Rural America, home to 15 percent of the U.S. population, “is still feeling the effects of the Great Recession” in the form of slow growth in wages and slow economic growth overall, a Minnesota official told a House Agriculture subcommittee. Rural electric and telecommunications groups, joined by the biotechnology industry, said their industries represent the path to rural growth, with the help of seed money in the 2018 farm bill.
Rural economic development is an important part of USDA’s activities although obscured by better-known and bigger-ticket programs such as crop subsidies and food stamps. The USDA spends $4-5 billion a year on rural utility, housing, business development programs, a small part of annual outlays that exceed $150 billion. Through loans and loan guarantees as well as grants, the effect of the programs is multiplied into a portfolio of $40 billion, the bulk of it in rural housing.
“So much of what rural America will be able to accomplish over the net decade will be tied to how well these programs work,” said Georgia Rep. Austin Scott, who chaired the subcommittee hearing on USDA rural development and energy programs. “These programs support infrastructure construction, encourage capital formation and help to promote economic development across rural America.”
An annual report by the National Association of Counties says “rural America is still feeling the effects of the Great Recession,” said Bob Fox, a member of the Renville, Minn., county board. “Economic growth is also slowing down across rural counties. The overwhelming majority of rural county economies added jobs at a slower pace in 2016 relative to 2015 … Wages in most rural county economies are growing slower than last year.” Fox said a robust rural development title was vital to rural counties for the new farm bill.
Leaders of the National Rural Electric Cooperation Association and NTCA-The Rural Broadband Association said expansion of high-speed internet service throughout rural areas would create a digital highway for growth. “Rural American cannot be competitive without access to high-speed broadband service,” said Dennis Chastain, testifying on behalf of NRECA. “Many comparisons are drawn between the lack of access to robust broadband service today and the need for electrification in rural areas 80 years ago – with urban areas well-served and rural areas being left behind.” Chastain said “all potential providers including electric cooperatives should be eligible for programs designed to bridge the digital divide.”
Craig Cook, of Texas, representing rural telephone cooperatives through NTCA, said USDA financing was important because “access to capital for rural broadband projects is limited. Small rural broadband providers cannot walk into large commercial banks to obtain financing for a network that will serve a small number of people over a large area with the payback measured in decades rather than years.” Aside from USDA, there are few “mission-driven lenders” beyond CoBank and the Rural Telecommunications Finance Cooperative, he said.
Chief executive Jim Greenwood of the Biotechnology Innovation Organization urged expansion of current programs that support biobased products, construction of biomass plants and the “energy crops” that provide biomass feedstock. “The industry is on the cusp of creating a robust biobased economy through U.S. biobased production,” said Greenwood. “This encompasses a value chain from agriculture through manufacture of consumer goods that provides a cost-competitive alternative to petroleum’s value chain and brings environmental, economic and other benefits.”
To read the written statements of witnesses at the hearing and Scott’s opening statement or to watch a video of the hearing, click here.