2007 Farm Bill Resource Center

News and Updates:

February 2006--NADO Past President Outlines Association's Rural Development Vision for 2007 Farm Bill

Vernon R. Kelley, Past President of the National Association of Development Organizations (NADO) and Executive Director of the Three Rivers Planning and Development District (MS) testified today before the Senate Agriculture Committee on the community and economic development challenges and opportunities facing small town and rural America. (View the full NADO statement.)

The committee, led by Chairman Tom Harkin (D-IA), is holding a series of hearings to explore issues related to the reauthorization of the 2002 Farm Bill, which is set to expire on September 30, 2007.

NADO Past President Randy Kelley outlined three pressing rural development policy issues. He also expressed NADO's general support of the concept and goals of the Rural Strategic Investment Program (RSIP), a new regional community and economic development program created in the 2002 Farm Bill but never implemented by Congress and the administration. The major points of Kelley's testimony included:

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January 31, 2006--USDA Releases 2007 Farm Bill Proposals

On January 31, Agriculture Secretary Mike Johanns unveiled the administration's 2007 farm bill proposal. According to the administration, the $87 billion proposal will save $10 billion over the 2002 law and contains 65 different policy initiatives covering commodity price supports, energy, conservation, credit, trade and rural development.

Within the Rural Development Title, the administration is proposing four modest initiatives designed to streamline and increase funding for rural health care facilities, rural infrastructure and other rural community programs. Overall, the administration's plan would add $585 million in new budget authority for rural development programs over the next ten years.

Rural Critical Access Hospital Needs: The administration proposes to complete the reconstruction and rehabilitation of all 1,283 certified Rural Critical Access Hospitals within the five years covered by the farm bill. This proposal would invest $85 million in new budget authority to support $1.6 billion in guaranteed loans and $5 million for grants. The funding, according to USDA talking points, would be used to supplement funding from USDA's Community Facilities direct and guaranteed loans.

Enhancing Rural Infrastructure: The administration is proposing a one-time infusion of $500 million in mandatory funding to reduce the backlog of USDA Rural Development infrastructure requests, including water and waste disposal grants and direct loans, emergency community water assistance grants, Community Facilities loan and grant programs that assist first responders, broadband access loans, and distance learning and telemedicine grants. Additionally, the administration is proposing the reauthorization of the Broadband Access Program and the Distance Learning and Telemedicine Program.

As part of the 2002 farm bill, Congress allocated $361 million in mandatory funding to address the backlog of water and waste disposal loan and grant applications. According to USDA, the backlog for applications is currently more than $2 billion.

Streamlining and Consolidating Rural Development Programs: The administration is proposing to consolidate the legislative authorities for certain rural development programs. It was unclear from the USDA briefing the specific details of this section of the proposal, including how the existing programs would function under the new program platforms. According to the administration's briefing report, several existing programs would be arranged into four platforms:

  • Multi-Department Energy Grants Platform: Plan is to consolidate the renewable energy grant and research programs of USDA into one platform and increase interagency coordination, including with US Department of Energy.
  • Business Loan and Loan Guarantees Platform: Consolidate into one platform the existing Business and Industry (B&I) authority, the authorities to carry out the North American Development Bank (NADBank) and the Intermediate Relending Program. Under the proposal, the new platform would prioritize funding for the construction of biorefinery projects in the Business and Industry loan guarantee program. It would also consolidate the Section 9006 energy loan and loan guarantee program into the existing Business and Industry authority and expand 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. It would invest $210 million to support $2.17 billion in guaranteed loans for the construction of cellulosic ethanol facilities over 10 years.
  • Business Grants Platform: Consolidate the authorities for Rural Business Opportunity Grants, Rural Business Enterprise Grants, Value Added Grants, Rural Economic Development Loans and Grants and the Rural Cooperatives Development Grants into one legislative authority. In addition, specialty crops projects would receive priority funding in the Value-added Grants portion of the program. The plan does not project any cost savings from the change.
  • Community Programs Platform: Consolidate the legislative authorities for the following programs into one platform: water and waste loans, loan guarantees, and grants; 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.

With the release of the administration's farm bill proposal, the House and Senate Agriculture Committees will begin in earnest to examine the proposal, explore addition options and conduct a series of hearings. NADO staff have been meeting with members of the committees and other congressional offices in recent months to discuss the association's priorities, including additional funding and modifications to the Rural Strategic Investment Program (RSIP) that was created in the 2002 bill but never implemented; the need to ensure public entities such as regional development organizations are eligible for all USDA Rural Development programs; and the importance of maintaining and enhancing the existing portfolio of USDA Rural Development grant programs. NADO will be releasing more details on its farm bill priorities within the next couple of weeks.

A description of all the administration proposals is available at www.usda.gov.

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