2008 National Extension Farm Bill Education Conference Title VI: Rural Development

Dr. Mark A. Edelman, Professor of Economics; Extension Economist and Director, Community Vitality Center Iowa State University Airport Hilton Kansas City, Missouri July 9, 2008

1. Supports Marketing Locally Produced Agricultural Products • Locally-produced foods: – Produced within state or – Produced < 300 miles • Priority for Existing Business and Industry Loan and Loan Guarantee Program. – Provides up to $250k loan/loan guarantee to individuals, coops, businesses and other entities to establish and facilitate enterprises that process, distribute, aggregate, store, and market locally produced ag food products • Priority for projects that – serve community development and farm and ranch income and – have components serving underserved communities

1. Supports Marketing Locally Produced Agricultural Products • Underserved Community: Urban or Rural community or Indian tribal community with: – Limited access to affordable health foods in grocery retail stores or famer to consumer markets, or a high incidence of diet-related diseased as compared to national average, including obesity; and – A high rate of hunger or food insecurity or a high poverty rate

2. Reduces Water & Wastewater Loan & Grant Application Backlog • Provides $120 million in mandatory funding for pending qualified applications already processed by USDA for water and waste disposal grants and loans. • Lower interest rates for many water and waster water loans are made permanent.

3. Expands Broadband Service in Rural Areas • Assistance shifted to areas with very limited or no service. • To be eligible for assistance: – No more than 1/4 of population can have existing broad band service, or – Service to the area is provided by no more than one (to three) incumbent broadband suppliers.

4. Creates Rural Microentrepreneur Assistance Program • Loans and grants to Microenterprise Development Organizations (MDOs) to support development the development of rural microenterprises.

– Skills for Startup – Technical assistance for ongoing success – Microcredit access • USDA Rural Microenterprise: – In rural area – less than 10 employees – Less than $50k loan request

4. Creates Rural Microentrepreneur Assistance Program • MDO grants (25% local match) to provide training, operational support, business planning assistance, market development assistance, and other related services (research in developing best practices) to rural microenterprises, with emphasis on: – Low and moderate-income individuals – In areas that have lost population • Secretary ensures diversity of MDO recipients by size and service to racially & ethically diverse populations • Provides $15 million in mandatory funding for MDO Microloan Program – Direct Loans to MDOs for 20 year loans @1% interest with minimum 5% loan loss reserve, and 2 year deferral of repayment.

– MDOs that receive Direct Loans are eligible Technical Assistance Grants for up to 25% of outstanding Microloan balance. Requires 15% local match.

5. Authorizes Regional Planning Authorities • Reauthorizes Northern Great Plains Regional Authority (IA, MN, NE, ND & SD) • Reauthorizes Delta Regional Authority (parts of AL, AR, IL, KY, LA, MS, MO, TN) • Creates Southeast Crescent Regional Commission (parts of VA, NC, SC, GA, AL, MS, FL not already served by Appalachian or Delta Regional Authorities) • Creates Southwest Border Regional Commission (parts of AZ, CA, NM, TX) • Creates Northern Border Regional Commission (parts of Maine, NH, NY, VT)

6. Reauthorizes Rural Business Investment Company (RBIC) Program • Guarantee of Trust Certificates for RBIC and RBIC Investors • Adds eligibility for investment pools created by banks • Depentures may be prepaid without penalty • Distributions may be made to cover tax liability • USDA fees limited to $500 • USDA will not be required to operate program with SBA involvement.

7. Authorizes New Rural Collaborative Investment Program Purpose: to provide rural regions with 1. Flexible investment vehicle with local control & federal oversight assistance & accountability.

2. Incentives to develop and implement comprehensive strategies for achieving regional competitiveness, innovation, and prosperity.

3. Foster multi-sector community and economic development collaborations & capacity long term 4. Foster better use and leverage of USDA resources

7. Authorizes New Rural Collaborative Investment Program • Creates National Rural Investment Board and National Institute on Regional Rural Competitiveness and Entrepreneurship • Develops Strategic Regional Plans for Enhancing Competitiveness and best practices for establishing benchmarks and measuring progress • Develops Rural Philanthropic Initiative to enhance permanent philanthropic resources for rural community and economic development.

• Broad-based Regional Boards (must have local government, nonprofit community development organizations, ag and natural resource industries, Indian tribes, regional development organizations, private business, higher education, workforce and job training organizations, coops, & others) are certified by National Board. • Area has > 25k pop, unless density is less than 2/sq mi. then > 10k pop • Not less than 25% or more than 40% represents govt and Indian tribes, nonprofit community development orgs and higher ed, or private business, coops, ag and natural resource businesses. • Federal or state employees may serve as nonvoting members

7. Authorizes New Rural Collaborative Investment Program • Regional Boards: To promote investment, provide financial and technical assistance, implement approved regional investment strategies, provide annual reports to Secretary and National Board, select nonfederal org as fiscal agent.

• Inventory of assets and resources; Assess competitive advantages of region; Identify goals, challenges, priorities, plans including organizational tasks, local match resources; expected outcomes. • Regional Investment Strategy Development Grant up to $150k with 60% local match • Regional Board may receive up to $6 mil in regional innovation grants to implement strategies after approved during any 5 year period with 50% local match.

8. Expands Farm Labor Housing Program. • Low interest loans or grants for housing construction and improvement for farm labor is expanded to assist low income employees in agricultural processing.

9. Revises Definition of Rural

• Clarifies definition of areas that are not eligible for USDA rural programs in the vicinity of cities with more than 50k pop.

• Secretary may broaden the category of area considered urban to cover areas that have become urban based on housing units per square mile through a rule making process.

For More Information • • • • http://agriculture.senate.gov/ http://agriculture.house.gov/ http://www.usda.gov/ www.cvcia.org