Today, the House Agriculture Subcommittee on Rural Development, Research, Biotechnology, and Foreign Agriculture held a hearing to identify duplicative federal rural development programs.  The hearing focused on reducing duplication, fragmentation, and overlap in rural development programs for a 2012 Farm Bill.  USDA Under Secretary for Rural Development Dallas Tonsager and Government Accountability Office (GAO) Director of Financial Markets and Community Investment, William Shear testified as witnesses.

Opening Remarks

Chairman Tim Johnson (R-IL) opened the hearing by stressing the need to streamline programs given “scarce resources.”  Ranking member Jim Costa (D-CA) followed; he noted that “because of population disparities, often rural areas are overlooked.”

Rep. Costa emphasized that program consolidation should occur with serious consideration to whether or not a program is duplicative.  He referred to the President’s  Consolidation Authority Act, which would combine six agencies, including the Department of Commerce and Small Business Association (SBA), as “better bang for the buck,” but cautioned against blind consolidation.  Rep. Costa cited from personal experience the Value-Added Producer Grant (VAPG) as an example of a program that has come under fire, but one that he believes provides an essential service.

“These grants help agricultural producers and cooperatives who are not always on a level playing field,” he stated.  Costa explained how VAPG helped the Rosa Brothers, based in his district, grow their family-owned dairy business.

Finally, Costa urged USDA to submit the promised report defining “rural.”  He proposed his own definition, one where “rural” was flexible enough to meet the demands of the community and included regions with urban centers in otherwise very rural communities.

First Witness: Dallas Tonsager

USDA Under Secretary Dallas Tonsager stated that revitalization and development of rural areas was one of USDA’s priorities.  Tonsager noted that USDA programs and investment strive to promote job growth, but administering these programs in rural areas “is a continual challenge.”

“The presence of USDA field offices in every state helps us serve the specific needs of local rural communities.  Our direct personal contact with these communities creates efficiencies in program delivery,” Tonsager stated in his testimony.

Representatives Johnson, Scott (R-GA), McIntyre (D-NC), and Hartzler (R-MO) questioned Tonsager about program duplication with possibilities for coordination.  In response, Tonsager asserted that USDA does not want to diminish access through coordination, but instead add flexibility.  He offered the example of four revolving loan programs that USDA could combine, while still serving a broad audience.

Rep. Costa pressed Tonsager to complete the USDA report defining “rural,” and questioned why federal investment in rural areas was lagging.  Tonsager admitted that rural areas draw fewer resources per capita and stated USDA’s commitment to draw more money to rural areas.

Second Witness: William Shear

GAO Director of Financial Markets and Community Investment William Shear introduced GAO report “Efficiency and Effectiveness of Fragmented Programs Are Unclear” as his testimony.  In the report, GAO investigated 53 of the 80 economic development programs funding entrepreneurial assistance that appeared to overlap, identifying the extent of overlap and availability of performance data.  Of the 53 programs (including 14 at USDA), 45 were found to have reasonable annual performance measures and tend to meet their goals.

Under Rep. Scott and Costa’s questioning, Shear spoke to the frustration of obtaining timely and meaningful data from agencies.  He mentioned that despite variation in data quality, GAO expects to release a recommendation report in July to inform decisions on how agencies and Congress can improve service delivery.  GAO found that there is currently more overlap than duplication; in the streamlining process there is “opportunity to reduce fragmentation.”

NSAC Farm Bill Rural Development Priorities

The Local Farms, Food, and Jobs Act and the Beginning Farmer and Rancher Opportunity Act include provisions to renew funding and expand job access in rural America.  Both bills are aimed at inclusion in the 2012 Farm Bill and have the support of hundreds of farm, food, and rural organizations nationwide.  Their inclusion in the 2012 Farm Bill is pivotal to addressing the concerns raised at today’s hearing.

NSAC supports farm bill funding for the Value-Added Producer Grant program and for the Rural Microentrepreneurial Assistance Program, both major job creators.  In addition, NSAC has proposed a Rural Community Prosperity Fund for the farm bill that would not be a new program, but rather a mechanism from which to make targeted investments in a coordinated manner, using whatever existing program makes sense to improve rural economies.

NSAC is neither for or against rural development program consolidation per se, but believes that any consolidation proposal should meet several tests, including:

• Does it provide for more effective program delivery?
• Does it promote or impede innovation?
• Will it improve the rural development funding situation, which sadly has seen a rapid erosion in federal support for rural business and community development over the past decade, or will it make a bad situation even worse?
• Can new regulations for combined programs be written in a timely fashion and in a way that improves program responsiveness to rural community needs, or will mega-regulations just make things more difficult than they already are?
• And finally, will there be a transition rule that allows existing programs to continue to function for a period of years while new regulations and program implementation procedures are being developed?