Praise and put-downs for USDA rural programs

By Whitney Forman-Cook

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, April 6, 2016 - The 46 million people living in rural America have access to a long list of USDA programs to help them and their businesses thrive, but are they enough? Witnesses at a Senate Agriculture subcommittee hearing on Wednesday tried to provide some answers.

Lisa Mensah, USDA under secretary for rural development, testified that the department's largest rural development (RD) program by budget is the Rural Housing Service (RHS), which helps low-income rural families purchase, refinance or repair their homes, or rent affordable housing from USDA-financed, multifamily complexes.

Sen. Heidi Heitkamp, D-N.D., who says “affordable and available housing is absolutely critical” to rural America - and lacking - isn't convinced RHS is doing enough.

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“We've done all this wonderful work in creating primary sector (agriculture and other natural resource-based) jobs (in rural America)… but we can't fill them, because people can't find affordable housing where they live,” she said. “We need to take a look at how (USDA) measures qualifications (for rural housing assistance), because the way we're doing it right now, is not meeting the needs.”

Democrat Amy Klobuchar said mayors in her state of Minnesota have been looking for ways to build more senior rental housing near healthcare providers in their towns, but are struggling to finance new housing projects. They're also in need of funding to rehab the rural housing stock those seniors are leaving behind so young families can move in, because in many areas it's not financially possible for municipalities to build sewer lines and other infrastructure to support new homes.

Mensah said that the tools were in place for RD programs to help with both rental housing and rehab of existing homes - and suggested more funding for new hires was necessary to deal with RD's loan portfolio, which has grown to $212 billion.

Since 2009, she said, more than 1.1 million rural families have taken out RD loans or have been granted assistance - totaling $137.5 billion in USDA investments - to buy, refinance or maintain homes. In 2015 alone, RD housing programs helped 141,300 rural homeowners and nearly 11,000 rural families who rent housing.

Craig Hill, president of the Iowa Farm Bureau, testified to the value of USDA start-up assistance programs in rural areas, like the Small Business Innovation Research (SBIR) program.

Hill said that SBIR funding, coupled with funding from the Iowa Farm Bureau's Renew Rural Iowa initiative - which mentors rural business start-ups and helps them secure financing and USDA grants - is what allowed Harrisvaccines Inc. based in Ames, Iowa, to commercialize their synthetic vaccine platforms for swine flu and Porcine Epidemic Diarrhea virus (PEDv).

Hill said USDA could do more to simplify the grant application process for these programs, but generally, the department “has been a great partner for our rural businesses.”

Unrelated to his opinions on USDA, Hill used a question from Sen. Joni Ernst, R-Iowa, about “burdensome regulations” that affect rural residents to criticize the EPA's WOTUS rule.

The rule has been “something that has just stymied and crippled our farmers,” he said. “They don't understand the rules” of what is permissible or what land is under the EPA's jurisdiction, “and there's not an office in Iowa that can answer those” questions.

“To implement and execute on those new rules - definitions that have never been created before by the EPA, that don't stand up to court decisions and what Congress has set out in the Clean Water Act - is just a very, very difficult thing for agriculture to accept,” he added.

Also testifying was Monte Shaw, executive director of the Iowa Renewable Fuels Association, Iowa ethanol producers strongly support the Energy Title in the 2014 farm bill, which was designed to advance biofuels, biomass energy and other renewable energies produced in rural areas.

“The Energy Title programs provide a massive return on investment,” because USDA dollars are matched with private investments, he said.

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However, he said, the bill cut many of these programs from previous levels and “almost every appropriations cycle or omnibus spending bill” makes further cuts.  “I can say with certainty that rural America knows that Congress needs to get its fiscal house in order.”

Cris Somerville, president of Dakota Turbines, a distributed wind manufacturer based in Cooperstown, North Dakota, praised one Energy Title program in particular - USDA's Rural Energy for America Program (REAP).

As a past recipient of REAP grants, Somerville said he was a “big proponent” of the program and said two issues - one related to application scoring and another to environmental review - were going to be corrected by USDA this year. “I can't think of a more responsible use of the taxpayers dollars and I strongly urge continued federal support” for REAP, he said.

“Dakota Turbines literally would not be in existence if it were not for a USDA zero-interest loan that our mother company, Posi Lock Puller, received 20 years ago,” Somerville added. Today, Dakota Turbines has a staff of 12 and “plans for dramatic growth within the next few years” producing turbines to power hog farms.

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