USDA announces funds for rural areas

FARIBAULT, Minn. — The top official for USDA Rural Development was in Minnesota on Sept. 15 in the midst of announcements that funds will be coming to rural areas. 

Under Secretary Dallas Tonsager gave the keynote address at the National Rural Electric Cooperative Association's regional meeting in Minneapolis. He also conducted a White House Business Council Roundtable at SAGE Electrochomics in Faribault. 

His message at the NRECA meeting was that rural electric cooperatives are doing a great job and he asked for more of them to get involved with developing their communities. USDA Rural Development helps finance the nation's 1,000 rural electric cooperatives. 

On the same day as Tonsager's visit, Agriculture Secretary Tom Vilsack announced that 27 electric cooperative utilities across the country will receive $603 million in loans. The money, from USDA Rural Development, will be used to create jobs and upgrade, expand, maintain and replace rural America's electric infrastructure.

In Minnesota, the announcement brings $18 million to three rural electric cooperatives. Recipients are Freeborn-Mower Cooperative Services, $3 million; Renville-Sibley Cooperative Power Association, $8.6 million; and North Star Electric Cooperative, Inc., $6.1 million.


The money will serve 618 rural customers with 231 miles of new or improved distribution lines. It also brings to the state a $1.3 million investment in smart grid projects, such as advanced metering systems.

During the White House Business Council Roundtable, approximately 20 business owners and community leaders from southeastern Minnesota spoke with Tonsager. The Obama administration's cabinet and sub-cabinet members have been conducting a series of these meetings, which are closed to reporters, across the country. 

In Faribault, Tonsager heard business leaders are challenged with finding the skill sets they need when they're looking to hire. They want education, particularly for manufacturing jobs, he said. Some voiced concern about the decline in U.S. manufacturing. They also want to ensure they have markets for their products. 

"They were giving us ideas about how we could possibly change policy or suggest changes in law," Tonsager said. 

A day before the roundtable, USDA Rural Development State Director Colleen Landkamer announced three organizations in Minnesota would receive more than $1.3 million to support job creation and business development.

The Northeast Entrepreneur Fund in Duluth received a $750,000 loan while the Waseca Development Authority got a $500,000 loan. The groups will provide loans at a low interest rate to public and non-profit organizations in their areas that will re-lend the money for business and community development. The Plainview Economic Development Authority was awarded a $79,000 grant to help pay for business development and a business support center. 

These awards were part of a national announcement that 69 projects will receive more than $15.5 million. 

USDA Rural Development programs improve housing, infrastructure, community facilities, businesses and job creation in rural areas.


"We're involved in practically every aspect of economic development or community development in rural America and we strongly believe that leads to the creation of hundreds of thousands of jobs every year," Tonsager said.

Last year, the agency spent about $37 billion, mostly in loans or loan guarantees, in rural communities. Its investment in Minnesota has been approximately $3 billion since 2009.

Its budget is approved by Congress so Tonsager expects the agency will be reduced in size as legislators look for ways to cut spending. If that happens, the agency will try to maintain its level of service, he said.

Tonsager noted they haven't seen an increase in loan delinquencies since the economic downturn. It has $160 billion worth of outstanding loans, many involving low-income people, with a loan delinquency rate of less than two percent. He thinks that speaks to the character of rural residents. 

"I think rural people pay their bills," he said.

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