Agricultural Advancement Consortium

Background

Agriculture remains a vital sector of North Carolina's economy. Sales of products from the farm totaled $9.2 billion in 2007. 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 $66 billion.

The state's farming community, however, continues to be challenged by a number of powerful forces, including 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.

The agricultural sector is dealing with fundamental changes that portend a revolution in how farmers work, produce, market and manage their crops and farms. Tobacco quotas have been eliminated, and the full 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 nontraditional, nonfood 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.

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.