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April 10, 2017


Farm Bill Primer: Rural Development Title Provisions


Omnibus farm bills are the major modem legislative vehicle
for addressing many rural development issues. While other
legislation has significant implications for rural areas and
rural residents (e.g., transportation initiatives,
environmental regulation, finance and taxation, Medicare,
Social Security), Congress has used periodic farm bills to
address emerging rural issues as well as to reauthorize a
wide range of rural programs administered by the USDA's
rural development mission agencies: Rural Utilities Service,
Rural Business-Cooperative Service, and Rural Housing
Service. While the extent of overlap between federal
agencies and programs targeting rural areas has been of
concern to some rural policy observers, USDA Rural
Development has primary federal responsibility for rural
development and has the largest number of programs
providing assistance to rural areas.

Since 1973, omnibus farm bills have included a rural
development title. How to create and support new
competitive advantage in rural areas so these areas can
better compete in a global economic environment is a key
issue framing current debates about the future of rural
America. While the search for new sources of rural
economic development is part of the policy equation, also
increasingly appreciated is the need to develop new
approaches for federal assistance to rural areas that go
beyond the largely piecemeal programming that has long
characterized rural economic development policy.

The rural development title of farm bills generally provides
assistance for rural business creation and expansion and
rural infrastructure along with traditional assistance for
housing, electrical generation and transmission, broadband,
water and wastewater, and economic and institutional
capacity in local communities. In the past several farm bills,
policymakers have also supported innovative and
alternative business development (e.g., bioenergy, value-
added production, local food production) and innovative
mechanisms to finance it (e.g., the Rural Microentrepreneur
Assistance Program). Support for such alternative
approaches is expected to continue as policymakers
recognize the great diversity among rural communities,
with some rural areas growing and prospering and others
falling further behind as their primary industries (including
agriculture) decline and population outmigration continues,
particularly among younger, better educated residents.


The 2002 farm bill (P.L. 107-171, Section 6020) amended
the Consolidated Farm and Rural Development Act of
1972(the ConAct; 7 U.S.C. 1926 et seq.) to define rural and
rural area as any area other than a city or town with a
population of more than 50,000 and the urbanized area


contiguous and adjacent to such a city or town. Eligibility
for some programs have statutory population limits much
less than 50,000 (e.g., Water and Waste Water loans and
grants-10,000; Community Facilities-20,000). In
awarding loans and grants, regulations may also prioritize
rural areas with even smaller populations and/or household
income limits.

The rural development title of the 2014 farm bill generally
reauthorized or amended long-standing programs under the
ConAct and the Rural Electrification Act of 1936 (7 U.S.C.
901 et seq.). New programs are also authorized under these
statutes. A listing of selected programs is provided in the
text box.
Concerns about how effectively USDA targets its rural
development loan and grant assistance have been a
recurring consideration for policymakers and rural
development practitioners. The general concern is that rural
development funding may not be targeted as well or as
effectively as it could be. The 2014 farm bill directed
USDA to begin collecting data regarding economic
activities created through its rural development grants and
loans and to measure the short- and long-term viability of
award recipients. It also directed USDA to report to
Congress every two years on rural employment generation,
new business start-ups, and any increased local revenue.
     Selected Rural Development (Title VI)
   Provisions in the 2014 Farm Bill (P.L. 1 13-
                          79)
  Rural Business Development Grants. Combines two
  former progams the Rural Business Enterprise Grant
  progam and the Rural Business Opportunity Grant program
  (§6015).
  Business and Industry Loan Guarantees. Provides loans
  and loan guarantees. Includes a provision for locally or
  regionally produced agricultural food products that travel less
  than 400 miles between production and marketing (§6014).
  Rural Energy Savings. Provides loans to utility districts and
  Rural Utility Service borrowers to assist rural households and
  small businesses in implementing durable, cost-effective energy
  efficiency measures (§6205).
  Rural Gigabit Network Pilot. Supports bringing ultra-high-
  speed broadband to rural areas. (§6 105).
  Essential Community Facilities Technical Assistance
  and Training. Provides public entities and nonprofit
  corporations the technical assistance and training necessary to
  prepare reports and surveys needed to request financial
  assistance under the Community Facilities loan and gant
  program (§6006)


The 2014 farm bill authorized a new Strategic Economic
and Community Development initiative to support


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