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Third of 2007 Farm Bill Theme Papers Available on Rural Development

Agriculture Secretary Mike Johanns today released a comprehensive analysis of USDA rural development programs compiled by USDA economists. This is the third in a series of subject areas that warranted a thorough examination based on comments received from thousands of producers during last year's Farm Bill Forums.

"Given the degree of interest and near universal praise for our rural development programs, we determined this mission area deserved a thorough examination," Johanns says. "Clearly, rural development programs are popular and deliver real results. As rural America continues to change, we must be sure that our programs also adapt to emerging needs."
The paper describes the current state of rural development, discusses and evaluates current key rural development programs available to communities and individuals and concludes with a discussion of general policy alternatives. The following alternatives do not represent specific farm bill proposals but instead are put forward to further public discussion.

Alternative 1: Maintain the structure and tools of existing programs but refine program targeting. Establishing a system for objective and continuous monitoring of program impacts on rural America would provide information on whether programs are achieving the ultimate goals of economic and quality of life improvements and enable USDA to redesign the administration of programs to more equitably distribute funds and more efficiently meet program objectives.

USDA suggests targeting programs based on

• Critical needs, instead of current perceived needs;
• Net rural development impact for instance in areas where no other funds are possible;
• Market-based programs on self sustainability by directing more assistance into the support of self-sustaining economic development projects; or
• Assistance to increase funds available for socially-based programs.

Alternative 2: Focus on new business formation supported with rural private investment. Under this alternative, USDA would recognize new business formation as the core activity to increase rural economic growth and focus on market-based solutions. USDA would work with State and local governments, regional organizations, and other stakeholders to focus on meeting the needs of rural entrepreneurs. This alternative would also require USDA's Rural Development mission area to continue its effort to simplify the structure and delivery of its programs to enable local staff to assume a larger leadership role in RD mission area activities of their rural communities.

Alternative 3: Move toward greater regionalized funding. Block grants have been considered as a way to redistribute Federal funding as well as to pass some funding decisions from the Federal to the State level. Another restructuring approach which has garnered interest in recent years involves making more use of regional development strategies when awarding Federal grants and loans. Encouraging rural communities to band together to make the most of the local region's assets in pursuing a regional development strategy has several advantages.

The Rural Development paper and previously released analysis papers on risk management and conservation and the environment are available at: www.usda.gov/farmbill. Transcripts of the Farm Bill Forums and the 41 Farm Bill comment summary papers are also posted there.