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[imgcontainer] [img:moulton2.jpg] [source]Julie Ardery/Daily Yonder[/source] Rural communities are good at raising money for their own needs. Here, Daniel Beyer holds a stuffed cow that sold for $140 at a church auction in Moulton, Texas, on Sunday. But a change in the definition of “rural” in the Senate Farm Bill to any community under 50,000 people could squeeze out towns such as Moulton and its 1,000 residents. [/imgcontainer]
What does a rural area look like?
The Senate Farm Bill proposes to standardize current definitions of “rural area,” recognizing that varying definitions for different programs have attracted criticism.
Unfortunately, the result of “one definition” for rural area could be less funding for the very areas that many Americans would consider the most proper beneficiaries of these programs. And that problem could worsen under the definitions adopted by the Senate, which has increased the population limits for the areas considered “rural” for many programs.
Currently, the definition of “rural area” varies by rural development program. Rural water programs are allowed to go only to cities, towns, or unincorporated areas of fewer than 10,000 people. The limit for community facility programs (which pay for libraries, health centers, and many other community brick-and-mortar investments) is 20,000, while the limit for business programs is 50,000. If you live in an urbanized area surrounding a town of more than 50,000, then you are not eligible.
The Senate’s version of the Farm Bill gets rid of all the lower population limits, setting a uniform population of 50,000 for determining what constitutes a rural place.
The differing levels have attracted a lot of criticism since many people reasonably believe that we should have a consistent definition of “rural.”
However, just as it would be hard to argue that a rural area located in the oil fields of North Dakota has the same needs as a rural area located just outside an urbanized area in Massachusetts, it is hard to argue that all of these rural programs constructed to meet different rural needs should be bound by the same population limit.
A rural water program arguably is constructed around the notion that small rural areas do not have the critical mass of people needed to provide the tax base and the user fees necessary to upgrade their water systems to meet existing public health standards. With government support through loans and grants, those communities can continue to meet those standards.
By contrast, a rural business program is constructed around the notion that if you provide governmental support for slightly larger areas, those areas will also help provide employment opportunities for nearby rural areas.
Additionally, if you look at just the population limits without looking at the demand for these programs, you ignore a key factor in the workings of these programs.
The rural water program (set at 10,000) routinely receives more applications for its funding than Congress is able to provide. According to testimony provided by the National Rural Water Association in April, at the end of fiscal year 2011, over 400 communities that had made valid applications could not be funded.
Those communities will fall in line for the next year’s funding, but the point is that this is an oversubscribed program and has been for years.
But if this program is oversubscribed now with its limit at 10,000 people, what will be the result when the population limit is raised to 50,000, as the Senate version of the Farm Bill proposes?
A real fear of increasing population limits for these programs is that larger rural communities often have greater institutional capacity to apply for governmental support than smaller communities. By increasing population limits for already oversubscribed programs, you run the risk of squeezing out areas that are more in need of support.
And, as the federal government decreases its funding in rural areas through closing Rural Development offices and reducing staffing there, rural areas will have less technical support available to them to navigate these complex programs.
The response to this concern is likely to be that the Senate bill also contains language that includes a “set-aside” of 50% in one of the rural water funding programs to rural communities with fewer than 3,000 people or a “priority” for areas with fewer than 5,500 people. However, those provisions would not even be necessary were it not for the likely squeezing out those smallest rural areas from greater competition and more applications.
In fact, over 80% of the funding already was for areas of 5,000 or less (again from the National Rural Water Association testimony), so this language means little in practice. There is still the risk that significant amounts of funding will go to communities that might not have been eligible prior to enactment of this bill.
There is still the risk that significant amounts of funding will go to communities that might not have even been eligible prior to enactment of this bill.
Defining rural is tough policy terrain. However, efforts made to “streamline” these programs should not have the effect of making it harder for the communities most in need to qualify and compete.
Aleta Botts is a native of Menifee County, Kentucky. She is a “recovering” policy staffer in Washington, D.C., who is currently Agricultural Policy Outreach Director for the University of Kentucky. She also works with the Kentucky Center for Agriculture and Rural Development to help producers and rural businesses find funding opportunities. Her opinions are her own, not those of the center or the university.