional Food Business Centers were developed with the overarching goal of food system resilience through supply chain diversification. Moving away from dependence on large consolidated food production, the funds were intended to equip small operators with the means to build local markets. If you needed a cold storage truck to move frozen grass-fed beef from your farm to a butcher shop in the nearby city, the grant money could cover it. If you needed access to strategic business planning, grant money could cover the consultant fees. Or, if your operation did not have the capital to purchase the piece of equipment that would enable you to increase production volume, again, the grant money would pay for it. 

Most of these purchases are well under the $100,000 limit per business, and yet they are the kind of expenses that can break a small farm or ranch.  Without the cold storage truck, there is no access to the nearby markets. Without the equipment, there is no feasible way to scale up production into the profitable zone.  Without strategic marketing, you will never build the network.

The program came with the added benefit of regional expertise. Rather than regulating from the top down, RFBC was led by regional experts with a pulse on the area's needs, obstacles, and players. What is feasible in the corn belt might not be realistic in the Southwest.  Regional collaboration can address everything from production, to processing, to transportation, to waste management within their micro-economy for efficiency.  In theory, small farms would be able to compete with Big Food, and operators would earn livable wages if these barriers were addressed. And, of course, that $1.46 trillion of consumer spending would be distributed a bit more evenly across the nation.

Supporting small farms and ranches is also a protective measure. For example, say JBS experiences a cyber attack, and suddenly there is a wrench in the supply chain. Mid-sized farms now operating at full capacity are capable of filling the gap and ensuring consumers still have access to safe food options.

Alone, this termination could be viewed as the end of pandemic-era programs that were designed to be temporary solutions from the start. However, RFBC joins a long list of regional and local food production programs that have experienced termination or funding freezes. Will local food availability and regional community networks fall by the wayside, or will new policy assist mid-level operations in broadening market access?

A Reallocation of Resources

Building food policy is complex to say the least. How government entities leverage resources to shape food systems, as we know, can bolster rural communities, positively influence foreign trade deals, and predictably supply the nation with affordable food options. Or, their decisions can do the opposite. When questioned about decisions to terminate local food distribution funding programs, Rollins maintains that these programs have already served their purpose. 

Locally produced food is being served in school cafeterias. Small farms across the country have developed networks within their own communities and geographic regions, resulting in co-op kitchens, food distribution centers, and business partnerships.  The financial leg up has produced growth in the small farm sector.  And, numerous programs are still in place that afford small farms the same access to market development tools and lower the barrier of entry. The Patrick Leahy Farm to School Program, the Emergency Food Assistance Program, and the WIC Farmers’ Market Nutrition Program are just a few examples of market development opportunities backed by USDA funding that have been made more accessible to mid-level food production.

Under the Farmers First initiative, small farm owners will have help when it comes to navigating USDA application processes to make sure they recoup economic losses as quickly as possible and have timely access to policy changes that pertain to market growth opportunities. Under the umbrella of Farmers First, the goal is to ensure that American producers receive 65% of the funding allocated to farming initiatives and that they have reliable access to capital in the form of loans and risk management tools.

Balancing Big Food

The same deregulation and funding cuts could also remove barriers for big food companies. Fewer barriers would, in theory, lower production costs and, in turn, lower food costs. Without small food production being backed by numerous government grants, corporate food companies could move in to fill the food gaps left by producers who can’t afford to get their products to market without funding assistance.

In fact, the meat industry has lobbied for more deregulation in inspection methods, workplace standards, and environmental protection strategies. Deregulation has been a core component of policy shifts in agriculture for the sake of enhancing competition and food security. Both Big Ag and mid-level food producers stand to have fewer hoops to jump through and obstacles to navigate in the coming year as they work to bring their products to market. Will small farms be able to remain competitive, or will the reallocation of resources and policy shifts support highly efficient and very consolidated food industries that already have effective business strategies?