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Federal financial assistance can contribute to the success
of a local rural development strategy. However, the total
amount of Federal funding received by an area may be less
important than the mix of Federal assistance and its fit
with the local rural development strategy.
ERS analysis of Federal funding shows that most of Federal
funding comes in the form of payments to individuals for
social security, retirement, Medicare and Medicaid, farm
payments, federal procurement and salaries, and expenditures
on national defense and other national functions. Moreover,
these programs are not distributed equally across the
country. For example, Social Security provides more funding,
per capita, in the farming-intensive central portions
of the country, due to the concentration of older people
in these rural areas.
Federal programs specifically aimed at economic and
community development are particularly important for
rural development. ERS research finds that rural areas
have historically received somewhat less of such community
resources funding than urban areas. In addition, the
amount of such Federal assistance varies by region (table
1) and type of rural county (table
2). The geographic distribution of Federal funding
also varies by type of assistance, such as loans,
grants, direct payments to individuals, etc. (table
3). ERS research has shown that a shift from one
type of assistance to another may involve various
tradeoffs which can be particularly important to
distressed rural areas (see The
Form of Rural Development Assistance Matters to Distressed
Counties in Amber Waves, and the longer report, Geographic
Targeting Issues in the Delivery of Rural Development
Assistance). The urban/rural distribution of
Federal funds also varies from State to State (See
the ERS State
Fact Sheets). For more information about data
on the geographic distribution of Federal funding
see Federal
Funds Data.
ERS has classified the Federal programs important for
rural development into 4 categories: general assistance,
infrastructure assistance, business assistance, and housing
assistance. While many of these programs are USDA programs,
some of the largest are administered by other agencies,
such as the Department of Housing and Urban Development
(HUD) single family mortgage program and community development
block grants (CDBG), the Small Business Administration
(SBA) small business loan program, the Department of Transportation
(DOT) highway construction program, the Environmental
Protection Agency's clean water and drinking water infrastructure
programs, and the Federal Emergency Management Agency's
disaster relief.
Some of these programs, such as HUD's State/Small City
CDBG, have particularly benefited rural areas, but the
programs that have been most focused on rural development
are administered by USDA. These include infrastructure
programs of the Rural Utilities Service, business programs
of the Rural Business-Cooperative Service, and housing
and community development programs of the Rural Housing
Service. USDA's rural
development theme paper, prepared for discussion leading
up to the 2008 Farm Act, provides a detailed listing of
USDA's rural development programs, as well as a discussion
of several alternative approaches to rural development.
For more information on these programs, see USDA-Rural
Development. The 2008 Farm Act made some significant
changes in rural development programs, which were described
in the ERS
Side by Side analysis of the Farm Act.
ERS has also looked into other aspects of Federal programs
as they relate to rural development, including Federal
credit programs and their role in rural areas. Other
topics include the rural impacts of Federal development
programs (see Economic
Impact of Water/Sewer Facilities in Rural and Urban Communities
and Meeting the Housing
Needs of Rural Residents: Results of the 1998 Survey of
USDA's Single Family Direct Loan Housing Program),
trends in regulatory policy and the recent trend toward
new Federal regional development programs (see Transition
Year Brings Changes for Rural Development), a description
of the rural
development title of the 2008 Farm Act, and policy
issues of continuing relevance, such as the pros and cons
of using block grants for rural development (see How
Would Rural Areas Fare Under Block Grants).
In addition, ERS researchers have written a history
of Federal rural development policy, available from
the Rural Information Center's web site, providing background
information about how and why Federal rural development
programs were created.
See related links
and recommended readings
covering issues on federal funds and development policy.
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