Local and Regional Foods

Local and Regional Foods: Title IV (Nutrition), Title V (Credit), Title VI (Rural Development), Title X (Horticulture)

Provides support across several titles of the farm bill for increased consumer access to and marketing of locally and regionally produced food, via both farmer direct-to-consumer outlets and intermediated outlets (e.g., farm-to-institution, local retailer, or restaurant sales).

Highlights

  • Expands the scope, funding, and name of the Farmers’ Market and Local Food Promotion Program to include local and regional food business enterprises.
  • Requires USDA to develop crop valuation methods for purposes of lending to local and regional food producers and to implement a mechanism for these producers to establish price history.
  • Creates a new program to provide grants to organizations that encourage fruit and vegetable consumption by SNAP recipients through increasing their purchasing power. Includes a preference for projects involving local food and direct-to-consumer sales venues.
  • Reauthorizes a number of programs that support locally and regionally produced foods.

New Programs and Provisions

Farmers' Market and Local Food Promotion Program (Title X)—The scope and name of the Farmers' Market Promotion Program (FMPP) is changed. The FMPP previously supported promotion only of farmers’ direct-to-consumer efforts, and this provision expands the program to include intermediaries—local and regional food enterprises that process, distribute, aggregate, store, and/or market locally or regionally produced food products. Mandatory funding is 3 times higher than for the FMPP—$30 million per year for 2014-18. Appropriations of $10 million per year for 2014-18 are also authorized.  Half of available funds shall support direct-to-consumer activities and the other half shall support intermediary projects.

Valuation of local or regional crops (Title V)—The 2014 Farm Act requires USDA to develop crop valuation methods for purposes of lending to local and regional food producers and to implement a mechanism for these producers to establish price history. USDA’s authority to provide farm operating loans to local and regional food producers was affirmed.

Food Insecurity Nutrition Incentive (Title IV)—This new grant program will support organizations offering bonus incentives to SNAP participants for purchases of fruits and vegetables—i.e., encouraging their purchase through increased purchasing power—and is based upon successful programs in a few States. Mandatory funding is $35 million for the FY14 -FY15 period, $20 million for each of fiscal years 2016 and 2017, and $25 million for FY18. Appropriations of $5 million per year are authorized for 2014-18. The program is not limited to locally grown produce but does specify a preference for projects that provide locally or regionally marketed fruits and vegetables or operate at direct-to-consumer venues such as farmers’ markets.

SNAP: Authorized Retailers and Benefit Redemption Issues (Title IV)—

  • Retail food stores—Farmers’ markets and other direct-to-consumer marketing outlets are exempted from having to pay all electronic benefit transfer (EBT) equipment and implementation costs, costs that often prohibit these types of retailers from being able to accept SNAP benefits. 
  • Technology modernization for retail food stores—Authorizes a demonstration project to test online and mobile technologies for purchases made with EBT.
  • Community-supported agriculture—SNAP benefits are now permitted by statute to be accepted in advance by agriculture producers operating a Community-Supported Agriculture (CSA) business model. In a CSA, a farmer grows food for subscribers who pledge support to a farm (through the shares they purchase). In return, the members receive shares of the farm's production during the growing season. USDA is planning to issue regulations to fully implement this provision.

Local food production and program evaluation (Title X)—USDA is required to collect data on the production and marketing of locally or regionally distributed agricultural food products; to facilitate collaboration and data sharing on programs related to local and regional food systems among USDA agencies; and to monitor the effectiveness of programs designed to expand or facilitate local food systems. No funding was authorized for this provision.

Pilot project for procurement of unprocessed fruits and vegetables (Title IV)—USDA will carry out a pilot project that gives farm-to-school programs the flexibility to purchase fresh fruits and vegetables from multiple suppliers and to specify a geographic preference in their  procurement (i.e., for food produced within a certain distance of the school). The pilot will be conducted in up to eight States participating in the National School Lunch Program.

Rural Business Development Grants (Title VI)—The Rural Business Enterprise Grant and the Rural Business Opportunity Grant programs were combined to form the broader Rural Business Enterprise Grants Program. Local/regional food projects have utilized these programs in the past and are expected to continue to do so. Appropriations of $65 million for each fiscal year 2014-2018 were authorized, but no mandatory funding was provided.

Healthy Food Financing Initiative (Title IV)—Authorizes USDA to appoint a community development financial institution  to manage appropriated funds with the goal of supporting retail food projects in low-income communities that would expand or preserve food access and accept SNAP benefits. Directs USDA to prioritize projects supporting local and regional food systems, among other preferences. Authorized appropriations of up to $125 million are available until expended.

Community Food Projects (Title IV)—A grant program that supports the development of community-based food projects in low-income communities was reauthorized and amended. Mandatory funding is $5 million is allotted for FY2014, increasing to $9 million in annual mandatory funds in FY2015 and each fiscal year thereafter. 

Specialty Crop Block Grants (Title X)—Multistate projects were authorized for the first time in this program that is important for projects related to local and regionally produced fruits and vegetables. Mandatory funding increased from $55 million in 2013 under the previous farm act to $72.5 million for each of fiscal years 2014-17 and $85 million per year thereafter.

Value-Added Agricultural Product Market Development Grants (Title VI)—The Farm Bill made minor changes to VAPG that will better target the program to small and midsized farms, beginning and socially disadvantaged farmers, and veterans. Local and regional food supply networks will continue to be eligible for funding under a set-aside in the program. Mandatory funding increases from $15 million (under the 2008 Farm Act) to $63 million. Appropriations of $40 million per year for 2014-18 are also authorized (the same level as in the 2008 Farm Act).

Economic Implications

  • The 2014 Farm Act should provide modest benefits to the expanding local and regional food sector, which represented 1.9 percent of gross farm sales ($4.8 billion) in 2008.
  • New programs incentivizing SNAP participants’ purchase of locally and regionally produced fruits and vegetables may boost local and regional food demand.
    • The Food Insecurity Nutrition Incentive program includes $100 million in mandatory funding, which will be leveraged to at least $200 million with private contributions, State or local government funds, or funds raised by organizations receiving these grants (e.g., farmers’ markets, community health organizations, nonprofits, or even retail food stores participating in SNAP).
    • Additional provisions provide incentives for SNAP redemption at farmers’ markets and other direct-to-consumer retail outlets.

  • Support for local and regional food intermediaries in the 2014 Farm Act could further fuel their growth. The Farmers’ Market and Local Food Promotion Program's increase in mandatory funding (three times the annual mandatory funding of its predecessor program) could increase opportunities in the entire local and regional food supply chain now that intermediaries can participate. The program provides grants to nonprofits, local governments, producer associations, and other eligible organizations to help them improve and expand local and regional food marketing opportunities.

A flow chart shows local food marketing shares that go to direct-to-consumer outlets and intermediated marketing channels