Do We Need Small Farms?

Rollins, Funding Freezes and the Future of Small Farms

Funding freezes for USDA grants have put local farm to market models in a lurch. Immediate implications revolve around productivity for farms and the organizations and businesses they serve typically comprising school cafeterias, food banks and restaurants. But, the potential for long term lapses in financial backing for these up and coming supply chains has small farm owners worried it will become increasingly difficult to remain competitive in the ag sector. 

Secretary Rollins said in early March that all contacts will be reviewed according to efficiency and effectiveness given their goals in relation to USDA initiatives; the scope of which is in transition. Without adequate funding from the federal government, will the regionally dispersed small farms many communities have come to rely upon be able to survive?

Do Small Farms Contribute to Food Security?

From a food security perspective yanking funding seems problematic. The U.S. appears to recognize the resilience of a national food system that incorporates both the efficiency of big agricultural companies and regionally strong food supply from small farms. In fact, consumer trends increasingly favor farmers markets, options to purchase protein and vegetables directly from farms, and feeling connected to their food sources. 

Federal funding has played an important role in financing expensive technological investments and farm additions which support regenerative and climate smart agricultural practices with some focus on small farms. As a byproduct hundreds of small agricultural operations in over forty states have experienced some measure of growth, once again giving legs to family farms and affording those new to the business a footing.

Small farms have also reaped the benefits of expanded networks and secure markets thanks to federal assistance. Government grants often facilitate cooperative endeavors like training and research projects which afford small farms access to tools and knowledge that might otherwise be elusive. Grants also work to equip food banks and schools with the money they need to purchase food from local farms. In some ways, this type of funding, which was intended to address food insecurity, has actually built a communication system between farms, ranches, schools, food banks and restaurants that was previously non-existent.

When supply chain disruptions threatened U.S. food supplies, small farms can played a part in filling food gaps. They have leveraged increase interest in local food during the pandemic era to fight for equality and to become increasingly more competitive. Dismantling funding projects could result in a breakdown of our resilient food systems and lessen our adaptability to supply chain disruptions.

Farmers already feel strapped in their decision making capabilities as they wait to know whether grant money will be released or simply vanish. Planting season is underway and small farms hope they will still have buyers for their harvests in the fall. Will farmers scale back their plans this spring and end up without enough food to supply their markets? Or will they end up with an oversupply of goods and nowhere to sell them? Funding freezes that last too long could push these small supply chains past the point of adaptability.

Will Private Entities Back Small Farms?

In her March speech Secretary Rollins said that rural economies were of top priority and also acknowledged that the “federal government isn’t always the best solution” when it comes to keeping those economic wheels in motion. In essence, if a supply chain is subsidized at multiple points is it truly resilient or efficient? 

If grant money is scaled back, will the private sector step up to the plate to fill financial voids? Multifaceted funding approaches could prove to strengthen food supply chains in the U.S. with local investors meeting needs specific to their regions or offer scalable solutions grant money can’t provide. In this scenario the government works to incentivize private involvement by offering tax breaks for private entities supporting agricultural development in the U.S. 

It would also serve to collect experienced minds in support of a common issue. If regional markets are left to manage growth themselves it could spark technological innovation, streamlined logistics along supply chains and reduced food waste coming from private entities, while simultaneously offering sustainable solutions to food insecurity. For as much as federal funding can get helpful tools into the right hands, over subsidizing can stifle expert private sector insights that could offer more than monthly checks and may have a better pulse on market dynamics.

Supply Chain Implications

We know what happens when a port shuts down for days, when a canal is uncrossable, when railroad companies strike and when animal herds are quarantined to prevent the spread of diseases and parasites. These are major supply chain disruptions. But what happens when the majority of small farms have to scale back? If all of the short chains let go of a few employees, harvest only three quarters what they did last year or spend less money at local feed and equipment stores every month is this considered a major supply chain disruption?

If forty 100-acre farms have to decrease production it is the same as one 4,000 acre farm having to cull part of its herd or plan for a small yield when prices for seeds, fuel or fertilizers rise. It could still create a significant disruption for local economies who depend on agriculture no matter what size the farm is and for supply chains navigating new parameters for supply and demand. Because many of these contracts incorporate food aid services, conservation programs and land reclamation investments the stakes seem higher than simply finding new donors. The damage may already be done.  Even as farms and food hub co-ops who have had contracts assessed and approved are starting to receive checks in the mail once again most could be cautions in their spending this spring. 

Secretary Rollins hinted at building back better and being willing to dismantle regulatory systems that slow productivity; keeping what works well and letting go of practices when better options are available. Efficiency is a far different goal than climate smart and without increased federal funding it will likely be the American consumer who dictates the future of small farms.