Johanns Discusses USDA’s 2007 Farm Bill Proposals For Rural Develoment

Agriculture Secretary Mike Johanns today discussed details of several proposed 2007 farm bill changes that will streamline USDA’s Rural Development programs and expand funding for rural health care and community facilities.

“During the Farm Bill Forums, our rural development programs got top grades across the country, but we think we can do even better,” said Johanns. “Our proposals would bolster the efficiency of our rural development programs and infuse funding needed to ensure our Rural Critical Access Hospitals, which are essential to the communities they serve, are able to provide top notch care. Additional funding would go to broader community needs, ranging from water systems to distance learning capabilities in schools.”

USDA is proposing funding to support a $1.6 billion loan program to help rehabilitate as well as update facilities and equipment at Rural Critical Access Hospitals. There are more than 1,200 such hospitals, many of which have pending loan applications. These hospitals are located in exceedingly rural areas where hospital care is desperately needed because of distances between population centers.

To enhance basic rural infrastructure, the administration proposes infusing an additional $500 million to reduce the backlog of applications for rural development water and waste disposal grants and loans, emergency community water assistance grants, community facilities loan and grant programs that assist rural first responders, broadband access loans, and distance learning and telemedicine grants.

The administration also proposes consolidating several rural development legislative authorities to increase flexibility and efficiency. Currently, approximately 45 programs are operated under the rural development umbrella. These programs utilize one of three funding mechanisms, including grants, loans and loan guarantees. Yet, currently two loan guarantee programs provide similar renewable energy assistance, each under unique rules, six grant programs facilitate commercial business development under varying rules and there are two separate program areas designed to assist rural communities in developing infrastructure and community assets.

The Administration proposes grouping statutory authorities to reflect the customers that either directly benefit from the programs or are essential to their operation as follows:

1. Create a Multi-Department Energy Grants Platform. This would start the process of consolidating the renewable energy grant and research programs of USDA into one platform and increase interagency coordination. The first step of this consolidation would be to move USDA Rural Development renewable energy grant and research program authorities into the Biomass Research and Development Act of 2000. This Act has an existing coordinating forum that includes USDA, the Department of Energy (DOE), and other Federal agencies. By moving these programs into this Act, USDA and DOE can more effectively coordinate their research and development activities to better serve the needs of rural America. Key Rural Development programs that would be consolidated under this authority include the Renewable Energy Systems and Energy Efficiency Improvements grant program, with proposed mandatory funding of $500 million over ten years. In addition, mandatory funding for the competitive grant program under the Biomass Research and Development Act of 2000 would be increased to $150 million over ten years.


2. Create a Business Loan and Loan Guarantee Platform. Such a consolidation would make it easier for guaranteed lenders to participate in these programs and eliminate confusion. This proposal would consolidate into the existing Business and Industry authority, the authorities to carry out NADBank, Intermediate Relending Program; Prioritize funding for the construction of biorefinery projects in the Business and Industry loan guarantee program; and consolidate the Section 9006 energy loan and loan guarantee program. Additionally, USDA recommends expanding the 9006 loan guarantee limits for cellulosic ethanol projects to $100 million with additional authority to exempt these cellulosic projects from the cap on guarantee loan fees and investing $210 million to support $2.17 billion in guaranteed loans for the construction of cellulosic ethanol facilities over 10 years.

3. Create a Business Grants Platform. This proposal would consolidate the authorities for the Rural Business Opportunity Grants, Rural Business Enterprise Grants, Value Added Grants, Rural Economic Development Loans and Grants, and the Rural Cooperatives Development Grants programs into one legislative authority. Specialty crops projects would receive priority in the Value-added Grants portion of this platform.

4. Create a Community Programs Platform. This proposal would consolidate the authorities for the water and waste loans, loan guarantees, and grants (including the assorted supplemental authorities such as the Emergency and Imminent Water Assistance Grants), the Community Facilities loan, loan guarantees, and grants, High Cost Energy Grants, Tribal College Grants, Economic Impact Grants, and the Rural Community Development Initiative Grants programs.

The Administration also proposes reauthorizing the Broadband Access Program and the Distance Learning and Telemedicine Program.

The farm bill proposals released January 31 are based on comments and suggestions received from farmers, ranchers and other stakeholders during 52 USDA Farm Bill Forums across the nation and received via mail and the Internet. These proposals represent the final phase of a nearly two year process. To access the full 183 page document or to access the proposals by title go to www.USDA.gov/farmbill .