Rural America and Small Entrepreneurship Key to Successful Economic Stimulus Package
Small enterprise has a critical role to play in prompting economic recovery in America and ensuring that rural communities share in it. So when Congress takes up the proposed economic recovery legislation after the election, it should reverse its traditional bias against small entrepreneurship and instead embrace it.
Beginning farmers and ranchers and value-added enterprises bring new vitality to rural America. And microenterprises – owner-operated nonfarm businesses that provide self employment and perhaps hire a few employees – create most of the new jobs in many rural communities. It’s time for federal policy to recognize reality and invest in what works to create genuine opportunity for rural people and a future in their communities. We propose three provisions to prompt economic recovery.
1) Provide a direct incentive for rural enterprise by establishing a 20 percent Microenterprise and Beginning Farmer Investment Tax Credit for up to $50,000 of investment. That would provide a direct cash infusion of up to $10,000 to prompt small business expansion and new farm and business startups. The credit would lead to a refund of prior years’ taxes if the business owes no current taxes. That is critical to providing stimulus because many businesses and farms show no taxable income in their startup years and during recessions. The credit would apply to all new business investments, not just the major capital investments favored by past investment credits.
2) Increase funding for the Rural Microentrepreneurs Program, created by the farm bill to fund loans, training and technical assistance for rural small business. The program is a valuable resource for rural America, but woefully underfunded at just $4 million for the entire nation. That’s just 1/200,000 of the $700 billion being injected in big banks to solve the nation’s financial crisis. Increasing the program to $25 million would pay long-term dividends in rural revitalization and national economic strength.
3) Increase funding for the Value Added Producer Grants Program, which makes grants to family-size farmers and ranchers to launch new ventures to process agricultural commodities, market high value crops and livestock, and establish local markets. An added $24 million would fully fund the program at the $40 million authorized by the farm bill.
These modest investments would make a good start toward reversing the bias against small rural enterprise in economic policy. They would provide not only immediate economic stimulus to rural America, but plant the seeds of long-term rural revitalization through entrepreneurship. Congress should embrace these provisions as it develops legislation to prompt economic recovery in America.
Agree or disagree? Send your comments to Chuck Hassebrook, chuckh@cfra.org or 402.687.2103 x 1018.
Beginning farmers and ranchers and value-added enterprises bring new vitality to rural America. And microenterprises – owner-operated nonfarm businesses that provide self employment and perhaps hire a few employees – create most of the new jobs in many rural communities. It’s time for federal policy to recognize reality and invest in what works to create genuine opportunity for rural people and a future in their communities. We propose three provisions to prompt economic recovery.
1) Provide a direct incentive for rural enterprise by establishing a 20 percent Microenterprise and Beginning Farmer Investment Tax Credit for up to $50,000 of investment. That would provide a direct cash infusion of up to $10,000 to prompt small business expansion and new farm and business startups. The credit would lead to a refund of prior years’ taxes if the business owes no current taxes. That is critical to providing stimulus because many businesses and farms show no taxable income in their startup years and during recessions. The credit would apply to all new business investments, not just the major capital investments favored by past investment credits.
2) Increase funding for the Rural Microentrepreneurs Program, created by the farm bill to fund loans, training and technical assistance for rural small business. The program is a valuable resource for rural America, but woefully underfunded at just $4 million for the entire nation. That’s just 1/200,000 of the $700 billion being injected in big banks to solve the nation’s financial crisis. Increasing the program to $25 million would pay long-term dividends in rural revitalization and national economic strength.
3) Increase funding for the Value Added Producer Grants Program, which makes grants to family-size farmers and ranchers to launch new ventures to process agricultural commodities, market high value crops and livestock, and establish local markets. An added $24 million would fully fund the program at the $40 million authorized by the farm bill.
These modest investments would make a good start toward reversing the bias against small rural enterprise in economic policy. They would provide not only immediate economic stimulus to rural America, but plant the seeds of long-term rural revitalization through entrepreneurship. Congress should embrace these provisions as it develops legislation to prompt economic recovery in America.
Agree or disagree? Send your comments to Chuck Hassebrook, chuckh@cfra.org or 402.687.2103 x 1018.
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