How do different farm bill programs impact rural community well being? KEY CONCLUSIONS • The most important farm bill programs are the rural development and nutrition programs because of their wide reach and direct impacts. • Rural development programs make the biggest impact per dollar spent. – Designed to benefit rural communities – Provide the basic building blocks for rural development – Loan guarantees are a particularly powerful tool since they leverage investment from other private and public lenders. • Farm commodity programs are probably the least efficient policy mechanisms for promoting rural community well-being. – Key exception = farm-dependent areas • If rural community outcomes are a primary policy goal and assuming finite federal resources, experts in recommend shifting public investments away from direct payments and into targeted rural development programs. – But politically difficult • Efforts to promote broad rural community development, provide for nonfarm employment, and sustain rural amenities and quality of life may be more important to the well-being of most farm families than benefits from traditional farm programs

1. Assessing the Impacts of the Federal
Farm Bill Programs on Rural
Communities
Douglas Jackson-Smith
Jessica Ulrich-Schad
Curt Grimm

2. FARM BILL GOALS…
Rural Community Well Being?

3. OUR
QUESTION…
How do different farm bill
programs impact rural
community well being?

4. Project Methods
• Qualitative Interviews (2011/12)
– 26 key informants (rural development practitioners,
federal agency staff, academics, USDA state rural
development directors)
– Literature review (studies of impacts of farm bill
programs on rural communities)
• Spatial Analysis of Farm Bill Payments
– Food & Nutrition (SNAP) - USDA
– Farm Commodity Program Payments – USDA/EWG

5. WHAT IS THE FARM BILL?
• ‘Omnibus’ Legislation that funds US Farm
and Food Programs
• Approved roughly every 5 years
• Analysis presented today – focused on
2008-2013 legislation
• Current version signed 2014 
“Agricultural Act of 2014”

6. Farm BILL TITLES
I. Commodities
II. Conservation
III. Ag Trade & Food Aid
IV. Nutrition
V. Farm Credit
VI. Rural Development
VII. Research
VIII. Forestry
IX. Energy (biofuels)
X. Hort. & Organics
XI. Livestock
XII. Crop Insurance
XIII. Commodity Futures
XIV. Miscellaneous
Which Title Gets Most $$$ ?

7. Total Est. Cost = $284 billion
Projected = ~$60 billion/year
Actual = $80 b/yr, $400 billion 2008-2012
97% in just 4 titles

8. COMMODITYPROGRAM
SPENDING

9. FARM COMMODITY PROGRAM IMPACTS
• Farm Structure & Farm Well Being
– Overall impact on farm trends = easily overstated
• Reinforces demographic, market, tech forces
– Short-term direct income benefits can stabilize
rural economies (in farm dependent areas)
– Multiplier effects are diminishing over time
– Long-term benefits reduced as they are capitalized
in land values
• FARM ≠ RURAL: Most rural communities don’t
depend on farming

10. CROPINSURANCE
SUBSIDIES

11. Crop Insurance and Disaster
Assistance Impacts
• No strong empirical evidence of direct positive
link between subsidized crop insurance and
broader rural community well-being
• Can minimize volatility and shocks to farm
income (and help survive natural disasters)
• Private insurance industry can be source of local
jobs
• Subsidized insurance may promote risky
behaviors
• Not very efficient way to promote rural
development, but preferable to commodity $

12. CONSERVATION
PROGRAMSPENDING

13. Conservation Program Impacts
• Few experts see conservation programs as a
major driver of rural development
• Little published research
• Land retirement programs reduce agricultural
economic activity
• Improved environmental quality and wildlife
habitat sometimes supports recreational
economy, but difficult to quantify net effects
on communities

14. FOOD AND NUTRITION SPENDING

15. Food and Nutrition Program Impacts
• By far the biggest amount of federal spending, but
spread across much larger landscape
• Universally viewed as significant and direct
contributor to rural community well being
• Nutrition payments more likely to be spent locally
– higher multiplier effects
• Local food system support has been beneficial in
some places
– but mostly in urban & suburban areas

16. RURALDEVELOPMENT
PROGRAMS
Rotation Funds &
Leveraging =
Actual spending =
$24 billion in FY11

17. Rural Development Programs
• Large research base demonstrating benefits of
different rural development approaches; few
studies of the impacts of farm-bill funded RD
• Experts suggest that USDA-RD programs generate
obvious and significant benefits for many rural
American
– Grants, Loans, Loan Guarantees for infrastructure
– Homeownership/housing
– Capacity building (entrepreneurship, human capital) –
important but less well funded

18. Geographic Differences
in Farm Bill Impacts
• Farm program spending data from USDA
(compiled and made available by the
Environmental Working Group –
farm.ewg.org)
– Note: reflects where farms are (not nec. recipient)
• Food and nutrition spending data from USDA
• Explore overall and per capita spending

19. TOTAL PAYMENTS BY COUNTY
ALL FARM PROGRAMS FOOD AND NUTRITION PROGRAMS

20. TOTAL PAYMENTS PER CAPITA
ALL FARM PROGRAMS FOOD AND NUTRITION
PROGRAMS

21. By Farm
Program
Type

22. KEY CONCLUSIONS
• The most important farm bill programs are the
rural development and nutrition programs
because of their wide reach and direct impacts.
• Rural development programs make the biggest
impact per dollar spent.
– Designed to benefit rural communities
– Provide the basic building blocks for rural
development
– Loan guarantees are a particularly powerful tool since
they leverage investment from other private and
public lenders.

23. KEY CONCLUSIONS (cont)
• Farm commodity programs are probably the least
efficient policy mechanisms for promoting rural
community well-being.
– Key exception = farm-dependent areas
• If rural community outcomes are a primary policy
goal and assuming finite federal resources,
experts in recommend shifting public investments
away from direct payments and into targeted
rural development programs.
– But politically difficult

24. KEY CONCLUSIONS (cont)
• Efforts to promote broad rural community
development, provide for nonfarm
employment, and sustain rural amenities and
quality of life may be more important to the
well-being of most farm families than benefits
from traditional farm programs.

25. THANKS
FULL REPORT available: www.foodandagpolicy.org
(click on “Publications”)
FULL URL: http://www.foodandagpolicy.org/sites/default/files/AGree-
FarmBill%20Programs%20on%20Rural%20Devlp%20Apr2013.pdf