Opening Remarks of Thomas C. Dorr
Under Secretary for Rural Development
Before the House Committee on Small Business
September 4, 2003
Attracting Economic Growth in Rural America
Thank you Mr. Chairman and Members of the Committee for inviting me to testify on USDA Rural Development capital investment efforts underway to create economic opportunities in rural America.
Opportunities that I believe give rural Americans greater control over where they will live, work and raise their families as well as allow them to enjoy an improved overall quality of life.
WHAT IS RURAL DEVELOPMENT?
We are a sizable development bank. We have an $86 billion dollar portfolio of loans and we will administer nearly $16 billion in program loans, loan guarantees, and grants through our 3 primary mission areas of Housing Programs, Utilities Programs, and the Business Programs.
We are really a venture capital firm for rural America ... and we have two goals.
We increase economic opportunity by:
It is this type of comprehensive approach of high tech investments and diversification of rural economies that the Federal Reserve Bank of Philadelphia highlighted in its 2002 summer/fall "Cascade" publication as contributing to a one percent increase in employment in rural areas of Pennsylvania, while the state's urban areas employment declined by one percent.
And when you look at the impact such diversified investments are having in Rural America.
We expect in 2003 alone that approximately 350,000 rural jobs will be created or saved through:
The impact of the Bush Administration's capital investments in rural America is tangible.
According to USDA's Economic Research Service, although the U.S. economy is now in recovery, job growth is not what we would wish. For the Nation as a whole, in 2002, unemployment rates increased, employment growth sluggish; however, nonmetro areas fared slightly better in each measurement than metro areas.
In May of this year, the Federal Reserve Bank of Kansas City, through its Center for the Study of Rural America, noted that the rural economy continues to hold steady, with rural jobs growing slightly by 0.7 percent in February compared with a year earlier. It should be noted job growth is increasing at a slightly higher percentage in rural areas compared to job growth in metropolitan areas according to the Bureau of Labor Statistics and I believe this is justification and potential for taking the jobs to the people. No need to take the people to the jobs ... immediately competitive.
A further illustration of this point is a recent FORBES magazine article by publisher Rich Karlgaard who wrote in his monthly column "Digital Rules" a story entitled "Peaks and Valleys". It focused on how the IPO market settled from a 200 plus market in 1990 and 2000 into a market of 20-30 per year after the boom years of the late 1990's, and how high quality talent is less scarce and less likely to relocate to where the limited new markets are located.
The interesting connection to Rural Development is in the second half of his article which focused on Jonathon Weber, the founding editor of "The Industry Standard" - a must read publication in the late 1990s if you were following the IPO market. In a nutshell, when Weber's magazine went out of business in 2001, Weber was worn out, having worked 70-hour weeks, chasing his tale and living in pricey San Francisco. He needed a change and by his own account, needed to lower his cost of living. So he moved his family to his wife's hometown of Missoula, Montana where he lectures part-time at the university and write reports for "Off the Record Research" an independent stock tracker.
The beauty of living in the 21st Century is that Weber and other like him can maintain the competitive edge of writing about international companies and global markets yet reside in a rural town that provides a lower cost of living and an improved quality of life.
My point is that rural America is primed and is bringing new opportunities to agriculture and businesses seeking to reduce overhead yet be competitive in the global marketplace. Opportunities don't have to go overseas, they can come to rural America. We are investing in the technology infrastructure and creating a venue for companies and individuals to look beyond the traditional mindset and geographical limitations to be successful.
And as we look to future capital investments Mr. Chairman, we project that the more than $700 million in program level authority requested for fiscal year 2004 for our business programs will assist in creating or saving about 73,000 jobs and provide financial assistance to more than 2,270 businesses and cooperatives.
The rural economy is heading in the right direct. President Bush's initiatives on tax cuts, business growth, and energy are all vital parts of this equation. We know we cannot relax. There is still much to be done Mr. Chairman. We must be vigilant in our efforts create an economically healthy rural America.
And I look forward to working with this Committee in this effort.
I will be happy to answer any questions you may have at this time.
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