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Blueprints for Rural Progress: Critical Need for Federal Development Funding

June 17, 2013 By Lee Egerstrom, Economic Development Fellow

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Take away USDA Rural Development dollars and you start taking away small town assets, such as nursing homes, hospital expansions, access to affordable housing, wastewater infrastructure, and business development. Minnesota 2020’s latest report, Blueprints for Rural Progress highlights the importance of these community development programs in sustaining a strong rural way of life.

Congress is currently rewriting the farm bill, which includes rural development funding, in a climate of sequester-induced, across-the-board federal budget cuts. Depending on how deep Rural Development cuts are in the next farm bill, Minnesota communities will have a tougher time financing these programs.

Potential cuts come after a decade of already dwindling USDA Rural Development resources. Annual appropriation slashes and sequester have reduced Minnesota development staff by one-third (32 percent) from FY 2003 to FY 2013.



Minnesota’s annual federal development dollars fluctuate greatly, depending on state needs, funding availability, and a number of other factors. Here’s some perspective, however. The state receives in the neighborhood of $630 million to $760 million in annual grants and loans, according to Minnesota’s USDA Rural Development office. Dollars typically fund the state’s smallest communities, most of which lack the tax base and population to afford infrastructure upgrades and development projects on their own. Funds cover programs in seven categories: business assistance, energy, housing, community facilities, water and sewer, utilities, and community/regional development.

These dollars aren’t handouts, but investments in rural communities that return dividends in the form of business growth, expanded access to health services, and population stability.

Blueprints for Rural Progress makes the following policy recommendations:

  • Policymakers should consider the value USDA Rural Development programs produce for rural economies when evaluating farm bill funding.
  • Rural communities should prepare for cuts and work with congressional officials to reduce their impact.
  • State policymakers must prepare to counteract looming federal cuts by increasing capital bonding in the 2014 legislative session, with particular attention to Greater Minnesota projects.

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  • fred says:

    June 17, 2013 at 8:05 am

    what can we do to help?

  • Pam Ellison says:

    June 17, 2013 at 11:42 am

    I am a recent transplant from the Metro area to a West Central rural town.  Not only have I been able to secure ongoing appropriate employment in the region, it is now very disconcerting to see that perhaps the rural USDA funds will dry up as a result of a poor economy the past four years as well as poor decisions made by lawmakers in Washington to allow the sequestration go through without so much as a finger lifted in a very partisan congress to lighten the blow by proactively choosing which cuts would hurt the general public in rural areas the least. There seems to be a lack of concern to actually get the job done in Washington and living in a town that just went through a recent, much needed water project with great results, this could not have been undertaken without the special federal funding to do so.  Our water pipes had been patched only since the early 20th century prior and the water quality was poor at best and the water pressure was quite low.  Had we not gone ahead as a city and had this done, this past year, with great results, I might add, we may never had cleaned up our water problems.  There are hundreds of other rural localities that will need to do the same.  How can we continue down the road of giving “big business” a free ride and continue to expect that the small townspeople of our state can take on the extra. We are farming communities, but many people work in the business sectors that are drying up due to the inability to attract businesses to smaller communities.

    I would hope that our representative government would begin to “represent us” the little people out here that are trying to lead productive and lives by trying to start more economic development initiatives.  It all takes investment.  Why are large businesses unable to set up their call centers in the rural areas of our state and other states instead of sending those jobs overseas?  There are many people that would be thrilled to get a call center job or work from their homes and take calls from business customers….

    With the USDA money at risk it will just become more difficult for the rural communities to thrive and it will continue to mean more sparse populations due to the need to flock to the larger cities in Minnesota to become gainfully employed.

    Commuting 80 miles a day at today’s gas prices makes it difficult for people to stay in a rural town and contribute to the local economy.  When will we start getting smart and bring jobs to the people instead of expecting the people to move to the jobs.  We will continue to lose our local tax base as more people leave.

    We cannot lose the infrastructure of Nursing Homes, Hospitals and affordable housing because of the inability of our government to find a way to divide the pie in an equitable way.  As I see it, Corporate America has the whole pie, and seems quite content to keep it that way.

    And no one appears to be stopping them.

    Concerned and dismayed

    Pam Ellison

  • Frank H. says:

    June 17, 2013 at 4:30 pm

    Though 20+ pages long, that report seemed just about right to bring me/us up-to-date on some of the needs of rural Minnesotans and their communities. I grew-up in a small town in S. Michigan; but have lived my adult life in cities where most folks are clueless as to often-grim fiscal realities faced by small communities. Thanks to MN2020 for providing this “Blueprints..” primer to help remind us of funding priorities which should help ALL residents of our state.

  • Bernice Vetsch says:

    June 18, 2013 at 8:03 pm

    From what I’ve read, the Congress (perhaps just the House?) is cutting programs that provide the benefits of investment that you describe while padding the crop insurance programs that funnel kabillions into large agribusiness companies.
    Being exceedingly well-insured, these companies then become more likely to, for instance, plant corn year after year until the soil is depleted and a crop fails instead of rotating crops to preserve the land. 

    Apt quotation from Ronald Reagan:  “Politics is supposed to be the second-oldest profession I have come to realize that it bears a very close resemblance to the first.”

  • Pam Ellison says:

    June 18, 2013 at 11:19 pm

    I also agree with you Bernice.  I am quite familiar with the sell out of the family farm to Monsanto and other mega corporations. Our legislators are now on the payroll of these companies and we are not “we the people” but “we the corporation”. Our government has sold our souls to the Corporate Giants and now they do what they want.  Ralph Nader had it right we are being governed by a Corporate Oligarchy. So we must find ways for our small communities to continue to survive on our own, as much as I don’t like it, it appears to be the reality of the situation. It is very disturbing if we cannot keep some of the funding for our small towns.  Yes, Fred, we need balance all over the state, but it goes without saying that the lion share of the pie will go to the more heavily populated areas…

    So unless we can entice entrepreneurs from the metro areas to come and provide their services in our smaller communities we will be hard-pressed to see job creation and the economic turnarounds that will keep us strong into the future. I appreciate all of the comments.

  • Dan Conner says:

    June 21, 2013 at 9:45 am

    There is no arguement from me about the need for rural development.  More development money spent there would help rural areas grow.  However, another political fact is that rural areas are the bastion of conservatism.  They want no money spent by government, particularly urban areas.  I think the destructive conservative mindset has to be broken before rural spending become viable.  Rural areas need to realize that infrastructure spending is necessary for future viability.  Otherwise, they just waste away.