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On October 13, 1994, President Clinton signed into law the Federal Crop Insurance Reform and Department of Agriculture Reorganization Act. This legislation established 7 mission areas within USDA based upon the primary missions of the Department. Rural development is one of those missions. The Act also realigned many of the Department’s programs and reduced the number of USDA agencies.
Three new agencies, the Rural Business-Cooperative Service (RBS), the Rural Housing Service (RHS), and the Rural Utilities Service (RUS), were established. These agencies constitute the Rural Development mission area and support the following USDA Strategic Goals:
1.1 Expand economic and trade opportunities for agricultural producers and other rural residents; and
1.3 Provide effective customer service and efficient program delivery.
Most of the programs delivered by the mission area agencies are not new. The staffs of these agencies have been, and will continue to be, important providers of financial and technical assistance to rural communities. Their efforts in the past have helped millions of rural Americans achieve a higher standard of living and have enabled them to live healthier, more productive, and more enjoyable lives. Much, however, remains to be done. The development of rural America is a difficult and complicated task in the best of circumstances. The mission area is charged with being the lead Federal entity for rural development in an era of dwindling Federal resources and in the face of rapid changes in the global economy. Substantial challenges exist for both rural America and the mission area.
This plan covers fiscal years 1997 through 2002. It shall be reviewed annually and updated every 3 years as required by the Government Performance and Results Act (GPRA).
Extensive internal and external consultation was held in preparation of the strategic plan. All mission area employees were surveyed to obtain their thoughts and comments. Over 50 percent of the employees responded. Rural Development State Directors held 39 listening forums with partners and stakeholders to identify their concerns and obtain their input. Lastly, a National Listening Forum was held to obtain the comments and concerns of national interest groups.
Rural America is diverse and complex. The thousands of communities which make up rural America are at different stages in their adjustment to the forces which impact our national economy. Some communities have adjusted well and are prospering. There are, however, regions of the country, and pockets in every State, where unemployment and poverty are widespread. Between these two extremes are numerous individual communities, throughout the country, with major unmet needs. Until these needs are met, these communities have a very limited ability to attract the job-creating businesses needed for the community to grow and prosper in the future.
There is no single recipe for rural prosperity. There are logical ways to promote development and there is considerable potential. Guiding principles for this development include:
Enhance the connection between rural and urban areas by improving information infrastructure, the dissemination of information, and the ability of rural residents and businesses to use it.
Encourage and assist rural firms to target specialized, niche markets.
Create “artificial scale economies” to counter the high costs of providing government services or doing business in rural areas due to their small-scale, low-density settlement patterns. This can be accomplished through the development of partnerships between communities or businesses to jointly buy services or equipment.
Improve the competitiveness of rural firms by enhancing the core skills of management and labor.
Even though rural communities are very diverse, with each one having its own unique needs, most of them share a common problem - difficulty in obtaining financing for needed improvements. This problem is exacerbated by the limited number of available users to support the repayment of debt, the high cost per user of rural projects due to their small scale, and the lack of expertise in many rural communities in the technical aspects of project development and management. Most small rural communities do not have bond ratings, which makes it nearly impossible for them to obtain private sector financing. Rural residents and businesses encounter similar problems in obtaining financing. Financing for homes or businesses in small rural communities is often very limited due to the small number of interested lenders in the area and the high potential for loss in case of financial failure due to the limited number of people who might be interested in assuming the debt or buying the property securing the debt.
Rural Development programs are designed to meet the diverse needs of rural communities and to help them obtain the financial and technical assistance needed to improve the quality of life in rural America and help individuals and businesses compete in the global marketplace. These programs consist of a variety of loan, loan guarantee, and grant programs, plus technical assistance, in the areas of business and industry; cooperative development; rural housing; community facilities; water and waste disposal; electric power; and telecommunications, including distance learning and telemedicine.
Rural Development loan programs, with an outstanding portfolio of approximately $77.7 billion, are delivered through a National Office for each agency, 47 Rural Development State offices and a network of other field offices. The mission area is supported by a Finance Office and a Centralized Servicing Center in St. Louis, Missouri, which services the direct single-family housing portfolio.
The mission of the Rural Business-Cooperative Service is “to enhance the quality of life for all rural Americans by providing leadership in building competitive businesses and sustainable cooperatives that can prosper in the global marketplace.” RBS accomplishes this mission by investing its financial resources and technical assistance in businesses and cooperatives, and by building partnerships that leverage public, private, and cooperative resources to create jobs and stimulate rural economic activity.
The Rural Housing Service’s mission is “to improve the quality of life in rural America and help build competitive, vibrant rural communities through its community facilities and housing programs.” Two of the key components of a healthy community are decent and affordable housing and the availability of essential community services such as fire protection and health care. RHS has financed over 2 million single-family homes since the inception of its home ownership program. The rural housing programs are an essential part of the President’s National Homeownership Initiative. In the last 20 years, the community facilities program has enabled over 7,000 communities to provide basic community services for their citizens.
The mission of the Rural Utilities Service is “to serve a leading role in improving the quality of life in rural America by administering its electric, telecommunications, and water and waste programs in a service-oriented, forward-looking and financially responsible manner.” RUS programs provide rural residents access to modern, affordable telecommunications, water, waste water disposal, and electric service. These essential infrastructure systems are the foundation for rural Americans to be contributors in the global economy.
The mission area administers the rural portion of the Administration’s Empowerment Zones and Enterprise Communities (EZ/EC) Initiative. Its mission is “to create self-sustaining, long-term economic development in areas of pervasive poverty, unemployment, and general distress, and to demonstrate how distressed communities can achieve self-sufficiency through innovative and comprehensive strategic plans developed and implemented by alliances among private, public, and nonprofit entities.” This program is seen as the first step in rebuilding poverty-stricken communities in rural America. It is designed to empower people and communities to work together to create jobs and opportunities. The Secretary of Agriculture has designated three rural Empowerment Zones and 30 Enterprise Communities.
Also housed in the mission area is the National Rural Development Partnership, a nationwide network of rural development leaders and officials committed to the vitality of rural areas. The network is organized by the National Rural Development Council, 36 State Rural Development Councils, and the National Partnership Office.
As a part of the Departmental reorganization and establishment of the mission area, the administrative management functions and policy analysis functions of the three agencies were consolidated within the mission area. Operations and Management, which is headed by a Deputy Under Secretary, provides administrative support for the entire mission area. Likewise, the Policy and Planning Staff, which is also headed by a Deputy Under Secretary, coordinates policy analysis support for the entire mission area.
Streamlining and technological innovation are driving the need for Rural Development to change its approach to its mission. Reduced resources are requiring an increased focus on leveraging, partnerships and non-monetary assistance for rural communities. This shift will require increased retraining and redeployment of staff.
The legislative authorities for the mission area programs are found in the Consolidated Farm and Rural Development Act, as amended; Title 5 of the Housing Act of 1949, as amended; the Cooperative Marketing Act of 1926, as amended; the Food Security Act of 1985, as amended; and the Rural Electrification Act of 1936, as amended. The mission area is also impacted by other legislation, such as the Federal Agricultural Improvement and Reform Act of 1996 (1996 Farm Bill), the Telecommunications Act of 1996, and the Energy Policy Act of 1992. A basic mandate of most mission area programs is that they are not to compete with private credit, but rather supplement that credit. If the individuals or entities can obtain affordable credit to meet all, or part, of their needed funding from other sources, they are expected to do so. Another legislative mandate, provided in the 1996 Farm Bill, is that priority should be given in the delivery of our programs to the smallest and poorest communities.
The partnerships and coordination with other organizations required for program delivery varies between agencies and by programs within the agencies. Most of the direct financial programs do not require a partner for program delivery but we are seeking to ensure the placement of our funds are coordinated with, and support the delivery of, the funds of other entities. We are, however, seeking to leverage our funds to the maximum extent possible with other lenders. Our guaranteed programs are made through local financial institutions. This coordination occurs at the local level. This plan is the basis for the development of State/Tribal strategic plans required by the 1996 Farm Bill. The Rural Development State Directors are developing these plans with their various public and private partners to support the coordinated delivery of all resources, both financial and technical.
To ensure our programs are delivered efficiently and effectively at our State Offices, and take advantage of opportunities for streamlining, Rural Development will cooperate with the Offices of the Assistant Secretary for Administration and the Chief Information Officer as they implement the Administrative Convergence initiative. This initiative will consolidate the administrative resources and functions (financial management, human resources management, property and contracting, civil rights, and information resource management), both nationally and at the State level, for the Farm and Foreign Agricultural Services and Rural Development mission areas and at all levels for the Natural Resources Conservation Service.
Other Departmental agencies which the mission area works closely with are the Economic Research Service; Farm Service Agency; Natural Resources Conservation Service; Forest Service; Foreign Agricultural Service; Agricultural Marketing Service; Cooperative State Research, Education and Extension Service; and the National Agricultural Statistics Service. Outside of the Department coordination is required with Housing and Urban Development, Economic Development Administration, Environmental Protection Agency, Small Business Administration, the Department of Labor, the Department of Energy, and the Federal Communications Commission. The plans have been shared directly with some of our closest partners and through the plan review process with the other partners.