5. Creating Jobs and Revitalizing the Economy in Rural Areas

The mission of USDA Rural Development is to enhance the ability of rural communities to develop, to grow, and to improve their quality of life by targeting financial and technical resources in areas of greatest need through activities of greatest potential.

By working in partnership with the many public and private organizations involved in rural development, USDA Rural Development is increasing its focus on community development while continuing to fund development projects aimed at creating quality jobs, housing, and services in rural areas.

These facts illustrate the condition of rural America:

• Of the 53 million people who live in rural America, 1 out of 6 live in households with income below the Federal poverty level.
• Some 535 rural counties endure persistent poverty, with more than 20 percent of their residents living below the poverty level.
• The importance of production agriculture as a source of employment is diminishing. In the last 20 years, the number of rural workers employed on farms has been cut in half, and 80 percent of all rural Americans now earn their living from nonfarm sources.

To sustain the economic viability of rural areas, jobs lost due to more efficient farming methods need to be replaced with jobs in new businesses or industries. Utilities and services similar to those found in urban areas must be available to attract and support new businesses. Safe and sanitary housing is a minimum requirement for a family to have a reasonable standard of living.

USDA's Rural Development mission area includes these agencies: The Rural Utilities Service (RUS) addresses rural America's need for such basic services as clean water, sewers, waste disposal, electricity, and telecommunications. The Rural Housing Service (RHS) addresses rural America's need for single-family and multi-family housing for its low-income families, and also helps rural communities build or improve essential community facilities such as health clinics, fire and police stations, schools, and day care centers. The Rural Business-Cooperative Service (RBS) helps meet the need for new economic opportunities in rural America, and helps rural businesses and cooperatives remain viable in a changing economy.

In addition, the Office of Community Development (OCD) administers the rural Empowerment Zones and Enterprise Communities program--a Presidential initiative designed to provide economically depressed rural areas and communities with real opportunities for growth and revitalization.

Accomplishment Highlights

USDA Helps More People Own Their Own Home
The Department provided financing to help 40,000 rural residents buy single-family homes, including the construction of 14,000 homes under the Self-Help Housing program, in which people with low incomes gain “sweat equity” by participating in the construction of their own homes. USDA also financed the building of 7,900 units of multiple-family housing. In total, USDA’s Rural Housing Service invested more than $2.6 billion either as loans, guaranteed loans, or grants in rural housing last year. More than 58,000 jobs were created as a result of housing construction generated by USDA programs.

USDA Loans, Grants Help With New Facilities, Rental Assistance, Business Expansion
USDA helped build new or improved community facilities--such as day care centers, health care clinics, schools, fire stations, and libraries--in 568 rural communities by providing more than $226 million in loans, guaranteed loans, or grants. These facilities serve a rural population of more than 9 million.

The Department provided $540 million in rental assistance to help nearly 40,000 rural, low- income households obtain well-built, safe housing. Half of the rental program beneficiaries were elderly, with an average annual income of less than $7,300.

The Department financed the start-up or expansion of 1,183 rural businesses or cooperatives, creating or preserving more than 53,000 jobs in the process. USDA’s Rural Business- Cooperative Service (RBS) extended about $936 million in the form of loans, guaranteed loans, or grants to rural businesses and cooperatives. USDA also provided technical services to 100 cooperatives.

Loans and Grants Help Ensure Safe Water and Create New Jobs
USDA provided more than $1.3 billion in loans and grants for 1,125 rural water or wastewater projects that serve 8.5 million people, creating 30,000 jobs.

The Department extended more than $824 million in loans and loan guarantees to help 136 rural electric cooperatives construct electric facilities serving rural areas in 32 States. These projects, funded by USDA’s Rural Utilities Service (RUS), provided new service to 151,000 rural families and businesses and created 19,000 new jobs. These funds leveraged an additional $2.1 billion in private investments in electric systems.

Extending Telecommunications Capability
USDA loaned $380 million for 79 rural telecommunications projects that provided improved service to more than 211,000 rural households and businesses, including more than 43,000 new customers. Improvements included installation of new digital switching technology and nearly 50,000 miles of fiber and copper cable. These and other system enhancements are making advanced telecommunications services available to more rural Americans than ever before. These investments created 8,711 new jobs.

USDA Supports Distance Learning and Telemedicine
The Department provided $8.6 million in grants and $1.6 million in loans for distance learning and telemedicine projects that serve more than 1.5 million rural people. In addition, Agriculture Secretary Dan Glickman used $6.5 million from the Fund for Rural America to finance additional distance learning and telemedicine projects.

Fund for Rural America Helps Rural Development
Secretary Glickman announced his FY 1997 priorities for the Administration’s Fund for Rural America, providing $300 million over 3 years for various rural development programs. About $6.5 million will provide rural business grants, while another $6.5 million will fund distance learning or telemedicine projects to serve 175,000 students and allow health care access for 400,000 rural residents. The fund will provide $20 million for single-family housing, part of the Homeownership initiative, and will provide $9.1 million for the Water 2000 initiative to help provide clean water for rural America

USDA Improves Its Home Loan Servicing Operations
The Department automated the system it uses to originate and service $18 billion in home loans held by 565,000 rural Americans. This project will reduce operating costs for USDA’s Rural Housing Service by $250 million over a 5-year period, and by $100 million per year thereafter. By centralizing the loan-servicing system, USDA was able to reduce staff by about 600 positions and to consolidate its network of rural housing offices from over 1,200 to about 800 nationwide.

Cooperative Development
During FY 1997, USDA funded 18 projects with $1.7 million to promote cooperatives and also funded 17 projects targeted at value-added cooperative development. The National Commission on Small Farms recommended increased funding and assistance for cooperative development.

Quality Telecommunications and Telemedicine Service Reaches Southwest Louisiana
Cameron Parish, Louisiana, a very rural and isolated area, is only several feet above sea level and its location on the Gulf Coast leaves it subject to frequent flooding and hurricanes. The 9,000 residents of Cameron Parish’s six communities now have good telecommunications and health care services, thanks to funding from RUS and advanced telecommunications services provided by Cameron Telephone Company. Cameron is using RUS funds to improve its telecommunications services by constructing a redundant fiber-optic ring through its service area. This state-of-the-art equipment assures that in the event of an emergency, telecommunications services will remain uninterrupted by redirecting the transmission through other parts of the network. The improved telecommunications service also provides the first telemedicine hook-up in the entire State. Residents of Cameron Parish can now be treated through “electronic house calls” by medical personnel in Lake Charles and New Orleans who evaluate transmitted CAT scans, radiography, ultrasound, and nuclear images.

Water Loan and Grant Program Helps Mississippians
The Taylor Water Association in Mississippi will upgrade its existing system, extending service to 135 families who now haul water or use shallow, untreated wells that are subject to contamination. This project, which includes a new well and an elevated storage tank, will also benefit 172 existing customers. The current system is overloaded, and many of the distribution lines are leaking due to aging and deteriorating pipe joints. Due to health hazards and low median household income, this project will qualify for the poverty line interest rate and will be funded as part of USDA's Water 2000 initiative. Funding for the $1.445 million project will be provided by a $650,000 USDA Rural Development loan and a $650,000 grant. Additional funding will be provided by the State of Mississippi through a $145,000 Community Development Block Grant.

Rural Water System Replaced in California
The water system in Cache Creek, a small, low-income community in the Mojave Desert in California, has inadequate storage (20,000 gal.) and an inadequate distribution system (undersized metal lines that are severely corroded and leaking profusely); it has been shut down 37 times in the last 4 years to repair leaks. Some of these lines are so shallow they freeze in the winter. In 1997 USDA provided this Water 2000 project with a RUS loan of $34,600 and a grant of $400,000 to replace the water distribution system, add storage capacity, and tie in to the Mojave Public Utility District's existing water main. With the completion of this project, the 96 residents of the community will have a safe, reliable water supply.

New Sanitation System Improves Health in Kotlik, Alaska
Kotlik, Alaska, is an Eskimo village where 97 percent of the 543 residents live on fishing and trapping. It has a sub-arctic climate and no roads into the community (passengers, mail, and cargo arrive by air and by barge during the short summer season). This community uses surface water; 95 percent of the residents haul water by hand and have never had household plumbing. Human waste is collected in 5-gallon "honey buckets" in each home and the city provides the collection service. Negative health effects, such as outbreaks of hepatitis, have resulted from these sanitation facilities and lack of treated water. In 1997, RUS announced a $533,000 Alaska Village Grant that will be matched by a similar $533,000 Alaska Village Safe Water Grant. This project will provide a 4,000-foot utilidor containing a vacuum sewer main and a circulating water main to serve 190 people in 45 homes.

Water 2000
About a million residents of rural America lack safe, clean drinking water in their homes. USDA has been spearheading the Water 2000 initiative to provide this basic resource that most Americans take for granted. RUS conducted a State-by-State needs assessment and determined that 25 million rural residents experience water-related health problems, are forced to haul water, or are under orders to boil water. In the first 2 years of this program, RUS invested more than $580 million in loans and grants to the Nation’s highest priority Water 2000 projects.

Empowerment Zones/Enterprise Communities
During 1997, USDA invested more than $60 million in the Nation’s 3 rural Empowerment Zones and 33 rural Enterprise Communities (areas of persistently high poverty designated for special assistance under a Presidential initiative). This was a historic step in USDA’s effort to eliminate rural poverty. As a result of these efforts, over 7,000 jobs have been created or saved, 1,100 public service facilities have been built or renovated, and more than 700,000 rural citizens are now receiving additional services in rural Empowerment Zones and Enterprise Communities.