Congress is debating the renewal of the 1990 Food, Agriculture, Conservation and Trade Act, better known as the farm bill.
The major issues holding up agreement on the legislation are the level of funding for farm commodity programs, separating payments to farmers from production and declining payments over seven years.
All of the other provisions of the farm bill, including rural development, hinge on resolving the funding issues.
The Senate rural development title reauthorizes all of the current USDA (U.S. Department of Agriculture) programs, but consolidates the funding into three major accounts. One account will be designated for rural utilities (water and sewer and solid waste loans and grants), one for rural housing (home ownership and rental housing loans), and one for rural business and cooperative development (business and industry loans). The Senate approach closely follows the recommendations made early last year by the Administration.
The Senate rural development title provides some flexibility at the state level by allowing the transfer of up to 25 percent of the total funds from one account to another, if such use of the funds would better serve the needs in that state. All programs would continue to be administered by USDA through the state Rural Economic and Community Development (formerly Farmers Home Administration) director.
The director would be required to consult with state and local governments, rural businesses, agriculture and other organizations in developing a state rural development strategic plan based on local area and state development plans.
NACo was successful in getting a provision included in the Senate title which requires evidence of community support on any grant or loan made to a private organization for a project in that community.
This provision should help to alleviate previous problems with such organizations getting grants and loans without the knowledge and input of local governments and proceeding with projects that aren’t coordinated with other local rural development efforts.
House Agriculture Committee Chairman Pat Roberts (R-Kan.) and Subcommittee Chair Wayne Allard (R-Colo.) introduced legislation (H.R. 2590) late last year authorizing rural development block grants to states.
The bill was drafted with considerable input from NACo and other state and local government organizations.
Hearings were held on the legislation, but a committee markup was never held because of strong opposition by the Administration and Democratic committee members. Roberts was concerned that the block grant bill would hurt any chances of bipartisan support for his farm bill.
NACo supported the legislation because it would provide greater flexibility with declining funding for rural development and encourage more state and private funding of rural development projects.
The bill would give state and local governments greater decision-making authority and promote the leveraging of increasingly limited federal funds with state and private support. The bill required local government input on developing funding priorities, selection criteria for assistance and the method for distributing block grant funds.
Another provision would require states to match federal funds annually with a minimum 20 percent state investment in rural development.
Rural development programs were funded at $564 million in the FY96 Agriculture appropriations bill, down almost $154 million, or about 20 percent, from the nearly $766 million appropriated for FY95.
(Prepared by Ralph Tabor, associate legislative director, and Marilyn Grantham, NACo Extension Service fellow.)
This document was produced using an evaluation version of HTML Transit