Rural development helps more than some realize

This is in response to Ms. Osborn's letter entitled "Farmers are hurting, not rural businesses." (Jan. 8, Page 4-B) She stated that U.S. Secretary of Agriculture Mike Johanns is incorrect in his opinion that conservation, rural development, and renewable energy should be high priorities in the next farm bill. She also stated that the $8.9 million that USDA provided to the area surrounding Gans, Okla., is an example of the "type of rural economic development that is taking over the budget of the USDA."

First of all, I believe as Ms. Osborn does that agriculture is important to our rural economy, not just in Oklahoma, but nationwide; however, the relationship between agriculture and the rural economy has changed. Today, the line between agriculture and rural economics has blurred and our farming and ranching sector desperately need a strong rural economy in order to survive and thrive. The American Farm Bureau released a study in January of 2006 that stated "91 percent of family farm income comes from off farm sources." (AFBF MAPP Report 1/06). These families are still farmers, but they have diversified their revenue streams in order to compensate for rising input costs.

I know several in agriculture are hurting right now, but nationwide, net farm income has seen record highs every year since 2004 (ARS 1/07). Have these record highs been produced through record subsidy payments to producers? No. In fact, in the year 2000, when net farm income was far from impressive, subsidy payments totaled more than $32 million. In 2006, with record farm incomes, subsidy payments totaled around $20 million. The productivity of the American farmer and his or her willingness to embrace a new rural economy is what is saving agriculture, not the size of the subsidy check.

The benefit for USDA in this new rural economy is that the support Rural Development programs provide to support rural communities and the agriculture sector is a wise and frugal investment, because it only relies on a fraction of the overall USDA resources.

The annual budget authority invested by Rural Development was around $2 billion, or 2 percent of the Fiscal Year 2006 total USDA budget of $97.5 billion. Further, for every dollar of funds administered by USDA Rural Development, the cost to the taxpayer is only roughly 13 cents. Where else can you invest 13 cents and get a dollar return on that investment?

Nearly $15 billion was invested in Fiscal Year 2006 in rural development ventures that included programs to support agricultural producers such as the value-added grant program, yet the amount of money to create this level of investment was only $2 billion in USDA budget authority. This minimal cost to the taxpayers exist in large part due to the ability to encourage greater utilization of guarantee loans over more costly direct loan and grant programs.

When you look deeper into how USDA Rural Development dollars are invested, you would find they support the financing of local health care--hospitals, medical clinics, extended care facilities, they support fire trucks, police cars, municipal facilities and the list goes on. All which touch the everyday lives of those who live and work in rural America, including our ranchers and farmers.

It is as much about creating economic opportunities as it is improving the quality of life in rural America. If you ask why use USDA funding for non-agricultural needs? For over 70 years USDA has shown that through its network of professionals and with its local presence in rural America, no Department has a greater ability to collaborate with local communities and residents than USDA. That is why Abraham Lincoln called it the "People's Department" when he created USDA in the late 1800s.

My final point is this, when developing rural business opportunities, whether they are agricultural producers or others, you must have a strong infrastructure. I know that my family's farm would not have lasted very long without a water system and electric lines; but agricultural infrastructure is much more than that today.

To compete in a global economy, rural Oklahoma must be connected to that global economy. The USDA Rural Development Community Connect grant program is designed to help encourage this type of high speed connection service. Our agency awarded a grant of $531,750 in the fall of 2006 to an area around Gans, Okla., to help develop their broadband internet service. They competed against other applicants from all across the nation for part of the $8.9 million available for the program. They were successful because of the resources they were able to leverage and for the plans they were able to put in motion. As an Oklahoman, I am proud of Gans for their initiative and for their vision to tackle this project.

As a high school FFA member, I remember reciting the creed which started, "I believe in the future of agriculture." I still believe in agriculture as I know Secretary Johanns does. But I also know that the future I see today for my industry is much different than the future I saw while in high school. I also believe the opportunities available for agriculture production businesses are more plentiful now than ever before in American history. At USDA Rural Development, we would like to help American producers prepare for these opportunities.

--Brent Kisling, State Director-Oklahoma, USDA Rural Development

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1/29/07

6 Star Midwest Ag

Date: 1/24/07

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