Outreach for Socially Disadvantaged Producers (2501 Program)

Outreach for Socially Disadvantaged Producers (2501 Program)

August 18, 2023
Outreach for Socially Disadvantaged Producers (2501 Program)
The 2018 farm bill (Agriculture Improvement Act of 2018,
gender (P.L. 100-233; 7 U.S.C. §2003). This action was
P.L. 115-334) reauthorized and expanded support for
followed by subsequent actions in periodic omnibus farm
socially disadvantaged farmers or ranchers (SDFRs) within
bill legislation starting in the 1990 farm bill (Food,
programs administered by the U.S. Department of
Agriculture, Conservation, and Trade Act of 1990; P.L.
Agriculture (USDA). Specifically, Congress expanded
101-624, §2501). Specifically, the 1990 farm bill included
support within a long-standing USDA program supporting
Section 2501 (Outreach and Assistance for Socially
SDFRs—the 2501 Program (also known as the Outreach
Disadvantaged Farmers and Ranchers) establishing the
and Assistance for Socially Disadvantaged and Veteran
2501 Program to support USDA’s commitment to ensuring
Farmers and Ranchers Program)—and also expanded
underserved and veteran farmers, ranchers, and foresters
support for SDFRs under some other USDA programs.
can equitably participate in USDA programs. The provision
Congress may consider additional changes to the 2501
further established a narrower definition of SFDRs (7
Program and support for SDFRs and other underserved
U.S.C. §2279) based on race and ethnicity only (excluding
producer groups as it considers farm bill reauthorization.
White non-Hispanic women).
Definitions in Statute
The 1990 farm bill authorized annual appropriations to
Under the 2501 Program, an SDFR (as defined at 7 U.S.C.
carry out the 2501 Program and for USDA to award grants
§2279) refers to a farmer or rancher who is a member of a
and enter into cooperative agreements with eligible entities.
group whose members have been subjected to racial or
The 2002 farm bill (Farm Security and Rural Investment
ethnic discrimination. This statutory definition includes
Act of 2002; P.L. 107-171) and the 2008 farm bill (Food,
underserved producer groups (not limited to) farmers and
Conservation, and Energy Act of 2008; P.L. 110-246)
ranchers that identify as Native American, Alaska Native,
reauthorized appropriations and made further clarifying
Black or African American, Asian American, Native
changes to the 2501 Program. However, congressional
Hawaiian and Pacific Islanders, Hispanic or Latino, or are
appropriations during this time remained well below
refugee and immigrant producers belonging to these groups.
authorized levels and USDA only began awarding grants
Over time, the definition of eligible producer groups has
under the 2501 Program in 2010. This followed the 2008
expanded to include veteran farmers or ranchers (VFRs).
farm bill, which authorized mandatory Commodity Credit
VFRs include those who have served in the U.S. Armed
Corporation (CCC) funds of $15 million for FY2009 and
Forces (as defined in 38 U.S.C. 101(10)) during the most
$20 million annually for FY2010-FY2012 (§14004).
recent 10-year period and were discharged or released
Mandatory funding is not subject to annual appropriations.
under conditions other than dishonorable; VFRs include
those who also meet the definition of a beginning farmer or
The 2008 farm bill also created the Office of Advocacy and
rancher (BFR) and have not operated a farm or ranch for
Outreach within USDA’s executive operations to improve
more than 10 years or previously operated a farm or ranch.
access to USDA programs by underserved groups such as
SDFRs as well as “small farms and ranches” and
Available race and ethnicity data suggest that SDFRs
“beginning farmers or ranchers” (§14013). The 2014 farm
meeting the definition at 7 U.S.C. §2279 accounted for 9%
bill (Agricultural Act of 2014; P.L. 113-79) expanded
of all farms, 10% of all farmed acres, and 8% of farm sales
eligibility under the 2501 Program to include VFRs
reported in the 2017 Census of Agriculture data—the most
(§12201). It also authorized funding to establish an SDFR
recent year available from USDA. These data do not
policy research center at an 1890 institution—referring to
include White non-Hispanic women who are also included
the historically Black land-grant universities established in
under an alternative SDFR definition (7 U.S.C. §2003).
the Second Morrill Act of 1890 (7 U.S.C. 321 et seq.)
Including all women, regardless of race and ethnicity, about
(§12203). Congress provided mandatory funding of $10
30% of all U.S. farms in 2017 would be considered to be
million annually for FY2014-FY2018 (§12201). In
SDFRs. Which of these two statutory definitions apply may
FY2013, the 2501 Program was not operational while
vary by USDA program. (For more background, see CRS
Congress continued to debate farm bill reauthorization and
Report R46727, Defining a Socially Disadvantaged Farmer
program funding had lapsed.
or Rancher (SDFR): In Brief.) Reported SDFR data also
might not include VFRs eligible under the 2501 Program.
The 2018 farm bill made additional 2501 Program changes.
It renamed the Office of Advocacy and Outreach to the
Legislative History of the 2501 Program
Office of Partnerships and Public Engagement (OPPE)
Congress first added support for SDFRs in the late 1980s in
(§12406). It merged the existing 2501 Program and the
order to improve access to USDA farm credit and loan
existing Beginning Farmer and Rancher Development
programs by agricultural producers who may have been
Program as the two subprograms of the newly created
subjected to discrimination based on race, ethnicity, or
Farming Opportunities Training and Outreach (FOTO)
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Outreach for Socially Disadvantaged Producers (2501 Program)
program (§12301), providing mandatory funding to be split
include the 1890 institutions and the 1994 institutions,
equally between the two subprograms of $30 million
referring to Native American tribally-controlled colleges
annually (FY2018-FY2019), rising to $50 million annually
and universities that were provided land-grant status in the
in FY2023 and each year thereafter. In addition, Congress
Equity in Educational Land-Grant Status Act of 1994 (P.L.
has provided additional funding through annual
103-382; 7 U.S.C. §301 note). Eligible applicants must
appropriation acts and pandemic supplemental
have at least three years of experience in working with
appropriations. Other farm bill provisions provide support
underserved groups. Individual farmers and ranchers are not
for underserved producers under several other USDA
eligible to receive grants.
programs. Programs include crop insurance, disaster
assistance, farm credit and loan assistance, farmland
USDA reports it has awarded 615 grants totaling more than
conservation support, research and extension, market
$194 million under the 2501 Program since 2010. These
promotion, training and education, and programs to match
summary data, however, do not match totals compiled from
retiree landowners with buyers. See CRS In Focus IF12096,
individual annual data published by USDA. Table 1 and
Farm Bill Primer: Beginning and Underserved Producers.
Figure 1 summarize available USDA-reported annual data
for the 2501 Program. These data highlight the growing
2501 Program Grant Awards
prevalence of CBOs and other nonprofit organizations as
The 2501 Program provides eligible organizations with
the leading recipients of 2501 Program grants in terms of
grant funds for training and technical assistance projects
both the number and the amount of program grant awards,
designed to assist eligible underserved producer groups that
as compared to HEIs and land grant institutions.
own and operate viable agricultural enterprises. Eligible
activities include instructional and hands-on demonstration
Figure 1. 2501 Program Grant Awards, FY2018-2022
training on the farm, in classrooms, or in workshops. Other
eligible activities include assistance in “USDA loan
application processes, crop and livestock production,
business and market planning, land acquisition or tenure,
farmer-related legal assistance, establishment of local food
systems, alternative enterprise opportunities, diversifying
operations,” and other value-added activities. Grant funds
may be used for nonconstruction costs and instructional
processes and may include the disposition of certain types
of equipment purchased and used for training purposes.
Table 1. 2501 Program Grant Awards, FY2010-2022
Number
Grant
HEIs CBOs and
of
Funding
Other
Year
Grants
($1000)
Nonprofits

Source: CRS from USDA publicly reported annual data.
FY2022
52
$36,131
8
44
Considerations for Congress
FY2021
29
$18,652
12
17
As Congress debates farm bill reauthorization, it may
FY2020
36
$13,409
9
27
consider additional changes to the 2501 Program. A 2021
audit of the 2501 Program by USDA’s Office of Inspector
FY2019
33
$16,216
9
24
General (OIG) “disclosed a pattern of broad and pervasive
FY2018
53
$9,823
22
31
mismanagement of 2501 Program grant funds” during the
FY2018-FY2019 period. This resulted in USDA awarding
FY2017
46
$8,440
15
31
grants to ineligible applications during this time. OIG
FY2016
43
$8,400
14
29
determined that the “independent review panel did not
follow established guidance and did not apply a consistent
FY2015
54
$9,100
24
30
methodology to award points.” OIG found that agency
FY2014
62
$9,100
25
37
personnel did not follow “procedures OPPE established to
monitor and evaluate grantee performance effectively” and
FY2013
0
0
0
0
that OPPE “did not establish a performance plan and set
FY2010-12
59
NA
25
34
performance goals and indicators to measure and assess its
Source: CRS from USDA publicly reported annual data. HEIs include
progress towards achieving the 2501 Program’s purpose.”
higher education institutions (HEIs); CBOs include community-based
OIG has recommended a series of program controls. A
and other nonprofit organizations. The program was not operational
2019 Government Accountability Office report further
in FY2013. FY2010-FY2012 data are reported in aggregate only.
highlights challenges associated with the ability of SDFRs
to access farm credit and general data limitations to address
Entities eligible to receive grants under the 2501 Program
such access concerns, as well as the need to improve
include higher education institutions (HEIs),
USDA’s outreach efforts and to educate producers on
nongovernmental community-based organizations (CBOs),
available credit options and lending requirements. Congress
and nonprofit organizations that provide agricultural
may consider these findings among other policy
education or agriculturally related services to underserved
considerations as it debates the next farm bill.
or veteran farmers and ranchers in their region. HEIs
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Outreach for Socially Disadvantaged Producers (2501 Program)

IF12475
Renée Johnson, Specialist in Agricultural Policy

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