The House and Senate are sitting down this week on Capitol Hill to begin negotiations on the 2018 Farm Bill. Typically renewed every five years, the Farm Bill is an omnibus affair, packaging policy that goes well beyond helping farms survive and thrive. The 2014 bill authorized roughly 500 billion dollars of spending for things related to agriculture, yes, but also to the nation’s food assistance for poor people (SNAP), natural resource conservation – and the often overlooked rural economic development programs.
Even though the Rural Development Title (VI) accounts for less than 1 percent of the Farm Bill’s proposed outlays, we know first-hand that rural America relies on this funding. It may seem small in comparison to the entire bill, but it has a mighty impact on American communities: It helps grow and maintain rural development ecosystems.
For example, the Rural Microentrepreneur Assistance Program (RMAP) offers technical assistance and capital that is the “right size” for rural entrepreneurs: flexible, low-interest loans and grants to support business creation in small towns and rural areas. Some other critical Rural Development programs in Title VI include:
- Business and Industry Loan Guarantees (B&I): a fund that increases access to private credit by guaranteeing loans made by rural lenders.
- Intermediary Relending Program (IRP): a revolving loan fund providing low-interest loans to qualified rural intermediaries who then re-lend that money to small rural businesses.
- Rural Business Development Grants (RBDG): a competitive grant program that provides technical assistance to rural businesses with fewer than 50 employees – a type of business that is critical to job creation and retention in rural communities.
- Rural Business Investment Program (RBIP): a program that licenses new venture capital organizations to serve rural areas.
- Rural Economic Development Loan and Grant (REDLG): a revolving loan fund that enables local utility providers to act as an intermediary for projects that create or retain rural jobs.
USDA Rural Development programs invest in rural people, entrepreneurial ideas and local markets by targeting federal funding to leverage productive investment in rural areas through qualified regional intermediaries. Indeed, community banks, utility co-ops, economic development agencies, community action agencies, community development financial institutions and even some community foundations use these programs to fight poverty and foster entrepreneurship across regional economies. But unlike many other parts of the Farm Bill, Rural Development programs are not generally backed by mandatory funding, so they are tenuous to begin with. And now both the House and Senate bills end mandatory funding for some of the few Rural Development that did carry guaranteed funding in the 2014 Farm Bill.
Another part of the Farm Bill critical to rural and urban families and economies is the Supplemental Nutrition Assistance Program (SNAP, commonly called food stamps). Contrary to the conventional misconception that SNAP is primarily important to urban America, it is poor rural communities that benefit more per-capita from the program. The Annie E. Casey foundation’s Kids Count project estimates that each year, over $29 billion of SNAP funding goes to feeding both urban and rural children. Since a larger percentage of children live in poverty in rural places than in urban, rural children are most at risk from any SNAP reductions.
Even so, the current House version of the Farm Bill both reduces SNAP benefits and adds a requirement that parents must work to receive SNAP. This will generate significant negative ramifications in rural places for two reasons. First, in some rural places, good jobs that provide family-sufficient income are scarce – without local jobs, there will be no way to meet the work requirement.
Second, even in the many rural places where jobs are available and going unfilled, it is often because quality childcare is unavailable or prohibitively expensive. In fact, the cost of child care alone can equal or exceed a rural parent’s income; some simply can’t afford to both work and pay for child care for at the same time. Instituting a SNAP work requirement for rural families in these situations will likely drive them into deeper poverty.
In short, the existing SNAP benefits supplement family income in rural areas where parents have little access to full-time jobs that pay enough to support a family. Moreover, a family’s SNAP spending helps create jobs and support local businesses. In fact, 80 percent of authorized SNAP retailers are small, local businesses like groceries, dairies, butchers, markets or farm stands – and in 2017 alone, SNAP supported an estimated 567,000 jobs. In many rural areas with inadequate access to larger food stores and quality jobs, SNAP makes the difference for hungry families.
Continued prosperity in America relies on healthy and innovative rural economies. Targeted and reliable federal investment is essential to the enduring productivity of America’s rural economies and families. The way forward is to authorize a bipartisan Farm Bill that advances the creativity, productivity and wherewithal of farmers, entrepreneurs and small businesses – as well as the parents they employ and the children growing up in rural communities across America.
Clifford Deaton is Program Associate at the Aspen Institute Community Strategies Group. Joe Short is Vice President of the Northern Forest Center and a member of the Rural Development Innovation Group, a set of 15 expert rural development practitioners and intermediaries convened by the Northern Forest Center, the US Endowment for Forestry and Communities, and the Aspen Institute Community Strategies Group.