March 31, 2011
On Thursday morning, March 31, the House Subcommittee on Agriculture Appropriations held a hearing on Rural Development in Fiscal Year 2012. The hearing started with general remarks from subcommittee members regarding concern about the state of rural America, including a note that USDA Secretary Vilsack previously testified to the Subcommittee that rural America has been in a depression for nearly ten years. In his opening testimony, Undersecretary for Rural Development Dallas Tonsager echoed this concern, explaining that “compared to their urban counterparts, rural Americans are more likely to be over the age of 65, earn lower average incomes, and are more likely to live in poverty.”
Most of the discussion focused on funding for broadband and rural housing. In the midst of those debates, however, Congresswoman Cynthia Lummis (R-WY) requested details about the USDA’s commitment to rural strategic planning. The USDA respondents explained that through “modest grants” the Agency aims to “get communities to work together.”
In 2010 seven regional clusters received such strategic planning grants totaling about $6.6 million. The Rural Business Opportunity Grant (RBOG) program supports regional planning activities to improve economic conditions in rural areas, including but not limited to regional food system development. President Obama’s Fiscal Year 2012 budget requests includes increases within RBOG and the Community Facilities Grants Program to support the Administration’s Regional Innovation Initiative and Rural Community Development Initiative.
Though not discussed in the hearing, the written testimony of Rural Business and Cooperative Service Administrator Judith Canales also praised the Rural Business Enterprise Grant program (RBEG). For example, Idaho’s Bounty, a distributor of local foods, used RBEG funds in order to expand “delivery capacity and service area” while also creating and saving jobs. In fact, showing the interconnectedness of USDA Rural Development programs, some of Idaho’s Bounty’s customers have been recipients of Value-Added Producer Grants, which Canales described as “important” for local producers.
Congressman Sanford Bishop’s (D-GA) opening remark again reminded the committee of the concern for rural America: “When America has a cold, rural America has pneumonia.” To lift the mood, he then moved to the Rural Microentrepreneur Assistance Program (RMAP), highlighting that the program costs much less than traditional loans while creating jobs and stimulating rural economies. As Bishop noted, “there are a lot of communities that could benefit from RMAP.”
Bishop wanted to know how to expand RMAP to more people, including socially disadvantaged entrepreneurs. The witnesses confirmed the benefits of the program, calling it “tremendously advantageous.” Currently in the process of reviewing applications for the third round of RMAP awards, Administrator Canales explained that RMAP is not only successfully supporting microlending but is also promoting “geographic diversity” by spreading the loan making capacity across the entire nation through awards to intermediaries. Canales added that the Agency will be instituting a new training on RMAP for all USDA rural development staff and also will be hosting a stakeholder meeting for all award recipients to date in the near future.