WHY PUBLIC POLICIES ARE NEEDED

* Farmers and ranchers take home a larger portion of the food dollar when they sell directly to consumers, turn farm products into food products, or join farmer cooperatives/alliances that do their own processing and marketing. The farm value share of the money spent in conventional supply chains shrunk from 36 cents for every food dollar in the 1970s to only 22 cents in 2005. Meanwhile, an informal survey performed by the Sustainable Agriculture Coalition of growers selling at New York City's Greenmarket in 2007, revealed that farmers there take home roughly 75% of the food dollar spent at the market.

* Despite the huge demand for farmers' markets and other farmer-to-consumer direct marketing opportunities, federal support for developing, improving, and expanding these markets has not kept pace. In 2007, 326 applications equaling $15.6 million were submitted for funding under the Farmers' Market Promotion Program, but because the program was appropriated $1 million in FY07, only 23 grants were awarded. Similarly, from 2001 through 2006, USDA could only fund 35% of the Value Added Producer Grant applications submitted.

* Interstate commerce restrictions for state-inspected meat processing plants have shut smaller processors out of key markets, contributing to their decline. Although the Federal Meat Inspection Act requires state inspection standards to be "at least equal to" their federal counterparts, federal law bars meat products processed in state-inspected plants from being sold in interstate commerce. An increasing number of farmers, ranchers, and small meat processors have been calling for a repeal of this ban because of the unfair limits it places on potential markets for small and sustainable livestock producers, and the prohibitive expense small-scale producers must bear to comply with federal inspection standards.

STATUS OF RELEVANT PROVISIONS IN HOUSE AND SENATE BILLS

There are key differences between the House and Senate versions of the Farm Bill that affect marketing opportunities for producers that must be resolved during conference committee negotiations:

Value-Added Producer Grants Program

* Despite the success of value-added grants in raising farm income and the overwhelming popularity of the VAPG program, the House version of the farm bill cuts the program by $10 million to $30 million in annual mandatory funding and the Senate bill includes no mandatory funding at all. Urge the 2008 Farm Bill conferees to provide no less than the current $40 million in annual mandatory funding for the program.

* The House bill includes a 10% set-aside for mid-tier value chain food network projects. The Senate bill, on the other hand, includes a 10% set-aside for technical assistance, outreach, and market research, including funding for local food system infrastructure grants and mid-tier value chain grants. Both bills include a funding priority for projects targeting small and mid-sized farms. The conference committee should combine the House's mid-tier value chain provisions with the Senate technical assistance and local food system provisions, with the preference for small and mid-sized farms and renewed full funding to create a strong, comprehensive package.

Farmers Market Promotion Program

* The House bill provides $35 million in mandatory funding over 5 years and clarifies that the program is intended to promote all forms of direct farmer-to-consumer marketing. The House bill also includes funding for Electronic Benefits Technology (EBT) at farmer markets to provide access to local food for food assistance program participants. The Senate bill provides $30 million in mandatory funding over the five years for FMPP plus an additional $5 million in a separate program for farmers market EBT. Urge the 2008 Farm Bill conferees to retain the funding for this program in the final bill, to adopt the House clarifying language, and to ensure $5 million in EBT funding is included in some manner.

Interstate Shipment of State-Inspected Meat

* The Senate bill includes a provision that is the result of a compromise between farmer, consumer safety, and union groups which allows meat processed in state-inspected facilities to be sold in interstate commerce, but only those plants with 25 or fewer employees. It also provides federal oversight of state plants, an outreach and training program for small plants, and cost share for inspection and testing. The House bill, on the other hand, includes a provision that allows state-inspected meat to be shipped across state lines, but requires the state inspection criteria to be identical to the federal with no provision for improved regulation, training or inspection. Urge the 2008 Farm Bill conference committee to adopt the Senate version of in the final farm bill.