Broader Competition For USDA's 'Rural' Dollars
As lawmakers debate the Farm Bill in Washington, millions of dollars are at stake for small businesses across the country. Rural development grants go out to everything from home loans to water projects to small co-ops.
With budget cuts likely, the U.S. Department of Agriculture is adjusting how these funds are used, and proposing changes to the word “rural.” But there’s concern that a tighter belt at the federal level means farmers and ranchers in small towns will be left behind.
In the small town of San Luis, Colo., the state’s oldest established community, the effects of a changing philosophy within the USDA are already apparent. The town of fewer than 1,000 residents just north of the New Mexico border is the economic center for ranchers and farmers in the Culebra Creek drainage, a water source that supplies this valley with much-needed irrigation water.
Six years ago, a group of farmers and ranchers Rio Culebra Agricultural Cooperative applied for a rural development grant from the USDA. That year and every year since, they were awarded a Small Socially Disadvantaged Producer Grant, meant to provide minority owned cooperatives with help on technical issues.
In total, the co-op has used roughly $800,000 from the USDA’s Rural Development Program to market products like grass-fed beef and heirloom white corn. The co-op also built a website to handle new customers and help ranchers sell directly to the consumer.
“With the grants we’ve received, we’ve been able to develop labels, and packaging and processing of product and purchasing product from people,” said Bernadette Lucero, Rio Culebra’s director.
But in the latest round of USDA grants, the money Rio Culebra relied on went to other groups, including the Rocky Mountain Farmers Union, a larger group that focuses on regional projects across several states in the West.
In the past, the two groups weren’t in competition for the same dollars. But the USDA opened up the grant process last year to more regional applicants, making it a lot more competitive.
“I can see where some of the small co-ops could’ve been outcompeted,” said Dan Hobbs, a cooperative specialist with the Rocky Mountain Farmers Union. “I’m sure there are some sore feelings out there about that. But I believe it was probably a responsible move on the USDA’s part to widen that pool,”
Widening the pool could soon be a regular exercise at the USDA, and not just for these small producer grants, but across the board within rural development.
A report released in February [.pdf] detailed a USDA proposal to change the definition of the word “rural.” Communities of up to 50,000 people could still be considered a rural area and apply for money. Critics have said if the population threshold is raised farmers in very small, remote communities, like San Luis, will get less.
"I think actually it will encourage small communities not only to understand what the rules are but also to perhaps collaborate with their neighbors to focus on regional efforts which we're trying to encourage."
But U.S. Secretary of Agriculture Tom Vilsack said that’s not the case.
“I think actually it will encourage small communities not only to understand what the rules are but also to perhaps collaborate with their neighbors to focus on regional efforts which we’re trying to encourage, so that we actually move the dial more effectively and more efficiently,” Vilsack said.
Lucero, with the Rio Culebra Cooperative, scoffed at the idea that they’re not getting less. She said it’s clear that a shift is happening within rural development, to move away from small producers and toward more regional enterprises.
Lucero said the co-op plays a major role in San Luis. The area is poor and remote. If farmers share their resources and skills eventually Rio Culebra could become self-sustaining, she said.
“[Farmers] don’t have time to go to farmer’s markets,” Lucero said. “They don’t have time to be able and call and say, ‘Hey, would you like my grass-fed beef.’ So we’re providing a service that is so necessary for this community.”
But that mission is in jeopardy without the USDA funds. Rio Culebra projects will likely be more modest in scope, according to Eugene Jacquez, a farmer who has been selling his family’s beige-colored bolita beans through the co-op.
“There’s not going to be a market now,” said Jacquez, noting that many of his neighbors will be reluctant to grow and sell to the co-op now.
Still, while the rural development dollars allowed the co-op to grow quickly in just a few short years, the money’s absence won’t shut down the group’s operations. Administrators say they’ll stay on as volunteers, and look for additional grant monies from private donors.