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HPPR Economy and Enterprise

How are decisions made about projects that benefit rural America?


The U.S. Department of Agriculture first began designating funds for rural development in 1933 as part of the New Deal. More federal funds were allocated in the Agricultural Act of 1970. During this fiscal year, the rural development program is administering approximately $38 billion in loans, loan guarantees and grants. It’s being used to construct or improve 48 rural libraries, assist 243 projects in the delivery of healthcare and help more than 270,000 low income families get affordable housing, according to the USDA.

But how are decisions made about projects that benefit rural America? On a recent visit to Washington, I spoke with Doug O’Brien, acting under secretary for the USDA’s Rural Development program. He explained how the rural development program is implemented and how its funds are dispersed:

"USDA rural development has a somewhat unique delivery system relative to other federal programs … there's no sort of middle entity.

USDA rural development has a somewhat unique delivery system relative to other federal programs. For instance, most of HUD -- the Housing and Urban Development agency -- most of that money goes to some state entity that in turn basically implements the program. Transportation, the vast majority of that money is formula money that goes to the states and then the state transportation department or other entities deliver those moneys. USDA rural development, we work directly with the people in rural America or the community leaders in rural America. So, essentially, there's no sort of middle entity. There’s not a state or local government entity that delivers the program for most of our programs.

O’Brien said that since every state in the country has rural areas, elected officials were also vested in the success of the program.

There isn’t a state in the U.S. that doesn't have some significant component of a rural area.  Even the smaller states in New England have some significant rural places. So, we have good luck working with the states, and partner with them to get some good results from rural America.

O'Brien also responded to some of the criticisms of the rural development program, including, as some have said, that urban centers and suburbs received funding from the program. He said while big cities were not eligible for any rural development program funds, suburbs were more of a grey area:

If you grew up in a town like me of, well, really 112 people and 2 churches and 3 bars, well then ‘rural’ meant something to me differently when I was 18-years-old than somebody who maybe grew up in a bigger place. But at the end of the day, I think it is really important to realize that this division between rural and urban I don’t think is that helpful for rural people. At the end of the day, most of the markets for the products that come from rural America -- whether they be manufactured products, food processing, energy -- those customers are going to be in an urban place.

O’Brien added that Agriculture Secretary Tom Vilsack was quick to remind “our urban brothers and sisters” that their food, their clean water and most of their energy comes from rural America. It’s in everybody's interest for us to work together, to make sure that we have policy that makes the most sense, that grows the economy.”