Consortium Overview

The Agricultural Advancement Consortium promotes the benefits of a strong farm sector and considers new ways to increase farm profitability. It conducts original research and awards grants for research and demonstration projects with potential to create new products or markets and to improve agricultural practices.

North Carolina agriculture

Agriculture remains a vital sector of North Carolina's economy. Sales of products from the farm totaled $6.6 billion in 2003. The sale of farm products provides raw materials to the state's food, fiber and forest product manufacturing industry. When the value added to farm products by processing, manufacturing, distribution, and wholesale and retail trade is tallied, North Carolina farms are shown to be the first link of a value chain that in 2000 totaled $62 billion.

The state's farming community, however, continues to be challenged by a number of powerful forces, including stagnant commodity prices, natural disasters, regulatory pressures and events in foreign markets. As a result, the number of farms and the number of farm jobs are declining rapidly. One underlying cause is the small percentage of the value of retail food products that is retained by the farmer - only about 20 cents on the dollar. While the value of all agribusiness-related production and distribution continues to increase in North Carolina, the farmer's share has remained relatively flat. Farm commodity prices have fallen and in some cases plummeted. Hog producers, for example, saw sales drop by $800 million from 1997 to 1998. During that year, the four counties of Sampson, Duplin, Jones and Pender - the state's most productive agricultural area - experienced a $387 million loss in farm income.

The agricultural sector is dealing with fundamental changes that portend a revolution in how farmers work, produce, market and manage their crops and farms. Declines in tobacco quotas have drastically cut farm income across the state in recent years. The quota system is now being eliminated through a buyout program, and the final impact — good or bad — remains in question. A significant change also is taking place in agricultural marketing. Rather than selling commodity crops locally to the highest bidder, many farmers now grow products specifically for the supply chains of major processors, wholesalers and retailers. The products sold are produced according to exacting customer specifications.

Farmers are not sitting idly by as the structure of agriculture changes. Increasingly they rely on computers and the Internet, on new product development, on business, finance and marketing plans for new ventures, and on other technologies and activities commonly associated with finance or high-tech manufacturing. Some farmers look to new crops, alternative markets and value-added products to increase sales and income, often responding to niche market created by changing consumer preferences. Some find profits in non-traditional, non-food products. Producers of commodity crops, meanwhile, are learning to employ new technologies and risk management tools to avoid boom-bust cycles and to protect razor-thin margins.

The consortium

In February 2000, The Governor's Rural Prosperity Task Force recommended the creation of an Agricultural Advancement Consortium to seek ways to turn the tide of agricultural declines and to prepare for the challenges of the 21st century. The N.C. General Assembly authorized the creation of the consortium during its 2000 session. It is housed within the Rural Center. The consortium receives administrative funding from the General Assembly and grant funds from other sources for special projects.

The consortium is a 23-member board that includes state and local leaders in agriculture, business and policy. Its purpose is to develop a shared vision for farming in North Carolina and to coordinate prudent actions to improve farming's long-term vitality. Its goals are to:

Activities

The consortium has made over 30 grants to support research and development projects into alternative crops, new markets, innovative production techniques and new marketing strategies. It also conducts original research. Promising investigations involve a marketing center for burley tobacco, and a soy biodiesel production facility. A current project involves an in-depth assessment of North Carolina agriculture. Its goal is to aid state policy makers addressing the future of this economic sector and the people who depend on it.

In addition, the the consortium has assumed a leadership role in farm disaster relief. In 2001, the consortium led an initiative to distribute $6.6 million to farmers affected by Hurricane Floyd. Two years later, it initiated an effort that provided one-on-one financial counseling for farmers affected by Hurricane Isabel. The consortium also took a broader view, commissioning a study by RTI International of the short-, medium- and long-term policy needs involved in responding to any agricultural disaster.