And that’s for the winner.
It’s a nice contest, based on a bright idea, and it addresses a critical need in rural America. But in and of itself, it’s not going to remake too many of the thousands of counties and towns in desperate need of economic development across farm country.
Comparing economies of scale
Contrast that project with a recently announced White House initiative called the Rural Infrastructure Opportunity Fund. This project is also a partnership and also aimed at fostering business start-ups and entrepreneurship in rural areas. But this program is supported by a $10 billion, government-backed commitment from CoBank, a national cooperative bank within the Farm Credit System that provides loans, leases, export financing and other financial services to agribusinesses, rural utilities, affiliated Farm Credit associations and retail customers.
According to the White House news release, the fund, managed by USDA, will reduce the risk for pension funds, endowments, foundations and other institutional investors to invest in rural healthcare and educational facilities, water and wastewater treatment systems, energy projects, broadband expansion and local and regional food processing operations.
Now, there’s no guarantee that the entire sum of $10 billion is going to be sunk into a raft of rural development projects. Even the most altruistic of investors need to have confidence about the ROI of a project before they sign over any serious capital. But even a fraction of that 11-figure total dwarfs the Rural Entrepreneur of the Year award.
Meanwhile USDA Secretary Tom Vilsack announced that the Rural Business Investment Company, which was created just this April, has already raised more than $150 million in investment funds from nine Farm Credit institutions to support small business development across rural America (the AFBF-Georgetown University project is part of that initiative).
Vilsack also noted the launch of a $1.2 billion investment through USDA’s Regional Conservation Partnership Program in aimed at doubling support for natural resource conservation through partner contributions over the next five years.
Currently (FY 2014), the Natural Resources Conservation Service has $400 million in approved USDA allocations to distribute. Quoting from the grant solicitation, the goal is that “NRCS will co-invest in mobilizing creative and workable solutions to agricultural production and resource management challenges [to] benefit not only individual farming, ranching, and forest operations, but also local economies and the communities and resource users in a watershed or other geographic areas that depend on the quality of the natural resources.”