Rural America on cusp of historic opportunity

Energy production and the attractions of rural life are going to have a major impact on rural America, says Tom Dorr, USDA Under Secretary for Rural Development.

“It has taken the U.S. 25 years to get past the research and development curve on alternative energies,” he said at the recent Ag Media Summit at Milwaukee.

But all those efforts are now beginning to pay off, and as petroleum prices head for the stratosphere, new energy forms are more feasible and more practical, he said.

“The cost per gallon basis for ethanol is now 2.5 times less than in 1980. Biodiesel, too, is going to be a significant player in the energy spectrum. These technologies have evolved to the point that they are economically viable, and in my view the alternate energy industry is one with great growth potential.”

More than 2 billion bushels of corn are now being used by U.S. ethanol plants, he noted, with more production facilities coming on line each year, and use of soybean oil for biodiesel is also increasing significantly.

Environmental and air pollution concerns also favor broad adaptation of cleaner burning bio-based fuels, Dorr said.

Other technologies such as wind, solar, and biomass can help to supplement the nation's growing energy needs, he noted. “It's just going to take time and effort for them to evolve and mature, and we're going to have to reach out and pull in the entrepreneurial talents to make it happen.”

There are opportunities, he said, for “groups of farmers to work together” to establish wind and solar power installations, as well as biomass facilities.

While “unrelenting cost pressures and increasing foreign competition” are making traditional crop operations more difficult to sustain economically, Dorr said there is “enormous upside potential in rural America for emerging growth sectors” such as bio-agriculture and Internet/broadband-based businesses. “These are opportunities not just for agricultural producers, but for all of rural America.”

With the advent of the Internet and almost instantaneous worldwide communication, Dorr said, more people can live and work where they choose, rather than being tied to urban areas.

“This is truly a historic opportunity to revitalize rural America,” he said, “and it calls for a new paradigm of rural policy.”

One of the great opportunities is the sense of place and the desire of many urban dwellers to get away from the cities to a more relaxed, less-cramped lifestyle. But in doing so, he said, they want good schools, modern communications, etc.

USDA's rural development programs are investing heavily in programs to aid rural revitalization, Dorr said.

“We are the venture capital bank for rural America. We have a $90 billion portfolio, with $54 billion invested in water, wastewater treatment facilities, electric power systems, telecommunications infrastructure, housing, community facilities, and business development in just the last four years. We've created or saved over 1 million jobs in rural America since (the Bush) administration came into office.”

Investments have averaged $12 billion to $13 billion per year, Dorr said, a 40 percent increase from the $9 billion average for the years 1998-2000.

“More than 190,000 rural families have been assisted with single family home loans, and home ownership in rural America is now 76.1 percent, compared to 69.2 percent in metropolitan areas. We've invested more than $12 billion in multi-family housing for more than 530,000 rural residents.”

Renewable energy programs total more than $190 million, including $80 million in value-added and business ventures, and $114 million for renewable electric utility upgrades and expansions.

Value-added market development grants of more than $115 million have been made, including $99.6 million for value-added agricultural product market development grants to 572 recipients. These included $16 million in proposals to develop and market bioenergy in 22 states, $10 million to support Agricultural Innovation Centers, and $5 million for Resource Centers.

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