Recently, the Agricultural Marketing Service (AMS), an agency within the United States Department of Agriculture (USDA), initiated several cooperative agreement programs aimed at promoting a more local and equitable food system. According to the Code of Federal Regulations a cooperative agreement is “a legal instrument of financial assistance between a Federal awarding agency or pass-through entity and a non-Federal entity”. 2 C.F.R. § 200.24. Although similar, cooperative agreements differ from federal grants because when a federal agency enters into a cooperative agreement it takes a more active role than when an agency awards a grant.
This article highlights three cooperative agreement programs that AMS has recently initiated. All three are aimed at promoting a more local or regional food system and aim to improve the lives of underserved communities.
Local Food Purchase Assistance Cooperative Agreement Program
AMS announced the Local Food Purchase Assistance (LFPA) cooperative agreement program in December 2021. LFPA is part of the “Build Back Better” initiative and is authorized and funded—up to $400 million—through Section 1001(b)(4) of the American Rescue Plan Act. See Pub. L. no. 117-2. Under the LFPA program, states and tribal governments had the opportunity to apply for funds for the purchase of local domestic food primarily from socially disadvantaged farmers and ranchers. The awardee state and tribal governments are to distribute the food primarily to underserved communities. Each cooperative agreement will be in effect for two years.
AMS defines socially disadvantaged producers as those who “have been subject to discrimination on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or a part of an individual’s income is derived from any public assistance program.” The LFPA website does not clarify how AMS defines underserved communities as it applies to the LFPA program. However, the state and tribal governments are to distribute the procured food to those who are underserved which “may include distribution through foodbanks to families directly, or through foodservice at institutions … such as schools, early childcare centers, senior centers, etc.” Additionally, AMS defines “local”, as it applies to the LFPA program, as food purchased within the state or region or within 400 miles from the distribution destination. If the food only travels within state lines, then there is no mileage limitation.
State and tribal governments had until May 2022 to apply for funds through the LFPA program. As of September 13, 2022, AMS has entered into cooperative agreements with 34 states, five tribal governments, Guam, and Puerto Rico. Once a state or tribal government signs a LFPA agreement, AMS will work with the state or tribal government to develop and administer a program that best suits the producers and communities in that state, territory, or region.
To ensure the state and tribal governments are staying on track in their procurement and distribution efforts, the state and tribal governments must submit quarterly and annual performance reports to AMS. Additionally, the state and tribal governments will submit a final report that offers a summary of the quarterly and annual reports, a narrative explaining what new marketing opportunities have become available to socially disadvantaged producers, and a report on how the state plans to continue to distribute food to underserved communities.
Most recently, on September 7, 2022, AMS announced that it entered a LFPA agreement with the state of Minnesota. In the announcement, Minnesota explained that “the Minnesota Department of Agriculture will issue a call for community procurement and distribution project proposals in fall 2022.” Not all state and tribal governments have yet expressed a timeline in which local farmers and producers can sell food to the state or tribal government as part of the LFPA program. However, producers interested in selling food to their state or tribal government as part of the LFPA program should reach out to their state government for more information on how to participate.
AMS’s Local Food for Schools Cooperative Agreement Program
The Local Food for Schools (LFS) cooperative agreement program is similar to the LFPA program. The LFS cooperative agreement program is authorized and funded—up to $200 million—through the Commodity Credit Corporation Charter Act. See 15 U.S.C. §714c. Although similar to the LFPA program, there are some key differences. The following is a list of these difference:
- The main difference between the LFS and LFPA programs is that under the LFS program, states must distribute the food purchased from socially disadvantaged producers to schools participating in the National School Lunch and Breakfast programs.
- Unlike the LFPA program, LFS is a one year, instead of a two-year, program.
- Under LFS, only state and territorial governments were able to apply for funds. Tribal governments were not included because schools on tribal land participating in the national school meal programs usually fall under the jurisdiction of a state government agency.
- States awarded funds through the LFS program can procure food not only from farmers and ranchers, as is the case under the LFPA program, but also from small businesses.
- Foods procured and distributed through the LFS program must be unprocessed or minimally processed. Under the LFPA program, states can procure processed foods.
- LFS funds can only be used for direct costs which includes the cost for procuring, storing, and distributing the food. Unlike the LFPA program, the LFS program does not allow states to use funds for indirect costs such as administrative costs which includes salaries.
Like the LFPA program, participating states and territories are required to submit quarterly reports and a final report. The quarterly reports should provide AMS with data on the state’s procurements. The final report should provide AMS a summary of the quarterly report data and include a narrative explaining what new marketing opportunities the program provided to local and regional farmers and producers, socially disadvantaged farmers and producers, and small businesses.
States had until August 31, 2022, to apply to the LFS program. As of September 13, 2022, AMS has only signed one LFS cooperative agreement and that is with Minnesota. According to Minnesota’s LFS executive summary the LFS funds “will be sub-awarded to schools through a cooperative Farm to School grant program that will reimburse schools for local food purchases.”
USDA’s Regional Food Business Centers
The Regional Food Business Centers program is the most recently announced program and differs from the other two programs in that the application is open to a wider array of entities than just state, territorial, and tribal governments. The Regional Food Business Centers program is authorized and funded—up to $400 million—through the Consolidated Appropriations Act of 2021. Pub. L. No. 116-260, Division N, Title VII, Subtitle B, Section 751. The mission of the Regional Food Business Centers program is to “support producers by providing localized assistance to access local and regional supply chains, including linking producers to wholesalers and distributors.”
AMS aims to fund at least six Regional Food Business Centers. Of the six, AMS envisions that one will be a national tribal center, at least one will serve Colonias (or counties on the US/Mexico border), at least one will serve the Mississippi Delta region, and at least one will serve the Appalachia area.
Each center will have three main responsibilities: coordination, technical assistance, and capacity building. The regional food centers are to coordinate with USDA, other federal agencies, state and tribal agencies, and stakeholders with the goal of developing and implementing strategic and funding plans. As to technical assistance, the centers are to “provide direct business technical assistance to small- and mid-sized food and farm businesses (producers, processors, aggregators, distributors, and other businesses within the food supply chain) and food value and supply chain coordination.” With the responsibility of capacity building, the centers, through sub-awards, are to provide financial assistance to regional projects and businesses.
Those eligible to apply include “eligible entities representing a partnership”. A partnership, according to AMS, is “an agreement among three or more eligible entities representing at least two eligible entity types”. AMS further defines “eligible entities” as producer networks or associations, food councils, tribal governments, state agencies or regional authorities, institutions of higher education, nonprofit corporations, and economic development corporations. In other words, applications should be submitted by a group of at least three entities, all of which fall under at least two of the categories listed above. When it comes to submitting applications, partnerships should propose a geographic region that reaches at least three states or territories or has at least a 400-mile radius. AMS is accepting applications until December 15, 2022.
After the COVID-19 pandemic uncovered the vulnerabilities of the American supply chain, USDA made it a priority to strengthen and develop local and regional food systems. USDA has also made it a priority to improve equity among socially disadvantaged producers and underserved communities. The three cooperative agreement programs highlighted in this article—the LFPA program, the LFS program, and the Regional Food Business Centers—are all tools AMS is using to achieve its goals. These programs aim to serve local, small-scale producers, however producers interested in participating in these programs will need to contact their state or tribal government to learn more.
To learn more about the LFPA program, click here.
To learn more about the LFS program, click here.
To learn more about the Regional Food Business Centers program, click here.
To read more National Agricultural Law Center resources on local food systems, click here.
**This article was written by former NALC Staff Attorney Jana Caracciolo.