Rural Development: Three Views

Last week three rural development practitioners testified before the Senate Agriculture Committee about what federal rural development programs have meant for their communities.

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Editor’s Note: Last week three rural development practitioners testified before the Senate Agriculture Committee. The topic was “economic growth for rural America” and the Rural Development portion of the Farm Bill. We thought these three rural residents described three important sides of this story — how people decide to work on their communities; what rural development programs can do; and what is to become of federal rural development efforts. Below are excerpts from their testimony.

1. Joining the Rural Development Cause

Mark Rembert, director of Energize Clinton County, Ohio

I grew up in Wilmington, Ohio, a rural community of 12,000 in southwestern Ohio. Like most young people who grow up in small towns, I left home after graduating from high school and attended college in Philadelphia where I studied economics. 

Like most of my generation, I had no plans to return home. The world changed for me—as it did for so many—in 2008. 

I had decided to put my training in economic development to work in the Peace Corps. As I was preparing for my departure, news from home reached me in Philadelphia. DHL, the region’s largest single source of employment, was ending its operations at the Wilmington Air Park. Realizing that the community where I grew up would be changed forever by this crisis, I decided to return home for the final months before my departure to the Peace Corps to reconnect with the community. 

Not long after my arrival in Wilmington, I was joined by Taylor Stuckert— another Wilmington native — who had been prematurely evacuated from his Peace Corps assignment in Bolivia in the fall of 2008. As we witnessed the economic equivalent of a hurricane hitting our hometown, we talked to people throughout the community and quickly recognized a new energy brewing. 

There was a desire to push for increased involvement and ownership in the redevelopment of our devastated local economy. Something clicked and we realized that we could best serve our country by working in our own community, rather than by working overseas. We decided to stay home and contribute to the redevelopment of our region. 

As Taylor and I set out on our economic development project, our perspective was heavily influenced by the Peace Corps model, which approaches development at the community level and emphasizes the importance of grassroots analysis and action. We believed that a Peace Corps approach in our community could generate solutions that were more immediate, actionable, and sustainable than traditional solutions and would complement ongoing efforts by community leaders to acquire the DHL-owned airpark and leverage it as an asset to attract new employers. 

Locally Planned, Regionally Based

We’ve found the need to localize the planning process to be critical for two reasons.  First, in the processes that we have observed, we have found that the planning process can have value in and of itself. Genuinely engaging citizens in asking questions about their shared future and exploring the realities of their economic and infrastructure situation gives them a stake in the future. A planning process built around creating a sense of ownership, individual responsibility, and commitment to place are critical to insuring that the process has a lasting impact. Such a process can only be achieved at the most local level. 

The Summit Daily
Dr. Flo Raitano
Second, planning should begin at the smallest level possible to ensure that regional plans reflect the diversity of rural regions, even between neighboring counties. What we typically refer to as a region is less a unified concept, and more a network of unique, interconnected community nodes. Regions are strong when each node has both a strong sense of  identity as well as a commitment to the broader region. Therefore, we recommend that a program focused on rural planning take a ground-up approach that allows for the development community level plans that can feed into larger regional plans that explore the interconnections between the diverse nodes. 

Unfortunately, many rural communities lack the resources or the capacity needed to do the planning required to move beyond a purely reactive economic development approach. We encourage Rural Development to explore new ways to assist communities and rural regions in planning. 

These planning processes need not focus on bold changes that would be too difficult and expensive to implement. Instead, they should be focused on helping communities and regions set achievable goals for themselves based on local needs and local resources.

2. What Rural Development Can Mean

Dr. Flo Raitano, former mayor Dillon, Colorado, population 904

Rural Development programs are a key component of economic development in rural America. 

Without the basic infrastructure they provide—clean drinking water; sanitary sewers; high-speed, reliable broadband internet; public safety facilities and equipment; housing and access to local healthcare for workers; and more—industries will relocate or close factories and small businesses will decline and eventually disappear. 

The entrepreneurs and small business owners who are the engines of our economy won’t open new shops or restaurants on Main Street and won’t be able to set up websites to market their products to the world.

For example, in my hometown of Dillon, we needed to develop affordable housing for our tourism industry workers and their families.  At the time, RD (rural development) was known as Farmer’s Home Administration. We were clueless about how to access those programs.  

Thankfully, Dillon was approached by a private developer who knew how to work within that framework and secured funds for a multi-family affordable housing project. Twenty-four years later those homes are still serving a genuine need in our community. Without those funds, it would have been difficult to attract and retain the workers necessary to power one of the region’s largest economic engines. 

While Dillon may have had success in both being discovered by a private developer and in eventually obtaining funding for our project, many rural communities are not so fortunate. Without the help of technical assistance providers like the RCAP network, many small, low-income towns and counties have difficulty accessing RD programs. 

The application process and eligibility requirements for each program are slightly different, and each poses unique challenges. Local leaders are most often volunteers who lack professional staff and the resources to find out what funding sources are available or the requirements for funding eligibility. 

Their first look at the Letter of Conditions on an RD loan can seem overwhelming and discourage worthy applications. With a little help from an experienced hand, however, even communities with no staff and limited planning resources can develop the local leadership capacity to manage needed infrastructure projects. 

For example, Silver Plume, Colorado, small town with a population of 203, just 20 miles from Dillon, once had its water system knocked out by a rockslide. The town had little local capacity to handle the crisis; its staff consisted of just one part-time town clerk. RCAC, the western RCAP, intervened and was able to pull together resources from the State of Colorado and RD to respond to the critical situation within a week. 

After replacing the old, damaged water system, the community now has a modern system that can deliver clean, safe drinking water to its residents. 

3. Rural Development In This Farm Bill

Mathias J. McCauley, director of regional planning and community development for the Northwest Michigan Council of Governments

The mission area of USDA Rural Development is a critical piece to the overall competitiveness of rural regions as we work to foster job growth, regional innovation, and economic prosperity.  

With USDA’s assistance over the decades, rural communities across the nation are now in a better position to pursue regional asset-based and innovation-focused development strategies that are resulting in new job and local wealth retention opportunities.   

However, continued gains are increasingly at-risk due to Rural Development funding cuts in recent years.  In the final FY2012 USDA appropriations bill, the Budget Authority for the USDA Rural Development mission area was cut by nearly $200 million, including reductions of $45.76 million in the Rural Utilities Service, $133.72 million in the Rural Housing Service and $18.59 million in the Rural Business-Cooperative Service.  

Over the past two years, water and waste water grants have been cut $41.61 million, community facility grants are down 44 percent and support for rural microenterprise lending and technical assistance was eliminated this fiscal year (including for previously appropriated program support for intermediary lenders and technical assistance providers.)   

While some of these cuts have been masked by increases in USDA’s direct loan and loan guarantee program levels (especially due to the historically low subsidy level for the community facilities program), the reality remains that the most distressed rural communities will increasingly struggle to make the improvements necessary to remain economically viable.  

In addition, the areas hit hardest by recent budget cuts include the agency’s smaller, more flexible business and community assistance programs, such as Rural Business Enterprise Grants (RBEG), Rural Business Opportunity Grants (RBOG), and the Rural Community Development Initiative (RCDI), as well as the Intermediary Relending Program (IRP).  Combined, these three community and economic development programs have been cut $17.27 million, or 36 percent, over the past two years.  

The program level for IRP, an important access to capital resource for rural businesses and entrepreneurs, is down 47 percent over the same period. 

While we understand this committee is not directly responsible for the annual appropriations for USDA Rural Development, the committee can strengthen the agency’s position by, at a minimum, maintaining the $150 million mandatory funding level of the 2008 Farm Bill and by updating the agency’s policies and program structure.  

Additional funding for Rural Development’s programs would certainly lead to job creation in rural counties.  Therefore, it is essential that we maintain mandatory funding, look to improve existing programs, and ensure program investments are tied to regional and local strategies. 

 

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