Agriculture Policy & Farm Bill Briefing Book
Congressional Research Service

Redistributed as a service of the National Library for the Environment

Rural Development

Tadlock Cowan

Issue

Title VII of the 1996 farm bill, P.L. 104-127, The Federal Agriculture Improvement and Reform Act, concerns rural development. Provisions of that title, along with the other provision of the 1996 bill, will expire in 2002. While other issues related to the new farm bill are likely to dominate congressional concerns, rural development will also receive attention. Issues related to re-authorizing the Rural Community Advancement Fund, the Fund for Rural America, and provisions related to telecommunications and telemedicine are likely be important matters in the 107th Congress.

Background

The rural sector has always played an important role in U.S. prosperity and well-being. Until the 20th century, rural policy was mostly directed toward the distribution of nearly one billion acres of land from the federal government into private ownership. The federal goal was to stimulate population expansion and settlements as rapidly as possible to complement the land grants made to individuals, groups, and corporations. In 1862, the Homestead Act altered the system of fee simple purchase of acreage from the government to a system of free or inexpensive land grants of 160 acres to settlers willing to live on the land for at least five years. The Morrill Act of 1862 attempted to build up the human capital of the frontier societies, as well as the long-established agricultural economies of the East and South.

A reform movement emerged in the early 20th century which sought to speak for rural America and its interests. Taking its name from the Country Life Commission established by President Theodore Roosevelt in 1908, the Country Life movement came to define much of the debate over rural development in the pre-World War I era. Essentially a rural reform movement, the Country Life movement's emphasis on technology and modernization established the direction that rural development policy has taken into the 21th century. Agricultural policy and rural well-being accordingly have often been regarded as inextricably linked.

This relation between rural development and agricultural production, however, is considerably more complex today as the structure of production and changing global markets lessen the role of agriculture in rural economies. In the few remaining agricultural-dependent counties ( 20% or more of labor and proprietor's income from agriculture), policy changes that affect farm commodity payments or credit can still have significant impact on community banks, schools, and other local businesses that depend on farm spending. In most rural areas, however, less than 7% of the workforce is employed in farming; and most household income for most farm families comes from off-farm sources.

Rural development and rural well-being involve a range of Federal agencies including the Departments of Health and Human Services, Transportation, Housing and Urban Development, Interior, Defense, and the Environmental Protection Agency. The Department of Agriculture, however, was designated lead agency for coordinating rural policy and has an Undersecretary of Agriculture for Rural Development to oversee rural policy. Three USDA agencies are responsible for the mission area:

USDA also administers the rural portion of the Empowerment Zones and Enterprise Communities Initiative, the Fund for Rural America, and the National Rural Development Partnership, a nation-wide network of rural development leaders and officials committed to the vitality of rural areas.

Three overarching attributes of virtually all rural areas make the federal policy environment complex:

Sparse populations relative to urban areas make scale economies difficult to achieve and make overcoming distances costly. Job growth in farming and mining-dependent rural counties continues to lag behind service, government, and non-specialized rural counties. Rural areas adjacent to metro-areas, however, achieved job growth nearly equal to that of metro areas in the 1990s even though wages in rural areas were lower than those in metro areas; remote rural areas grew much more slowly. Many agriculture-dependent counties saw population declines and little or no job growth in the 1990s. The great spatial and socioeconomic diversity of rural areas makes a one-size-fits-all rural policy very difficult to achieve.

Policy Issues

In the future, rural policy will be under increasing pressure to encompass a much broader array of policy issues. Key policy issues may include:

Congressional Action

In the 107th Congress, Reps. John Thune, Jo Ann Emerson, and Dennis Rehberg introduced H.R. 1093, The Value-Added Development Act for American Agriculture and H.R. 1094, the Farmers' Value-Added Agricultural Investment Tax Credit Act. The former would provide grants over three years to create Agriculture Innovation Centers to provide technical expertise to help growers form producer-owned value-added operations. The latter bill would enable growers to make investments in value-added enterprises to help growers capture more of the profits generated by the processing of commodities. Similar bills were also introduced in the 106th Congress.

Several bills have also been introduced in the 107th Congress that target broadband and enhanced Internet access for rural communities.

CRS Products

CRS Report RS20011, Managing Regional Growth: Is There a Role for Congress?
CRS Report RL30719, Broadband Access and the Digital Divide: Federal Assistance Programs
CRS Report RL30478(pdf), Federally Supported Water Supply and Wastewater Treatment Programs.

Web Sites

USDA Rural Development: http://www.rurdev.usda.gov
USDA Rural Business-Cooperative Service: http://www.rurdev.usda.gov/rbs/
USDA Rural Utilities Service: http://www.rurdev.usda.gov/rus
USDA Housing Service: http://www.rurdev.usda.gov/rhs
Community Alliance with Family Farmers: http://www.caff.org/
Center for Agricultural and Rural Development: http://www.card.iastate.edu/
Center for the Study of Rural America: http://www.kc.frb.org/RuralCenter/RuralMain.htm
Rural Empowerment Zone and Enterprise Communities Program: http://www.ezec.gov
National Farmers Union: http://www.nfu.org
Rural Policy Research Institute: http://www.rupri.org

Page last updated May 22, 2001.


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