USDA's Perspective on Rural Development in Farm Bill

USDA Gives its Perspective on Rural Development in the Farm Bill

by Chuck Hassebrook, chuckh@cfra.org, Executive Director

The U.S. Department of Agriculture has released a briefing paper on rural development issues in the farm bill. It sets the context and raises some important issues, though it glosses over the importance of small scale entrepreneurship in revitalizing rural communities.

USDA data tells a story. Rural incomes are less than three-fourths of metropolitan incomes. One in five rural counties continues to rely heavily on farming, most in the Great Plains. Just over one-fifth of these counties grew in population since 2000. Rural manufacturing employment declined, though it appears to have stabilized in the last few years.

Among all rural areas, population has grown since 2000. Over half of the rural growth came from a 15 percent increase among Hispanics. In addition, rural recreation counties located near mountains, lakes, beaches, and other natural amenities had rapid growth in employment, income levels, earnings, and other measures of socioeconomic well-being.

USDA’s briefing paper presents three options for the farm bill debate.
1. Target rural development programs to areas of greatest need and areas that won’t gain critical services without assistance. For example, Rural Utility Service loans do not always go to rural areas and are not targeted according to need. Likewise, the low interest loan program for rural high speed Internet has shifted away from those communities that won’t get high speed service without government assistance. And USDA has allowed it to be used in suburban areas, contrary to law.
2. Focus on new non-farm business formation with rural private investment. While small business and micro lending would continue to have a role under this option, USDA would focus on getting equity capital to entrepreneurs – identifying, aggregating, and assisting many small individual investors to finance critical investments. Entrepreneurs would be brought together with rural communities, banks, potential individual rural investors, and non rural investors to create mechanisms to use rural wealth to create more wealth.
3. Move toward regionalized assistance. Federal policy has already moved in this direction. The Delta Regional Authority (DRA) was created in 2001 to fund projects in the lower Mississippi Delta region based on priorities set by the governors. Assistance goes to local multi-county development organizations which plan and implement the projects. The 2002 farm bill authorized three new regional initiatives, including the Northern Plains Regional Authority, but funding was never released.

We urge USDA to place greater emphasis on supporting small and microbusiness development, assisting small communities in developing their capacity to determine their own destiny, and helping ordinary rural people build assets.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
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