A tour highlights how farms used USDA grants that the White House argues should be eliminated. By: Don Jenkins
A farm tour in northwest Washington Monday showcased the rippling economic gains from USDA grants, which the White House says the government shouldn’t be handing out.
The Northwest Agriculture Business Center, which helps farms apply for grants, organized stops at two small dairy processors and a produce farm that have benefited from USDA grants.
The federal grants spur private investment and lead to permanent jobs at small farms trying to fill niches in markets dominated by big companies, the business center’s project manager, Jeff Voltz, said.
“How do you do good for the little guys?” he asked. “That’s what we’re trying to do.”
The Trump administration has presented Congress a $137 billion USDA spending plan for the fiscal year beginning Oct. 1, down about $12 billion from the current budget, according to a USDA budget summary. Some of the savings would come by cutting grants to individual businesses.
The White House argues tax and regulatory relief would be more effective in helping rural economies. “The government should not be subsidizing the advertising and promotion of commodities, singling out select commodities for special assistance, or providing subsidies to producers for the processing of their products,” according to a White House paper on budget reform.
The Trump administration proposes to entirely eliminate “value-producer grants,” which help farms add employees, buy packaging materials and market products. Farms must match the grants with capital investments.
“You can’t buy ‘hard objects’ with the USDA grant, but it frees up your capital so you can do that,” said Lynden dairy farmer Larry Stap, owner of Twin Brook Creamery.
Stap left the Darigold cooperative more than a decade ago to bottle non-homogenized milk from his 200-cow dairy. Twin Brook distributes milk to about 200 stores and has 11 employees, about nine more than if it had stayed solely a dairy, Stap said.
A $276,000 value-added producer grant helped the business survive early struggles, he said. “I don’t know if we would have made it.”
The USDA last fall awarded 325 value-producer grants totaling $45 million. Washington received 18 grants, second only to Virginia’s 20. The Washington grants will support marketing a variety of products, including cider, mead, kale chips and organic grass-fed milk.
Grace Harbor Farms in Custer, Wash. — makers of yogurt, flavored milk and kefir (drinkable yogurt) — received a $249,000 USDA grant in 2015 for payroll, supplies and marketing.
Meanwhile, the farm invested in capital improvements, said David Lukens, whose parents, Tim and Grace Lukens, started the business in 1999.
“The grant was instrumental in becoming more efficient,” he said. “That was a huge boost in the arm for us.”
Grace Harbor receives milk from a 70-cow diary and an 80-goat dairy. Its products are sold in about 120 stores in Western Washington.
The farm estimates that the grant allowed it to add four or five full-time workers. It has a total of 12 employees, and David Lukens said he has ambitions to grow. He predicted rising demand for kefir. “We’ll see in three to five years if I’m right,” he said.
Cloud Mountain Farm Center, in Everson, is a 42-acre farm owned by a non-profit organization. Interns provide the labor and novice farmers lease plots. The center received a $49,000 rural-development grant and bought equipment to wash and spin salad greens. Previously, the center used washing machines and clothes driers.
The equipment helps the center package the bags of salad sold to restaurants and cafeterias, Executive Director Tom Thornton said. The center may be a non-profit, but it won’t survive as a money-loser, he said.
Source: Capital Press