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Tobacco Community Reinvestment Fund Generates Investment, Protects Jobs, Looks to Future

By Jason Roehrig, RAFI-USA Program Director, Tobacco Community Reinvestment Fund

Producer and community projects supported by RAFI’s Tobacco Communities Reinvestment Fund (TCRF) have seen remarkable success in 2003. These diverse projects demonstrated innovative ways to replace lost tobacco income, found new uses for tobacco equipment and facilities, and enhanced and protected farms and natural resources. Most importantly, these projects stimulated additional rural investments and protected and generated employment in rural areas.

The TCRF was created in 1997 to address the barriers preventing farmers and rural communities from capitalizing on available diversification opportunities. In 2003, with the support of the Tobacco Trust Fund Commission, the Reinvestment Fund was able to award 20 cost-share grants to both producers and rural communities totaling $230,000.

As a result of the cost-share grant money awarded by RAFI, an additional $716,000 has been invested through these projects in alternative agricultural enterprises. That is a total of more than $900,000 of investment in enterprises that have helped rural North Carolinians diversify their incomes and reduce their dependency on tobacco. These new enterprises developed through RAFI’s projects attract investors interested in building on the work done with the grant awards.

Along with monetary investments, these projects have made investments in the people of rural communities. This year, the cost-share grants enabled 170 people to remain employed on the farm and created 22 new jobs. In many cases, the quality of employment of existing farm employees has improved. Part-time and seasonal employees receive extended hours and better pay as a result of the new farm enterprises. Additional positions have and will be created to accommodate the additional labor needs on the farm.

TCRF project participants have shared their experiences and lessons with more than 1,000 individuals, some of who have taken what they’ve learned back to their own farms and communities. For example, Ronald Hayes, a Columbus County farmer and cost-share grant recipient, held a field day in July where he discussed his meat goat operation with over 70 attendants. As a result, 4 local farmers have diversified their operations by adding meat goat production, helping to keep them employed on the farm.

RAFI’S Tobacco Community Reinvestment Fund is now looking forward to 2004. The Board is currently evaluating proposals for the next round of grants and award winners will be announced in March.

Producer grants can receive up to $10,000 of funding and community grants can receive up to $30,000.
For more information on the Tobacco Community Reinvestment Fund and to view descriptions of the 2003 grant recipients, visit http://www.rafiusa.org/programs/tobacco/tobacco.html.

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Conservation Security Program Sees Many Changes in USDA Proposed Rule

By Scott Marlow, RAFI-USA Program Director, On Farm Research, Farm Recovery with materials from the National Campaign for Sustainable Agriculture

On January 2, 2004, the USDA released the proposed final rule for the Conservation Security Program (CSP). The CSP was passed in the 2002 Farm Bill and was designed to reward farmers for conservation practices that they use on their farms. The proposed rule differs significantly from the authorizing legislation in several key areas.

In 2003, Congress capped the funding of CSP to $4 billion over 10 years. In order to deal with this "capped entitlement," USDA restricted both the eligibility and rewards of the CSP. However, at the end of January, Congress eliminated the cap. Unfortunately, the proposed rule retains the budget limitations and severely restricts the program. There is some question about how the USDA will respond to the budget changes.

The CSP, by law, is to be implemented nationwide and made available to all qualifying farmers and ranchers. The proposed rule, in contrast, limits eligibility to CSP to a very small number of farmers and ranchers who live within certain watersheds (to be named later) and, within those watersheds, to certain "categories and subcategories" of producers (also unspecified and to be named later).

The CSP, by law, rewards both existing and new on-farm conservation initiatives and requires all participants to design conservation plans that will meet the non-degradation or sustainable use levels for resources of concern. The proposed rule, in contrast, would require, as a condition of eligibility, that all participants meet the non-degradation/sustainable use levels prior to enrolling in the program. That means only producers who have already solved resource and environmental problems to the Natural Resources Conservation Service (NRCS) prescribed "gold standard" criteria would be eligible for any level of CSP participation.

The CSP, by law, provides participants with (1) base payments to reward participation, (2) cost-share payments of up to 75% (90% for beginning farmers and ranchers) for new practices and cost-share maintenance and management payments for ongoing practices, and (3) enhanced (bonus) payments for exceptional environmental performance, tackling additional local resource concerns, and undertaking on-farm research and monitoring and evaluation activities. The proposed rule:

The CSP, by law, specifically provides enhanced payments for managed rotational grazing systems, diversified resource-conserving crop rotations, and conservation buffers in recognition of the excellent multiple conservation benefits and environmental protection they deliver and the heavy penalties farmers who use them face in federal commodity programs. The proposed rule, in contrast, provides no recognition of these conservation systems or the clear requirements of the law.

CSP contracts, by law, last for 5 or in some cases up to 10 years and farmers and ranchers may renew their CSP contracts at the end of the contract period - an essential feature of any green payments program designed to provide farmers support for maintenance and enhancement of conservation systems and environmental services. The proposed rule, in contrast, prohibits contract renewals.

There is currently a 60-day period in which individuals can send comments to the USDA on the proposed rule. For specifics of the new rule and the NRCS summary, visit: http://www.nrcs.usda.gov/news/index.html#csp.

For more information on the CSP, contact Scott Marlow at RAFI-USA or the national Campaign for Sustainable Agriculture http://www.sustainableagriculture.net/

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Arkansas Supreme Court to Hear Hog Farmers’ Arguments

Former Tyson hog farmers from Arkansas and eastern Oklahoma will have their voices heard in Little Rock when the Arkansas Supreme Court hears oral arguments regarding arbitration on Thursday, February 5, 2004.

In August 2002, Tyson Foods Inc. notified many of the state’s hog producers, via a late evening telephone call, that their contracts would be terminated. Hare, Wynn, Newell & Newton, L.L.P. of Little Rock (Hare Wynn) is representing more than 80 farmers in a lawsuit against Tyson Foods, citing “Tyson’s disregard for their corporate responsibility in the abandonment of its hog farmers, and the financial devastation the profit-driven decision has and will cause.” Since the original lawsuit was filed in September 2002, more than 10 additional farm families have joined the lawsuit.

One year ago, on January 23, 2003, Circuit Judge Ken Coker of the Pope County Courthouse heard arguments to determine whether the lawsuits brought by the pork producers against Tyson Foods should be sent to arbitration or if arguments should be heard in a jury trial. Tyson had requested forced arbitration in October 2002 to avoid a jury trial. Judge Coker ruled in favor of the pork producers on February 21, 2003.

Judge Coker cited that “the arbitration clause in the Swine Contracts entered into by the parties lacks mutuality of obligation”, thus making the arbitration clause “invalid and unenforceable.”

On March 21, 2003, Tyson Foods filed a notice of appeal in the case, and in August 2003, the Arkansas Court of Appeals transferred the case to the Arkansas Supreme Court to clarify the Arkansas law regarding arbitration agreements. On January 14, 2004, four months after all appeal briefs were filed, the Supreme Court announced a hearing date.

“We look forward to presenting our issues to the Arkansas Supreme Court and moving forward with this case,” says Clark Mason, Hare Wynn attorney for the hog farmers.

“[It] serves as an excellent example of our legal system at work and also, at the same time, how companies such as Tyson attempt to avoid facing a jury of ordinary citizens.”

Mason expects a decision on the case within 2-3 weeks after the hearing.

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Edited by Susan Jelinek (919) 696-2579; Susan_Jelinek@ncsu.edu
For more about RAFI-USA and back issues of the bulletin, see the RAFI-USA Home Page or call (919) 542-1396.
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