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The Farmer-to-Consumer Direct Marketing Act of 1976 authorized $3 million for Federal grants to initiate, encourage, develop, or coordinate methods of direct marketing from farmers to consumers. The Federal Direct Marketing Program, a pilot effort which began with the Act, ends after the 1980 growing season. Designed to give farmers higher returns and consumers cheaper, fresher food, the program has recently become more significant in view of increasing concerns over energy limitations, loss of prime farmland, and dependence on out-of-region food sources. Appropriations were made available for use by State departments of agriculture and by the U.S. Department of Agriculture (USDA) Extension Service (now the Science and Education Administration-Extension) during fiscal years 1977 and 1978. The USDA Economics, Statistics, and Cooperatives Service also received a supplemental appropriation in 1978, to conduct a continuing survey of existing methods of direct marketing; equal amounts were budgeted in fiscal years 1979 and 1980. In 23 States and Puerto Rico, 21 direct marketing projects have been approved and are being administered jointly by the USDA Agricultural Marketing Service, and Science and Education Administration-Extension.

As farmer-to-consumer direct marketing increases, small-volume producers may be persuaded to keep their land and/or increase production. Farm income could be improved, consumers could be provided with fresher, lower cost food, and dependence on out-of-region food sources and on long distance transportation may be reduced. However, the pilot program is limited. Many final project evaluations will be based on activities which either cannot meet their objectives within the program's funding period or are of a continuing nature. Project progress reports have been subjective and have not contained enough information on problems and constraints to enable the program officials or Congress to fully evaluate the program's merits. Federal activities need to be better coordinated with State, local, and privately sponsored activities to ensure that maximum benefits are achieved. Further, the program does not provide for adequately assessing the impact of direct marketing on issues which have become more important since the passage of the Act. Extending the program could allow for more participation by local governments and private nonprofit groups and time for USDA to assess its effects on energy, land, and resource issues. While increased direct marketing may have an adverse effect in some sectors, the extent of any negative effects has not been estimated. The negative effects are believed to be minor in view of the potential benefits.

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