Annual report reflects administration's drive to create opportunity in rural regions
WASHINGTON (USDA)- Agriculture Secretary Tom Vilsack provided highlights of USDA Rural Development fiscal year (FY) 2011 investments in job-creating businesses, infrastructure and housing for Americans living in rural communities across the nation on Jan. 17. According to estimates, Rural Development investments created or saved about 440,000 jobs last year.
"The Obama Administration is focused on putting people back to work and putting money back into the pockets of working Americans," said Vilsack. "At USDA we are partnering with businesses, non-profits, cooperatives, Tribes and local governments to do our part to stimulate economic activity and create an environment that grows jobs in rural communities."
In the federal fiscal year that ended on Sept. 30, Vilsack said Rural Development, through its Business, Cooperative, Utilities and Housing programs, provided housing opportunities for over 143,000 families, upgraded community facilities, boosted the reliability of the electric grid, funded renewable energy projects, and through the Community Connect and other broadband programs supported efforts to provide affordable, reliable Internet service to rural homes.
The largest portion of FY 2011 funding, 63 percent, supported fee-generating loan guarantees that enabled private lenders to safely increase the pool of capital available in rural areas for credit-worthy businesses, communities and homebuyers, without direct cost to the Government. For example, in Indiana, Morris Manufacturing and Sales Corp., a family-owned auto parts maker, used USDA business loan guarantees to restructure debt and expand. As a result, the firm rehired 100 laid-off workers and hired 44 additional workers.
In South Carolina, a Small Socially Disadvantaged Producer Grant enabled SCF Organic Farms, Ltd., to expand its organic farming operation. A loan to the Northern Virginia Electric Cooperative from USDA's Rural Utilities Service will finance a 49 MW wood biomass generation facility. An estimated 300-400 construction workers will be hired, and when completed the plant will employ about 30 full time workers. In Kansas, Hayes-based Rural Telephone is using USDA support to extend broadband service to communities it has served since 1952. Free broadband service will be provided to area libraries.
About 34 percent of Rural Development investments last year were made in the form of secure, affordable direct loans that will be paid back to the government, with interest. Through its Rural Utilities programs Rural Development provided more than 800 direct loans to help small communities install or upgrade water systems, dispose of waste and upgrade landfills to protect environmental quality. USDA also provided technical assistance and training grants to communities to ensure that the newly installed systems are maintained.
For example, the Harrodsburg Water Treatment Plan in Kentucky was upgraded and expanded with funding provided by USDA. As a direct result, a paper mill announced an expansion project in the community that will result in 76 new jobs.
Another 430 direct loans were made through the Community Facilities program to upgrade education facilities, emergency services, and hospitals across the nation. For instance, Rural Development provided a direct loan last year for the construction of a new dental center in Rhinelander, Wisconsin. In addition to creating construction jobs today, the facility will also employ 38 professional and support personnel when the clinic opens its doors to deliver needed care in an underserved area. In Morton Township, Michigan, USDA funds are being used to expand the library, provide community meeting rooms and computer work stations.
Rural Development also provided more than $63 million in direct loans to help local organizations capitalize self-renewing revolving loan funds that last year assisted more than 1,000 small businesses like The Corner Clinic pharmacy in Oklahoma. In total, these relending programs are estimated to have helped local companies create or save nearly 20,000 jobs.
Vilsack noted that grants leveraging significant public and private investments constitute roughly three percent of Rural Development's FY 2011total funding nationwide. This funding was targeted at forming the building blocks of economic development, such as basic infrastructure, renewable energy, technical assistance, education and workforce training efforts. For example, a grant made it possible for a southern Georgia technical college to upgrade training equipment for a commercial truck driver program that places more than 90 percent of graduates into jobs. Another grant in Cedar Key, Florida, financed repairs to keep a commercial boat ramp open for the 36 small businesses and 400-plus workers who depend on the launch to make a living by bringing in about 75 percent of the state's clam harvest.
Last year, Rural Development also provided 2,000 rural businesses, farmers and ranchers with Rural Energy for America grants for up to 25 percent of the cost of energy efficiency and renewable energy projects. Funds were provided for a wide range of technologies to improve energy efficiency in systems ranging from water pumps to maple syrup production. Funds for cost-effective solar and wind projects were also provided, along with support for anaerobic digesters which protect the environment and reduce greenhouse gas emissions while generating electricity. For example, in Idaho, New Energy Two LLC, is collecting manure from nearby farms. The waste is converted into biogas, which fuels production of about 10.5 million kWh of electricity.
Through its Rural Housing Single Family Guarantee Program, Rural Development provided loan guarantees that helped more than 130,000 families secure affordable home financing through private lenders, while helping spur the struggling housing market as well as construction, retail sales and professional services. Through its direct housing loans, Rural Development also helped more than 13,500 lower-income families purchase or repair their homes on affordable terms. Combined, these single family housing programs have not only helped support a struggling housing market, but they have also injected more than $17 billion into local economies.
For example, in Oregon, Casey Griffith, Krysti Layman and their seven-year-old son Noah wanted to find a starter home. Noah is handicapped, and the home needed to be accessible. Working with a local non-profit organization, Griffith and Layman partnered with eight other families to build a total of nine single-family homes, including one that fit their needs and those of their son. By completing 65 percent of the work themselves, they reduced their overall loan costs and secured a USDA direct home loan for the remainder of the balance. "I had to learn a lot," said Layman, "But without this program we wouldn't be homeowners and we wouldn't have a house that is ADA (Americans with Disabilities Act) accessible."
Secretary Vilsack noted that the agency's cost of doing business is less than two cents for every dollar invested in the future of rural communities. Last year, USDA Rural Development continued to streamline service delivery and cut regulations that stifle job creation. The agency is also engaged in ongoing White House Rural Council roundtable meetings with business and community leaders to hear their ideas on how to grow the economy.
USDA, through its Rural Development mission area, administers and manages housing, business and community infrastructure and facility programs through a national network of state and local offices. Rural Development has an active portfolio of more than $155 billion in affordable loans and loan guarantees. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America.