Keep Your Eye on the Money

You can learn a lot about how or why certain decisions are made if you follow the money. For four decades the Center has been doing just that.

Ground-breaking Center for Rural Affairs reports from our early years were—at their core—an analysis of how money and investment trends were affecting small towns, family farmers, and rural people.

This included our early report, Who Will Sit Up with the Corporate Sow?, which documented the financing trends that underscored the initial industrialization of hog farming in this country.

We followed that with a report on the structure of the banking industry. Where Have All the Bankers Gone? was a detailed analysis of ownership and control arrangements leading to the erosion of small town banking.

Decades later we led the fight to limit the amount of farm payments any one farm could receive. This was again recognition that to understand whether farm programs were actually benefiting family farms and small towns, we had to carefully follow the money. 

Over the years we came to understand how gaps in the finance system were also holding small towns back. It wasn’t enough to fight the unfettered flow of capital to corporate structures. We also needed to shore up the flow of capital to small businesses and family farms.

That led the Center to launch the Rural Enterprise Assistance Project in 1990. Since then, we have trained over 10,000 businesses and lent nearly $10 million to rural small businesses. These are business that are otherwise locked out of traditional financing.

That work is focused in our home state of Nebraska. We wanted others to be able to replicate the model elsewhere, so we wrote and you helped us win the Rural Microentrepreneur Assistance Program in the 2008 farm bill. The program, housed at USDA, has pumped nearly $50 million in rural small business financing and support into small towns in 41 states.

Through policy advocacy, you have also helped us win greater federal investments in beginning farmer financing, and more recently a small loan program that opens the door for small beginning farm operations to get up to $35,000 in financing through USDA.

As we survey the rural finance landscape today, we still see major gaps. It used to be that our loans of up to $50,000 to rural small businesses in Nebraska filled the gap left by traditional banks. Increasingly, our business clients tell us many banks will not lend to them unless they are more established, have more collateral, and are in the market for at least a $100,000 loan.

That is why we are taking the next step at the Center for Rural Affairs. We have established a subsidiary loan-making corporation which was recently approved to be a Community Development Financial Institution, a US Federal Treasury destination. This will allow us to fill additional financing gaps, funding businesses and projects that help advance our mission.

We have a deep understanding and appreciation for how financing can be used against the kind of rural America we are working with you to create. We also understand how financing and access to capital can be used to create vibrant small towns and rural countrysides where you live.

That is why you can count on us continue to do what you have come to expect: keep our eye on the money.