October 6, 2000

The South Dakota Farmers Union has endorsed a National Cooperative Business Association move to get congressional approval for new equity investment to rural America. The proposed National Rural Cooperative and Business Equity Fund Act would create a new public-private partnership designed to attract equity investment in cooperatives and other businesses in rural areas. Sen. Tom Harkin (D-IA) is sponsoring the bill and plans to introduce it with the goal of having it approved before Congress adjourns later this month.

"Lack of equity funding is one of the most difficult barriers farmers face in starting the new generation, value-added co-ops that can improve their income," said Chuck Groth, communications director for the South Dakota Farmers Union. "Right now, farmers have few places to turn to attract investment in new co-ops, particularly given the income crisis facing rural America. This legislation would change that, and now is the time to do it."

"The proposed Equity Fund is one of the most innovative, and viable solutions to the long standing problem of co-op access to equity," said Paul Hazen, chief executive officer of NCBA. "Resourceful farmers, like the founders of the Dakota Growers Pasta Cooperative, are finding that value-added co-ops can be a solution to increasingly concentrated agricultural markets that return less and less to growers. But growers need equity capital to get these co-ops started."

NCBA is the lead national co-op membership association, based in Washington which brought together a diverse group of interests to develop consensus on and support for the new Equity Fund legislation. The South Dakota Farmers Union represents 13,000 farm, ranch and rural families across the state and has been lobbying Congress for income relief and reform of farm programs.

In a related action, Senate Agriculture Committee Chairman Richard Lugar (R-IN) is co-sponsoring legislation designed to enhance rural development. "At a time when the level of resources available to address the needs of rural America is limited, it is essential that everyone who is concerned about improving the viability of rural communities and enhancing the quality of life of rural citizens work together," Lugar said.

"State rural development council's have been doing an excellent job of empowering rural leaders to develop grass roots solutions to local problems. This legislation will increase the value and effectiveness of these councils' efforts and better coordinate what the federal government does in rural America."

The proposed National Rural Development Partnership (NRDP) Act of 2000, supported by a bipartisan group of senators, would facilitate greater cooperation among federal government agencies that provide programs and services to rural areas by strengthening the rural development partnership and state rural development councils. In addition, the legislation would provide a vehicle for greater cooperation between federal agencies and other levels of government and the private and non-profit sectors in addressing the needs of rural communities.

The National Rural Development Partnership is a nonpartisan interagency working group that facilitates collaboration among federal agencies and among federal agencies and state, local, and tribal governments and the private and non-profit sectors to increase coordination of programs and services to rural areas in order to make the best use of limited rural development funds. Although the Partnership has been in existence for 10 years, it has never been formally authorized by Congress.