Small businesses make up the backbone of many rural communities and are a major force in creating jobs. One program within the 2008 Farm Bill that helps start or grow rural businesses is the Rural Business and Industry Loan and Loan Guarantee Program. While not new, this program finances businesses to foster a better economic climate in rural communities.
Changes to this program in the 2008 Farm Bill prioritize certain types of businesses because of the difficulty many rural communities have with food access and availability. Approximately $50 million in loan granting authority will be available in the first half of each fiscal year (October 1-March 30) for businesses that distribute, store, aggregate, and market locally or regionally produced foods. In this program, USDA defines locally or regionally produced food as either within the state in which it was produced or having been transported less than 400 miles.
A special emphasis will be placed on “underserved” areas, or communities that have limited access to affordable, healthy foods in stores and have a high rate of poverty.
To qualify for this loan program, an individual, cooperative, or business must process, distribute, store, and/or market locally and regionally produced foods. There is no minimum for the loan, and the maximum amount USDA guarantees is $25 million for businesses and $40 million for cooperatives. Applications are accepted year round through your state’s USDA rural development office.
While the timing of the carve-out is uncertain and will not begin before 2009, the Rural Business and Industry Loan Program is a great opportunity for grocery stores, meat and vegetable processors, slaughterhouses, and other businesses to get started or expand their work with producers in their area. It can also be used together with other USDA programs, such as the Value-Added Producer Grant Program or the new Rural Microenterprise Assistance Program.
Not only will it help farmers expand their markets and potentially earn a greater percentage of the food dollar, but rural businesses create jobs and keep money circulating within our communities, helping them thrive.
For more information on how to apply, see
http://www.rurdev.usda.gov/rbs/busp/b&i_gar.htm
Contact: Steph Larsen for more information,
stephl@cfra.org or 402.687.2103 x 1014.
Dakota Rural Action has been a close ally of the Center for Rural Affairs since the South Dakota grassroots organization was established. In particular, Dakota Rural Action is a key ally in South Dakota on livestock market reforms, beginning farmer and rancher initiatives and on anti-corporate farming laws. Visit them online today. 
