Putting farm bill resources to work in rural America

The United States Department of Agriculture is rural America's most significant federal partner. The Farm Bill, which guides policy and investments for USDA, is currently being debated in Congress. The call for structural reform is widespread and the important question of how best to direct USDA resources to rural America is scarcely being asked.

USDA resources are terribly misaligned to the needs of low wealth rural counties. Southern Rural Development Initiative analyzed US Census Bureau Consolidated Federal Funds data from 2001-2003 and found that there are significant misalignments in how USDA allocates resources to the nation's 364 rural counties that had over 20 percent poverty rates - the standard definition of a high poverty county. In these poor counties over $7 billion of USDA agriculture subsidy direct payments were made, while USDA Rural Development grants for the period totaled only $459 million, a ratio of $15.65 to $1. For non-metro counties with majority minority populations, the ratio is $20.64 to $1. Most of these are African American majority counties in the South. SRDI estimates that 94-95 percent of the agriculture commodity subsidies in these majority minority counties went to farms with white operators. This is the new plantation economy in wide swaths of the rural south.

The misalignment of USDA funding comes at a high cost - both to rural communities that struggle for a brighter future, and the federal government's fiscal bottom line. In addition to the $7 billion spent just on the two major agriculture direct payment subsidy programs in counties with over 20 percent poverty rates, there was also over $5 billion in nutrition grants and direct payments - a per capita rate of $730 compared to a national per capita rate of $305. Most of this benefits children, and is an indicator of profound social and economic need in these counties.

It is a deep irony that in the rural South, hunger and high nutrition program spending exists side by side in the very same counties that are receiving billions of dollars of agricultural subsidies that do little to grow and diversify local economies and reduce poverty - the true source of hunger. In the three-year period of funding we studied, for every USDA nutrition program dollar we could trace to rural low wealth counties, $1.47 was spent on the two largest agricultural direct payment subsidy programs. In contrast, these counties received 9 cents in USDA rural development grants for every nutrition dollar.

As bad as this is, it can actually be worse. In 11 counties of the Arkansas Delta, for every nutrition dollar allocated, large rice farm operations received $4.07 in direct payment commodity subsidies, yet, only 3 cents in USDA rural development grants. Recent Census Bureau data indicates that all of these counties have lost non-farm employment in the first half of this decade. All but one county has lost population in this decade.

If the total agriculture subsidy direct payments and the rural development grants were lumped together into a block grant program, what are the chances that rural county commissions might adjust the equation a bit to put more in grants to rural development projects that build public facilities, small businesses, and water systems? But this question is hypothetical, of course, because agricultural subsidy dollars flow directly to individual farm operations and bypass local governments. Rice, cotton and sugar commodity crop trade associations want to make sure it stays that way.

USDA funding alone is not going to solve the needs of rural America. And agriculture programs must continue to be a dominant element of USDA's mission - especially if it links farms more strongly to communities and regional economies. But surely USDA must be a stronger, more strategic policy partner than it is today if more rural counties are going to have a fighting chance of thriving in the 21st century.

We must make USDA policy responsive to the real needs of distressed rural communities to build competitive 21st century communities and economies by adequately funding rural development. Federal policy that takes the rural south back to the plantation economy is not the way to move forward.

Jason Gray is the research and policy director for the Southern Rural Development Initiative.


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