Federal and state governments are looking to financial incentives to help essential businesses survive in rural areas. 

Across rural America, an emerging trend threatens to undermine nearly a decade of progress in fighting hunger.

As rural populations stagnate and decline, more and more local grocery stores are shutting their doors.The closure of rural grocery stores isn’t an anomaly — many rural institutions like hospitals and banks are struggling to keep their doors open, while rural churches are trying to hang on

But the loss of grocery stores poses an existential threat, Nancy McCloud, a grocery store owner in Mountainair, New Mexico, recently told Stateline, an initiative of the Pew Charitable Trusts. “When you have a small rural town and the grocery store dies, the town dries up and it just blows away,” McCloud said.

More than five million rural Americans live in a food desert, meaning they have to travel more than 10 miles to buy groceries, according to a May 2019 report from the US Department of Agriculture. 

While food insecurity is a national issue (37 million Americans were food insecure in 2018), 78 percent of counties with the highest rates of overall food insecurity are rural, according to the non-profit Feeding America.

In North Dakota, communities with 2,100 people or fewer have seen the number of full-service grocery stores serving them plummet from 137 in 2014 to just 98 in 2019, according to an August 2019 statewide report.

The issue has become so severe and the medical and financial consequences of food insecurity so profound that lawmakers in Republican stronghold North Dakota are considering ways to address the issue. A legislative panel is currently studying local rural food distribution and transportation, and the state has considered providing tax credits to incentivize the opening of more grocery stores. 

But as Lori Capouch, rural development director for the North Dakota Association of Rural Electric Cooperatives, told Stateline, “It was kind of a joke because there’s no income being made to need a tax credit.”

In written testimony before North Dakota legislators in August, Capouch shared the results of the statewide study that found more than 50 percent of rural North Dakota stores have a weekly sales volume of $20,000 or less, compared with the US average of $320,000. These stores have an annual net profit margin of $18,000 or less, and some owners and managers pay themselves after the margin is set, the report found.

Capouch made the stakes surrounding the issue clear in her written testimony. “We are concerned about the loss of food access and the negative effects it will have on our state, our communities and the people living there. We appreciate your willingness to study the issue during the interim and thank you for your time,” she wrote. 

State Sen. Jerry Klein (R-ND), a former grocer, also told the Bismarck Tribune in August that what matters is community investment in these stores; “at the end of the day, I think we’re going to find out it’s going to be up to the communities.”

Legislative action may be more likely in New Mexico, where nearly 54 percent of census tracts qualify as food deserts—the fourth highest rate behind South Dakota, Wyoming, and North Dakota. 

State Sen. Liz Stefanics (D-NM)  is working with Gov. Michelle Lujan Grisham (D-NM) on the issue and believes the state ought to consider providing economic incentives, such as loans or grants, to rural grocery stores in order to spur the local economies of the state’s rural communities. 

If New Mexico were to act, it would be following in the steps of Alabama, Oklahoma, and Nevada, all of which passed legislation to address the issue in recent years. 

Image via Shutterstock.

At the federal level, the US Department of Agriculture manages the Healthy Food Financing Initiative, which supports healthy food retail projects in more than 35 states, but that funding is limited and can be difficult to qualify for. 

The US Environmental Protection Agency’s “Local Foods, Local Places” program also works on the issue by “engaging with local partners to reinvest in existing neighborhoods as they develop local food systems.” These efforts include opening year-round farmers markets, planning cooperative grocery stores, and developing community gardens. 

The EPA’s program is a small one though; they are partnering with just 15 communities in 2019.

A bipartisan group of lawmakers in both the House and the Senate tried to address the issue this year by introducing the Healthy Food Access for All Americans Act, legislation that would provide tax credits and grants to grocery stores, food banks, and other organizations that provide healthy foods in underserved communities. 

The bill has yet to come to the floor of either chamber for a vote, but has received praise from advocacy groups.

“Everyone deserves access to fresh produce and a place to shop for groceries in their community. This legislation will create jobs, improve health, and prevent hunger by supporting the development of food banks, grocery stores and farmers markets in low-income, underserved areas,” said Yael Lehmann, President and CEO of The Food Trust, in a statement in May.

Residents of places like Mountainair can only press on the urgency of the issue. “There are six towns east of here — they just lost the grocery store,” McCloud told Stateline, “then they lost the gas station, and then they lost the bank and now they’re nothing.”