Rural America Is Back in Business
President Obama took office during one of the worst economic recessions in our history. Challenges in the housing market had led to vast economic hardship and uncertainty for American families and communities across the country. During this time, widespread job losses coupled with an increasing shift to a technologically focused economy left many rural communities reeling. As a result, many families in rural America were faced with the difficult decision of migrating from the communities they called home in search of a brighter future, or waiting patiently for change to come.
By the media headlines we’ve seen, you could easily think rural America is a thing of the past. “The Graying of Rural America” … “Can Rural America Be Saved” … “Rural America Is Falling Behind” … The truth is, the facts reflect something very different: A rural America on the road to recovery and growth.
Nearly eight years later, rural America has made a remarkable comeback. After years of stagnation following the harsh economic climate that took hold during the Great Recession, we’re beginning to see positive trends in major indicators of economic recovery and we need to recognize it, celebrate it and make sure that progress continues.
For the first time since the start of the Recession, rural populations have stabilized.
The total number of people living in rural counties remained essentially unchanged between July 2014 and July 2015, following several years of rural net migration that began with the housing-market crisis. This improvement in population change coincides with rural economic recovery and, if current trends continue, we will begin to see gradual population growth in rural and small-town America in the coming years.
The rural unemployment rate dropped below 6 percent for the first time since 2007.
After reaching nearly 10 percent in 2010, rural unemployment has fallen to under 6 percent in 2015. Rural counties added over 125,000 jobs in both 2014 and 2015, after job losses averaging 200,000 per year during 2008–2013.
From 2012–2014, rural child poverty fell by 3 percentage points.
Rural child poverty, which had been trending upward from 2003 to 2012, has since begun a slow but steady decline. From 2012 to 2014, average incomes for families with children climbed 6 percent, nearly regaining their 2003 levels in rural areas. This income growth reduced child poverty considerably and demonstrates a very strong growth trend.
Two million fewer people live in a state of food insecurity today compared with a recession peak in 2011.
Food security for households with children, and households overall, is the strongest it’s been since before the Recession and we hope to have more good news to support this later in the month. That means more American families have reliable access to a sufficient quantity of affordable, nutritious food on a daily basis. SNAP participation is also down by 4 million people since it peaked in FY 2013.
These numbers still echo some lingering economic impact left in the wake of a deep recession, but since those early days, we’ve seen important trend lines shift to demonstrate positive change, and the austere outlook that once faced rural America shows growing signs of promise.
So how did we get here?
For nearly eight years, the Obama Administration, spearheaded by USDA, has vigorously invested in the rural way of life; working to help more families make possible the dream of finding a safe and affordable place to live; building schools, libraries, hospitals and public spaces; facilitating the 21st century basic infrastructure of broadband; and jumpstarting the rural economy by infusing communities with the tools they need to innovate, thrive, stay competitive and draw in a more talented rural labor force for a wider array of businesses.
We’ve also driven policy and investment around building a sustainable economic future for our nation’s rural communities, outlining four key pillars that contribute to a modern rural American economy and rallying our partners to help draw investment from the private and foundational sectors to build these new markets and new opportunities from the bottom up.
All the while, the President’s White House Rural Council, which he created in 2011 and I’ve chaired since day one, has continued to foster collaboration to help rural communities reach their potential. The Council has expanded on the concept of regional economic solutions, serving as an incubator for public-private partnerships that match areas with unique rural challenges with interagency initiatives and funding to promote economic prosperity. We understand that the success of our rural strategy requires bringing everyone along — and that is the center of USDA’s approach. Through the Rural Council, we’ve built on our engagement across federal agencies with regional leaders, including small businesses and state, local and tribal governments while breaking down silos across the government to better coordinate, streamline and leverage federal-wide program efforts in rural America. We’ve worked to develop a new, smarter, more collaborative approach to how the federal government engages with local communities. We’ve put citizens, community groups and local leaders at the center of our efforts. We’ve streamlined and targeted federal resources to get folks the support they need. And we’re using data to learn from our efforts and share what works.
A good example of this cross-cutting federal-wide economic policy can be seen in the Rural Jobs Accelerator. This White House Rural Council initiative allows multiple agencies to coordinate technical assistance and grant/loan programs so that a consortium of public and private rural entities can have a single access point within the federal government, creating improved access, streamlining of programs and better leveraging of resources. As of March of this year, this initiative had already created 1,318 regional partnerships, assisted 2,481 businesses, leveraged $114 million in private investments and created or saved approximately 4,899 jobs.
Time and time again we’ve seen that an investment in rural America is a good bet. And because of the hard work of everyday Americans and steadfast support from President Obama and his entire Administration, our rural communities are leading the way in our economy’s transition into the 21st century.
Boosting Critical Infrastructure
A month after stepping into office, President Obama signed an unprecedented federal response to dire economic circumstances. The American Recovery and Reinvestment Act (ARRA) of 2009 marked the beginning of a turning point in the Great Recession. And while it was necessary to jumpstart an economy on the brink of collapse, this forward-looking law served as a strategic investment for the future of rural communities. It revitalized critical infrastructure where it was desperately needed to host a new 21st century job market and put Americans back to work. The result has been the longest period of private sector job growth in our nation’s history.
Since 2009, USDA has helped build on our existing financing of high-speed internet service to rural Americans with a total of more than $6.9 billion in loans and grants for more than 1,200 projects expanding broadband service in rural areas. ARRA investments of nearly $3 billion alone will improve broadband access for nearly 6 million people who live and work in rural America. Through our ARRA investments alone, USDA enabled access to new or improved high-speed internet service for six million Americans who live and work in rural areas. These investments have given rural businesses the connectivity required to compete in the global economy and have opened the doors to state-of-the-art health care, educational and cultural resources.
We’ve also been able to improve and modernize a rural electric infrastructure serving more than 5.5 million rural residents and businesses by funding more than 185,000 miles of electric line. At the same time, we invested in smart grid technology and air quality improvement technologies to improve electric system operations and reduce electric utility emissions. And today, 19 million rural residents now have improved water and wastewater services in their communities thanks to USDA investments.
Homeownership has always been the foundation of the American dream. Not only does it provide families with a place to call home, it’s also one of the best ways American families can build wealth. Over the course of this Administration, we’ve proudly helped more than 1.2 million families buy, repair or refinance a home in rural America, helping promote more stable rural communities. In fact, these past seven years of the Obama Administration have created more homeownership opportunities than any other previous seven-year period in USDA’s single-family housing program’s history.
Community facilities are important too. In rural towns in particular, they often serve as the fulcrum of the community, essential to attracting and retaining high impact businesses and young families. Since 2009, we’ve invested in more than 8,350 critical community facilities projects: schools, libraries, health care facilities, recreational centers and public safety facilities that help ensure even remote areas enjoy all the same basic services and quality of life enjoyed by those in urban areas.
Through our groundbreaking Rural Opportunity Investment Initiative, USDA is spurring interest from the private sector to help propel growth across rural America. A new, USDA-licensed $154.5 million Rural Business Investment Company (RBIC) is making private equity investments in innovative agriculture-related businesses that support our strategy for economic growth, including bio-manufacturing, next-generation energy production, local and regional food systems, advanced farming technologies and other cutting-edge fields. Since its inception in 2014, the fund has made a total of 11 investments, totaling $39 million. An additional three funds have been conditionally licensed since 2015 and three more are currently under review.
In 2014, USDA launched a public-private partnership with Capitol Peak Asset Management and CoBank, a national cooperative bank and member of the Farm Credit System. Designed to facilitate the flow of capital to infrastructure projects in rural America, the U.S. Rural Infrastructure Opportunity Fund included a commitment by CoBank to use up to $10 billion of its balance sheet capacity to lend and co-lend in support of fund-related projects. Since the fund’s inception, CoBank has lent more than $3 billion to over 400 financings of projects in the power, water, communications and community facilities industries.
A New Model for Rural Economic Development
In the last 30 years, agriculture has undergone a change, marked by innovation, diversification and new market opportunities that together, are yielding vast economic gains. The potential of rural America is limitless, and since 2009, USDA under the Obama Administration has made targeted strategic investments to help a sustainable rural economy grow. But as agricultural practices are modernized to create greater efficiencies, our nation requires fewer and fewer farmers and laborers working the land.
The question then becomes: How do we build a new, 21st century economy in rural America to complement the production of food, fiber and fuel? Our answer is a plan I call the Four Pillars — a simple, four-part strategy for growth.
1. Production Agriculture:
We have seen extraordinary gains in productivity in American agriculture in the past 60 years. A growing body of technology and research available to American farmers and ranchers has meant both our crops and our livestock are being raised with more precision and greater productivity, making our farms and our farmers more efficient every year.
To compliment this rapid progress on the farm, USDA has expanded access to credit for more farmers and ranchers while strengthening the safety net to ensure American farmers can keep doing what they do best year in and year out. This expansion, coupled with our continued focus on research and development, and broadening overseas markets, has both fueled exponential growth for the most productive agriculture sector in the world and helped yield the strongest seven years for American agricultural exports in the history of our country, totaling $911.4 billion. Overall, farm income over the last five-year period reflects the highest average five-year period on record.
2. The Biobased Economy:
We have provided robust support for clean next-generation renewable fuels and biobased technologies that pump $369 billion into the U.S. economy each year and support 4 million job opportunities for rural Americans. Everything from plastics and packaging, to cross-laminated timber for residential and commercial building, to textiles are part of today’s biobased economy, benefitting farmers, ranchers, producers and working families in America’s rural communities. Since 2009, we’ve promoted domestic production and use of advanced biofuels by investing in research, supporting farmers who grow bioenergy feedstocks and support hundreds of bioenergy and renewable energy projects nationwide.
USDA’s BioPreferred program, which harnesses consumer demand for products that are good for them, the environment and our economy, has continued to grow by leaps and bounds, with an online catalog of more than 15,000 products, of which 2,700 have been certified to carry the USDA Biobased Product label.
3. Local and Regional Food Systems:
To help drive economic growth, and keep up with a demand that some experts anticipate will be valued at $20 billion by 2019, USDA has invested heavily in local and regional food infrastructure in rural communities. From the smallest on-farm projects like high tunnels, to large-scale investments like food hubs, we’ve invested over $1 billion in more than 40,000 projects since the start of this Administration. Today, more than 160,000 farmers and ranchers nationwide are selling into local markets, generating huge returns for local communities.
4. Conservation and Natural Resources:
America’s 193 million acres of public forests and grasslands supply the drinking water for 60 million Americans, support approximately 200,000 full and part time jobs and contribute over $13 billion to local communities each year. At the same time, new conservation markets are enhancing the value of our nation’s farmlands, while also supporting conservation practices, improving farmers’ bottom line and ensuring a cleaner planet for our next generation.
Since 2009, USDA has invested more than $29 billion to help producers make conservation improvements, working with as many as 500,000 farmers and ranchers each year to implement conservation practices on a total of 400 million acres of farm, ranch and forestland. Since 2009, nearly 400 Conservation Innovation Grants have been awarded to support innovative conservation approaches and technologies that develop new ways to attract private investment in natural resource conservation and help farmers and ranchers make their operations more resilient to climate change.
And, our Regional Conservation Partnership Program brings a radically different approach to investing in natural resource conservation and empowers local communities to work with multiple partners, farmers and ranchers to design and invest in high-impact regional solutions that work best for them. With participating partners investing along with USDA, a $1.2 billion investment in RCPP over the next five years can leverage an additional $1.2 billion from partners for a total of $2.4 billion for innovative conservation work.
Focusing on Persistently Poor Counties in Rural America
As President Obama has said, “A child’s course in life should be determined not by the ZIP code she’s born in, but by the strength of her work ethic and the scope of her dreams.” In too many rural places, a ZIP code can equate to decreased access to critical services, fewer educational opportunities and limited job choices. In fact, nearly 85 percent of America’s persistent poverty counties are in rural areas and in many places, these high rates of poverty have persisted for generations.
Many rural communities, and low-income rural communities in particular, face a distinct set of intersectional issues that mean that despite unprecedented USDA investments to address the unique needs of rural and Tribal areas and drive upward mobility, access to critical services in rural America often lags behind in comparison to urban and suburban areas, particularly in educational attainment, health outcomes and income.
Over time, we’ve seen that the structural shifts that are beginning to take hold in rural communities have not benefited all rural Americans equally. Today, 6.2 million rural Americans are still living in poverty — that number includes 1.5 million of our children. On the bright side, poverty in non-metro areas has fallen more sharply — at the more than twice the rate than poverty in metro areas — demonstrating a continuing recovery.
USDA has worked with local stakeholders to turn the tide with the StrikeForce for Rural Growth and Opportunity initiative that we launched in 2010 to target our country’s most remote and impoverished regions, some of them underserved for decades. We identified pockets of generational poverty using census tract data and proactively partnered with people in these communities to ensure they had access to USDA’s broad array of economic programs. Through StrikeForce, USDA has ushered in nearly $23.5 billion in investments in high poverty areas through intensive outreach and strong partnerships with community organizations, businesses, foundations and universities.
In his 2013 State of the Union Address, President Obama announced the launch of a government-wide initiative to target federal and private resources to high-poverty urban, rural and tribal communities. Through the Promise Zone Initiative, USDA, the Department of Housing and Urban Development and 18 other federal agencies are collaborating with community leaders to provide tailored assistance based on the specific needs of a community. The initiative promotes collaboration between private businesses, federal, state and local officials, faith-based and non-profit organizations and the communities themselves to help break down barriers so that some of the country’s most vulnerable areas can access support available for proven tools to create jobs and improve the quality of life.
In early 2014, Choctaw Nation of Oklahoma was the very first Tribal Promise Zone selected. Comprised of 11 counties, Choctaw Nation is one of the oldest tribal communities in the United States, yet it suffers from poverty rates of nearly 52% in some areas. Working as a united community and with the support of the Promise Zone initiative, Choctaw Nation and its local partners have secured close to $100 million in federal investments. They have opened a new Community Center, a Food Distribution Center and a Head Start program for their community. They have also started a far-reaching effort to promote sustainable agriculture and food sovereignty.
Today, USDA serves as the lead for supporting eight rural and Tribal Promise Zones, and has delivered over $410 million of federal investments to the Choctaw Nation, Pine Ridge Indian Reservation, Southeastern Kentucky and South Carolina Low Country in just two years.
In 2015, the White House Rural Council also launched Rural IMPACT, a cross-agency effort led by HHS and USDA built on the simple notion that every child, no matter where he or she is born, should have an opportunity to succeed. Rural IMPACT takes a two-generation approach to combating poverty and increasing upward mobility in rural and Tribal communities, focusing on engaging entire families in programs and services from early childhood education and healthcare to postsecondary education and workforce development. This program was met so much enthusiasm from partners that funding was recently extended for an additional year.
A New Era of Healthcare for Rural Americans
When it comes to health care, rural Americans have historically contended with limited issuer options and lower provider access. When the recession made times particularly tough, the choice too often came down to paying higher premiums and out-of-pocket costs or skipping needed care. Many rural families didn’t have access to affordable health insurance through an employer because they were self-employed as farmers, ranchers or business owners and entrepreneurs. The average rural family paid nearly 50% of all health costs out of pocket.
On March 23, 2010, President Obama signed the historic Affordable Care Act (ACA) into law helping to build a better quality of life for rural communities by lowering health care costs, guaranteeing more choices to families and enhancing quality and access to care for all. Since the ACA’s passage, we’ve seen the national uninsured rate decline to 9.1%, the lowest it has been on record. Major provisions of the law allow young adults to stay on a parent’s plan until age 26, covering an estimated 2.3 million people after it took effect in late 2010. Thanks to provisions that created insurance Marketplaces and facilitated Medicaid expansions, today, rural individuals have seen large coverage gains under the ACA — about an 8 percentage point increase from before the first open enrollment period through early 2015.
We’ve also seen improved access to care since the ACA took effect. Among rural individuals, the share without access to a personal physician dropped 3.4 percentage points and the share unable to afford needed care dropped by nearly 6.
One fifth of America’s population lives in rural communities, but just ten percent of doctors practice there. The ACA is addressing this challenge by expanding resources for community health centers, where 11.4 million rural Americans get access to primary and preventive care.
It also expands the size of the National Health Service Corps, which offers scholarships and loan repayment to health practitioners in return for practicing in rural communities and other underserved areas. Thanks to ACA, more than 3,000 Corps members now serve in rural areas, and an average of 87 percent of them will remain in their communities even after completing their service, keeping a steady stream of young, motivated doctors and nurses in rural America.
All this comes on top of the more than $3 billion USDA has invested since 2009 to strengthen health infrastructure in rural areas, building rural hospitals and health clinics and expanding access to health care in remote rural areas through telemedicine.
Addressing the Opioid Epidemic in Rural America
In January 2016, President Obama asked me to lead an interagency federal effort focused on the rural heroin and prescription opioid crisis. The President understands what I understand — that rural America, where rates of overdose and opioid misuse are particularly high, has unique needs that require a unique response.
For me this issue is a personal one. Growing up I watched my mother struggle with alcohol and prescription drug addiction. It took me many years to recognize that what she needed in order to overcome her addiction — which she ultimately did, becoming an inspiration to me and many others in our family — was not judgment, but support, love and help. And that’s exactly the approach we’ve taken at the federal level.
In traveling the country this past year and speaking with countless families facing this gripping epidemic, I know now I am far from alone in my experience. According to a recent Kaiser Family Foundation report, 44% of Americans personally know someone who has been addicted to prescription painkillers. In 2014 alone, we lost 28,648 lives too soon and according to NIH, the epidemic incurs $72 billion in health costs each year.
As Chair of the White House Rural Council, I’ve worked with my colleagues across the Administration to aggressively examine the tools at our disposal to stem the tide. Our strategy focuses on maximizing the reach of the resources we have available to focus on prevention, treatment, recovery and criminal justice reform. It means staying nimble with our programs and continuously reassessing our effectiveness to ensure we’re able to respond to challenges as they occur.
At USDA, we’re using our Community Facilities program to develop or improve more mental health facilities that can address addiction in rural areas. In 2014 and 2015, we provided more than $213 million to 80 projects in 34 states, already more than quadrupling the commitment we made in 2013 to provide up to $50 million in funds for mental health facilities by the end of 2016.
We’ve also announced the availability of $1.4 million through the Rural Health and Safety Education (RHSE) grant program. This year, the focus of these grants is being expanded to include extension work that addresses substance use disorders.
And, since 2009, USDA has invested in more than 8,283 educational and health care facilities through our Distance Learning and Telemedicine grants in rural areas nationwide. Many of these telemedicine projects now include components that provide mental health and substance use disorder treatment allowing patients at remote, rural clinics to receive specialized treatment via video communications systems with health professionals at larger and better equipped regional medical centers.
Since 2009, USDA’s partnership with America’s rural communities has supported the emergence of a more vibrant, diverse rural economy led by makers, creators and innovators. Under the leadership of President Obama, USDA has made significant and transformative investments across the nation. These investments have empowered rural America to continue leading the way, strengthening America’s economy, small towns and rural communities that so many call home.
Header photo: Volunteers and employees of the Milford Housing Development Corporation finish raising a wall of the Mutual Self-Help Housing Program’s 50,000th home in Bridgeville, DE.