With the economic development landscape rapidly evolving, especially as a result of the Covid-19 pandemic, many rural communities and regions are now facing new and even greater challenges to overcome barriers to growth and prosperity. Despite these significant changes, there is very little focus on how economic development in rural America is shifting, and how federal policy can effectuate change that provides much-needed flexibility and capacity for rural communities.
Every five years, Congress passes the Farm Bill, which drives economic opportunity across the United States. This multi-year law authorizes programs under the U.S. Department of Agriculture (USDA) and has some of the most influential constituent groups across the U.S. policy voicing support for its Agriculture, Nutrition, and Conservation titles. While support for these parts of the Farm Bill is essential for passage, a lesser-known part of the farm bill, Rural Development, is one of the most important and consequential pieces of this legislation.
Rural Development is an agency that provides loan funding and grants for critical infrastructure like broadband and water, rural energy, electricity, and cybersecurity. Essentially, the programs authorized through the Farm Bill for Rural Development provide the fundamental building blocks that drive economic prosperity in rural America.
While the Rural Development (RD) arm of USDA and the entire Farm Bill provides support for rural economic development, there are several key challenges that should be examined to maximize the impact of this legislation:
- Programs funded specifically for economic development are very small and are expected to reach the entire country, and thus, are often over-subscribed and under-funded;
- There is very little recognition that infrastructure and housing are part of the economic development process;
- Each program authorized under Rural Development is siloed, limiting the agency’s ability to think more holistically about the needs of rural communities.
With the upcoming reauthorization of the Farm Bill, we have a tremendous opportunity to move beyond the status quo and reshape policies that will truly help rural and disadvantaged communities. No longer can economic developers operate in a silo, they are increasingly becoming more engaged in conversations in their regions around housing affordability, infrastructure, technology, workforce development, and social drivers like childcare. At the International Economic Development Council (IEDC), we see this every day through our close to 5,000 members across the world.
If we want to drive more equitable economic outcomes here in the United States, and abroad, we need to think differently not just about the practice of economic development, but the policies that drive those opportunities. Those policies need to not just address current needs but look to the future of rural communities and what will drive economic prosperity.
One great example of how current policies could be changed to address current and future needs is to focus on the ability of small communities to apply for federal funding. With unprecedented funding currently available through federal programs, many of the most rural or distressed communities will be left further behind because we have not prioritized building the human and system capacity that would be necessary to access these funds.
Most rural communities have never accessed federal funding due to the complex and difficult application processes. There are virtually no programs that focus on comprehensive programming or funding for rural America, and even if there were, there are no programs to help communities build the capacity that would be necessary to access those programs.
If Congress truly wants to drive economic opportunity, there needs to be a more meaningful and comprehensive approach to economic development. While programs like Agriculture are critical to driving prosperity, the sector only represents six percent of the overall U.S. economy. A focus on small business growth, and the programs needed to support those businesses in a comprehensive way, is critical.
As Congress considers the next Farm Bill, they should also consider ways to make economic development the key driver of Farm Bill programs. This includes driving more opportunity through Rural Development, with key changes to break down silos and build capacity.
Key areas to address include:
- Create and authorize the Rural Investment Initiative. This program, championed by many of Rural Development’s biggest stakeholders, is designed to provide long-term funding directly to communities and strengthen human capital that will allow communities to take a more holistic approach to their economic development needs.
- Five-year grants would be provided directly to communities, creating the sustainability to build capacity and implement economic development efforts that are to this point not available through any domestic federal funding.
- Complementary funding for technical assistance (TA) and capacity building. This TA would be flexible, allowing an integrated approach across RD programs to ensure that communities that need to build capacity have ongoing support that cuts across regional needs.
- Fund the Rural Community Development Initiative (RCDI) program at $100 million and allow for national applications, strengthening one of USDA’s most flexible tools for economic development.
- Create a new Rural Service Corps program. This program would fund fellows in local organizations and governments to develop and implement economic development efforts.
Without big ideas, the Farm Bill will continue to provide funding and programs, but without the force needed to drive economic prosperity throughout Rural America. Economic Development cuts across every piece of the Farm Bill, and USDA programs, but is the most overlooked opportunity to drive more equitable, and sustainable, prosperity.
Nathan Ohle is the president and CEO of the International Economic Development Council (IEDC), a nonprofit, non-partisan membership organization serving economic developers, who typically work for cities, counties, states, public-private partnerships, and chambers of commerce to promote economic well-being, and quality of life for their communities. IEDC has over 4300 members and is the largest organization of its kind.