Small investments in farmer innovation can bring hefty economic rewards, according to a new study by researchers at the Center for Business and Economic Research at UNC-Greensboro.

The study analyzes The Tobacco Communities Reinvestment Fund, a program at the Pittsboro-based Rural Advancement Foundation International – USA.

The program, which provides small grants to farmers and farmer groups piloting innovative enterprises on North Carolina farms, has invested $900,000 in 17 counties of Western North Carolina between 2009 and 2011. It works in partnership with WNC Agricultural Options, a program of N.C. Cooperative Extension, to administer grants in these counties.

pic_hendersonmcdonellIn the last three years, the program has invested $3.6 million in 367 projects across the state, with a result of more than $33 million in economic benefits to the state and more than 4,100 new jobs, according to a recent study by Dr. Andrew Brod at the UNC-Greensboro Center for Business and Economic Research.

The study looks at the money and jobs created directly on-farm and the multiplier effect in the state economy. The program created $205 new dollars circulating in the economy for every dollar spent, the study concluded.

The program is funded by the North Carolina Tobacco Trust Fund Commission. The 2011 budget proposed by the Appropriation Committee in the state’s House of Representatives would abolish the Commission and re-direct its funding.

The program’s cost-share grants, which average about $10,000, allow farmers to diversify their operations and develop new products and markets, according to Linda Shaw, executive director at RAFI.

“Investment in farm enterprises is an effective driver of economic growth in struggling rural communities,” Shaw said. “More than 80 percent of participating are still going strong after their third year. They create jobs, preserve farmland, enable farmers to innovate and share their ideas, and provide nutritious food.”

“I am a big proponent of the Tobacco Trust Fund Commission,” says Steve Tate of Goat Lady Dairy in Climax, N.C.

“People are so frustrated and want say that the system is screwed up and that government does not work,” Tate said. “Yes, a lot is wrong, but the tobacco settlement and the way it’s negotiated so there is money for farmers in rural communities, in my mind that is a huge success.”

Shaw says farmers and rural advocates will fight the cuts. “Rural communities have been hit hard in the economic downturn. This study demonstrates that these small investments in farm businesses are one of the best ways to create jobs and bring dependable income to the areas that need it most.”

For more information about 2011 grantees in Western North Carolina, see:


RAFI is a nonprofit organization that cultivates markets, policies and communities that support thriving, socially just and environmentally sound family farms. RAFI is based in Pittsboro, NC. Find us online at or call (919) 542-1396.