Rural America Deserves Support from Washington

June 4, 2020

The economic disruption that has hit this country as a result of the new coronavirus outbreak (COVID-19) has been felt hard in rural America. The generally older populations of these parts of the country are more vulnerable to poor health care access due to the lack of physical infrastructure or even internet connectivity; this among other factors has increased small-town America’s contribution to the 100,000 deaths and counting attributed to COVID-19 in the United States.

The dire consequences stemming from the ravages of the pandemic in and of themselves warrant the kind of direct help for rural areas that Congress has already offered to businesses and other economically driven entities and institutions.

The $2 trillion CARES Act Congress adopted in late March offered funding for several Small Business Administration (SBA) programs. The Paycheck Protection Program (PPP) distributed more than $349 billion in forgivable loans to small businesses to help them retain their employees. That was followed up with another $310 billion. The Economic Injury Disaster Loan program provided small businesses up to $10,000 in loan advances that also are set up to be forgiven.

Unfortunately, a lack of clear federal guidance has stopped many rural businesses from applying. Also, as a result of decades of bank disinvestment outside of city centers, the banking relationships companies need to take full advantage of the PPP do not always exist in the places they’re needed most.

Acknowledging the issues, the SBA and the Treasury Department announced last week that $10 billion in funding for the Paycheck Protection Program would be set aside and loaned exclusively to the rural, minority and underserved groups assisted by Community Development Financial Institutions (CDFI).

But is all that can be done for rural America in this time of great need actually being done? Are there additional policies and means that can be implemented to allow our nation’s farming and ranching communities to weather today’s economic disruptions – and can this country find a way to restore economic viability in these vulnerable areas?

The 2008 bailout of financial institutions – the Troubled Asset Relief Program (TARP), a $700-billion government program – enabled the nation’s banks to continue operating during an ongoing economic crisis that stemmed, ironically enough, from the initial subprime mortgage crisis prompted by many of those selfsame lending institutions. While not altogether popular, given the origins of the “Great Recession,” the bailout proved successful, allowing most big financial organizations to survive (most repaid their TARP payments and the government got back $21.5 billion more than it loaned out) and enabling the economy to recover well.

Given the contributions that rural America and its farmers, ranchers and forestland owners make to this country, it, too – like financial institutions 12 year ago – must be considered “too big to fail.” America’s farmers and ranchers, who contribute nearly six percent of this nation’s gross domestic product, represent a bulwark in the U.S. economy by ensuring a safe and reliable food supply, improving energy security and supporting job growth and economic development.

Despite mishaps in the food system stemming from the pandemic, U.S. agriculture is expected to recover and continue its preparations to help feed a world population expected to reach nearly 11 billion people by the end of this century. Two key questions are how and who will remain in business after the financial crisis subsides?

Fortunately, opportunities exist to harness the full range of economic, social and environmental solutions that U.S. agriculture can deliver at scale. In 2019, U.S. annual energy consumption from renewable sources – most of which are generated in rural America – exceeded coal consumption for the first time since before 1885, continuing a growth in energy share long promoted by the SfL-sponsored 25x’25 Alliance. By maintaining valuable renewable energy incentives and tax credits, post-pandemic recovery can be accelerated through an influx of new job-training models that can unlock the potential of a rural talent pool and help employers address longstanding skill gaps.

There are multiple other ways the federal government can respond and help. Policy makers can establish a federal payment for ecosystem services program that pays farmers, ranchers and forestland owners for delivered services, such as retained carbon and cleaner water. They can act to align existing risk management programs such as federal crop insurance with the steps needed, including adoption of climate smart practices, that will help farmers adapt to a changing landscape.

Furthermore, the federal government can follow through on its promises by boosting agricultural research, including support for accompanying extension efforts and decision-making tools to help rural innovators use the information in the field; invest in working lands programs like the Conservation Security Program and the Environmental Quality Incentives Program; funding badly needed infrastructure upgrades in our systems of locks and dams, highways and bridges; and ensuring universal broadband internet that enables new technologies and industries while connecting at-risk citizens with critical services.

The value of rural America to this country’s economic wellbeing cannot be underestimated. As Congress contemplates the various steps that need to be taken for a full post-pandemic recovery, our rural communities and the wide agricultural networks they support cannot be ignored. Lawmakers must make a significant investment in those areas and its people for this nation to fully recover.

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An Agricultural Renaissance, led by innovative and entrepreneurial farmers, ranchers and foresters constructing sustainable, profitable and resilient systems that lay the foundation for a world of abundance on many scales capable of producing nutritious food, feed, fiber, clean energy, healthy ecosystems, quality livelihoods, and strong rural economies.