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Lisa MensahUnder Secretary, Rural DevelopmentUSDA
FY 14-15: Agency Priority Goal
Create new economic opportunities through farming and the creation of new markets for agricultural products.
Priority Goal
Goal Overview
Although export opportunities and agricultural revenue are at historic highs, rural America continues to lose population. A continued population drain from rural areas jeopardizes the economic stability of rural America and the many national assets that rural communities have historically stewarded. In order to reverse the trend, USDA is investing in creating opportunities with potential to catalyze long-term economic growth and prosperity in rural America. Areas of opportunity include supporting new and beginning farmers and ranchers, the bioeconomy, and local and regional food systems.
To achieve the goal, USDA will make strategic investments in the following areas:
- New and Beginning Farmers and Ranchers: The Microloan program operated by the Farm Service Agency (FSA) is designed to help small and family operations, beginning, minority, and women farmers and ranchers to secure loans under $50,000 (Effective December 2014). It is aimed at bolstering the progress of producers through their start-up years by providing needed resources and helping to increase equity so that farmers may eventually graduate to commercial credit and expand their operations. The Microloan program provides a less burdensome, simpler application process in comparison to traditional farm operating loans. In addition, for those who want to grow niche crops to sell directly to ethnic markets and local farmers markets, the Microloan program offers a path to obtain financing.
- Biobased Companies: USDA provides funding for biobased products, from the production of the renewable biomass feedstock through the sale of the resulting biobased product, including research and development for production, capital for startup businesses, and marketing and outreach. USDA invests in the discovery and refinement of the best feedstocks and production systems for biomass through its research and development programs and partnerships. Further, USDA provides financial and technical assistance to rural individuals, businesses, and communities to aid in sustainably producing and distributing renewable biomass resources. USDA also leads the Federal effort to designate biobased products for preferred Federal procurement. It is through these investments and partnerships that USDA will make strategic investment to support the creation of new biobased companies and associated economic opportunities in the coming years.
- Local and Regional Food Systems: USDA supports the development of physical infrastructure, often in partnership with private lenders, and provides technical assistance in marketing, risk management, food safety practices and other areas. The Department also works to reach stakeholders who are unaware of available federal resources and works internally to ensure that USDA programs and policies meet the unique needs of local and regional supply chains. The long-term result will be job growth driven by a maturing market and accessible infrastructure to aggregate, process, and distribute local and regionally-produced foods.
Strategies
- Improve the effectiveness of outreach to new and beginning farmers; local and regional food producers; minority producers; women; and veterans. This strategy will include better coordination with other Federal, State and local agencies; tribal governments; community based organizations (CBOs); and non-governmental organizations. Specific initiatives include: establishment of recurring monthly outreach stakeholder meetings with local CBOs that represent targeted audiences; development of a Native American Outreach Plan; and creation of a Veteran’s Action Plan for state offices to adopt and use in their efforts to reach out to veterans.
- Enhance existing partnerships with land-grant universities and other educational organizations to identify and assist new and beginning farmers; local and regional food producers; minority producers; women producers; and veterans. For example, USDA will build stronger relationships with Cooperative Extension through engagement in the eXtension Community of Practice on local and regional food systems; In addition, FSA is hosting training sessions at the state level with 12201 (formerly 2501) Partner Organizations, meeting with USDA 1890 Program Liaisons and Ag Extension Agents to discuss new Agency programs (Farm Bill); and conducting limited English proficiency community assessments with Hmong National Development Outreach Specialists.
- Enhance efforts across USDA and with federal partners to remove program barriers to participation. For example, USDA will work to address challenges that diversified fruit and vegetable producers face when completing required paperwork for loan applications;
- Continue efforts to improve program delivery and transparency through automation enhancements, and process streamlining and open data activities. For example, USDA will continue to maintain and update federal data on the Know Your Farmer, Know Your Food Compass map, the primary tool to help producers, supply-chain businesses, and other partners understand and leverage federal investments related to regional food systems.
External Factors
- Many external factors influence accomplishment of this goal, including natural and economic forces; widespread or prolonged natural disasters; climate change, animal and plant pest and disease outbreaks. Additionally, as the U.S. agricultural sector continues to change, with farms becoming larger and increasingly dependent on technology, entry into farming is more capital intensive than ever before. If a producer succeeds in entering into farming, they may also struggle to access the infrastructure necessary for storage, processing, distribution and sale of their products. Yet at the same time, consumer demand is diversifying, creating new market opportunities for those able to innovate to develop new business models and strategies. These factors result in barriers and both challenges and opportunities for new and beginning farmers, local and regional food producers, minority producers, women and veterans. The federal programs that serve them must adapt in order to meet the sector’s evolving needs.
Progress Update
Microloans
Building on the successes achieved in FY 2013 and FY 2014, the microloan program continues to reach agricultural producers across the country as all states obligated at least one microloan in FY 2015. A total of 6,596 microloans, valued at more than $161 million, were obligated in FY 2015. More than 71 percent of the microloans were issued to beginning farmers and about 56 percent of loans went to new customers. A total of 1,175 microloans, valued at nearly $27.3 million, were obligated to women and 505 microloans were obligated to veterans in FY 2015. Program outreach continues through the use of links to the FSA website, State outreach plans, and materials such as microloan fact sheets and posters. A microloan poster was recently completed that features veterans and farming. The poster is being distributed widely to states for their use in outreach in heavily visited veteran outlets (e.g., VFWs, American Legions, and town halls). News releases targeting human interest stories have been published. One featured a veteran who used a microloan to begin a beef operation. Another story highlighted former youth loan borrowers who have “graduated” on to microloans. A news release was published for both the 10,000 microloan and the 14,000 microloan. In general, demand for microloans continues to exceed projectionsFSA added a handbook amendment with guidance from the Farm Bill that provided advice to loan officers on evaluating regional, local, and organic crops. General audience marketing materials have been made available to FSA employees in order to facilitate requests for webinars and local training. The 2014 Farm Bill increased the microloan limit to $50,000. The increased loan level became effective December 8th, 2014.
New Markets for Local and Regional Food
Building on our activities in FY13, USDA continues to prioritize new market opportunities in local and regional food systems through the development of infrastructure such as food hubs, scale-appropriate processing facilities, cold storage and regional distribution networks. In the first quarter of FY14, many of our programs issued NOFAs, so we anticipate results to be very heavily weighted toward the latter half of the fiscal year; Q1 saw 7 new markets developed with USDA assistance, 3 percent of our annual goal. This quarter focused on training and outreach to field offices working directly with applicants and to potential applicants interested in local food infrastructure. A webinar targeting food hubs was held by Rural Development to help potential applicants understand opportunities in our Value-Added Producer Grant program; over 200 food hubs participated. Calls were held with RD state offices staff focusing on outreach opportunities through the Community Facilities and Business and Industry Loan Guarantee programs. Work continues with FSA and AMS on opportunities in their programs to support infrastructure and technical assistance to facilitate new market connections.
Investment in Local and Regional Food Systems
As part of the President’s focus on open data and to facilitate connections between potential applicants and relevant federal programs, USDA tracks and makes available a database and map of federal investments in local and regional food systems. We began FY14 with a baseline of 1,980 investments tracked and made publicly available, representing investments for the years 2009-11. During Q1 of FY14, we reported an additional 398 investments, completing the dataset for FY12.
Farmers Markets and Food Hubs
At the close of FY 2015, 8,500 farmers markets were entered in the USDA National Farmers Market Directory and 303 food hubs were included in a national directory of food hubs curated by the Wallace Center at Winrock International, which partners with USDA to coordinate a national network of food hubs. Food hubs aggregate products from small and midsize farms and distribute them to large-volume buyers, such as grocery stores, in the local region. USDA investments help plan, design and build hubs, while USDA research informs best practices and helps lenders understand how to work with these unique businesses. On average, each food hub supports 20 jobs and generates nearly $4 million in annual sales.
Consumer Demand
This external indicator of consumer demand provides us with information on the robustness of the market for locally-produced products. As such, we do not have a target for this measure, which we update annually or semi-annually. The National Grocers Association 2013 and 2014 Consumer Panel Surveys reported that supermarkets that support local food sources appeal to the vast majority of consumers; both years, over 85% of consumers surveyed called this “very important” in their choice of a primary supermarket destination. The National Restaurant Association’s 2013, 2014 and 2015 Chef Survey named locally-sourced meats and seafood and locally-sourced produce as the #1 and #2 “hottest trends” in the restaurant industry. The grocery industry analysis firm A.T Kearney estimated in 2014 that local food sales were worth $11.7 billion, and predicted that the market for local foods could grow to $20.2 billion by 2019. In 2015, A.T. Kearney predicted 9 percent annual growth in the local foods market at least through 2018.
Next Steps
No Data Available
Expand All
Performance Indicators
New markets for local and regional food
New bio-based companies
Microloans
Farmers Markets and Food Hubs
Consumer Demand
Other Indicators
Investments in local and regional food systems
Contributing Programs & Other Factors
USDA Departmental Management
BioPreferred Program (Labeling and Federal Procurement Preference)
Rural Development
Business and Industry Guaranteed Loan Program
Community Facilities
Rural Business Development Grants Program (the 2014 Farm Bill consolidated the Rural Business Enterprse Grants Program and Rural Business Opportunity Grants Program into this new single program)
Rural Cooperative Development Grants Program
Small and Socially-Disadvantaged Producer Grants Program
Value-Added Producer Grants Program
National Institute of Food and Agriculture
Agriculture and Food Research Initiative
Community Food Projects
Sustainable Agriculture Research and Education Program
Small Business Innovation Research Program
Agricultural Marketing Service
Federal-State Marketing Improvement Program
Specialty Crop Block Grants
Farm Service Agency
Microloan Program
Food and Nutrition Service
Hunger-Free Communities Grants
Farm to School Grants
Team Nutrition Training Grants
Risk Management Agency
Risk Management Outreach and Education Program
No Data Available
