{
  "id": "RL31598",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL31598",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 102074,
      "date": "2002-10-08",
      "retrieved": "2016-05-24T20:03:47.704941",
      "title": "Value-Added Agricultural Enterprises in Rural Development Strategies",
      "summary": "From 1910 to 1990, farmers' share of the overall GDP of the food and fiber system fell from 21%\nto 5%, while the share contributed by the agricultural input and distribution subsectors rose from\n13% to 30%. Congress is concerned about how these and other changes in agriculture are affecting\nrural America and the role  value-added agricultural production  might play in future rural\neconomic\ndevelopment strategies. Value-added production is a legislative concern in the 107th Congress; the\nrural development title in the 2002 enacted farm bill ( P.L.107-171 ) includes provisions for the\ndevelopment of value-added agricultural enterprises. By adding to and capturing the value in\ncommodities grown and processed locally, proponents of value-added production argue that farm\nhouseholds, rural businesses, and rural communities will benefit through new and higher-wage\nemployment, new markets for agricultural commodities, and more vibrant rural and regional\neconomies. \n  U.S. agriculture is also changing rapidly from a sector characterized by production of\nundifferentiated bulk commodities sold in spot markets to one of specialized markets driven by new\nend-user demands. As production shifts away from  commodity  agriculture to\n product  agriculture,\nvertically integrated agribusiness firms are increasingly organizing production into  agro-food\nvalue\nchains  to synchronize all stages of production from seed to supermarket. Value-added\nproduction\nis a central element of agro-food value chains, and control over specific \"identity preserved\"(IP)\ntraits is basic to the development of product agriculture. Many farmers and ranchers are beginning\nto consider how they might reorganize their operations to better anticipate these changes and to\nparticipate in them, for example, by forming \"new generation\" value-added cooperatives, and\nengaging in increased contract relations with value chain integrators. Some producers see IP traits\nand contract production as sources of new markets, lowered risks, and higher farm and ranch\nincomes. Emerging opportunities for biomass-based fuels and materials processing facilities, new\nfood processing plants, and alternative farming systems (e.g., organic) could create important new\nmarkets for producers. Smaller-scale producers too may find new opportunities in\nregionally-branded products, farmers markets, new specialty crops, ethnic markets, or in establishing\ndirect marketing links between farms and regional groceries \n  While capturing more of a commodity's value at the site of primary production can have\npositive impacts on some farm household incomes and farm-related businesses, important questions\narise regarding the extent to which value-added agriculture might become a significant rural\ndevelopment strategy for the future. These identified opportunities, however welcome, are unlikely\nto significantly alter the diminishing role production agriculture plays in most rural economies. \nMoreover, because of its comparatively low wages, low net employment generation, and low\nlabor-skill requirements, value-added commodity manufacturing may not become as effective a\ndriver of broad, sustainable rural economic development and new competitive advantage as rural\ncommunities and advocates might hope for.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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          "url": "http://www.crs.gov/Reports/pdf/RL31598",
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      "topics": []
    }
  ],
  "topics": [
    "Economic Policy"
  ]
}