Rural Development

Date: 7/07
Position Number: III-B
Expires: 3/08

Background: NCGA encourages the U.S. Congress to initiate programs that will maximize potential opportunities for farmers and their communities. Engaging farmers in value-added processing, production, and marketing is an important strategy for enhancing farm profitability and fostering the development of their rural communities. This implies creating relationships between producers and their customers with shared risk and reward, enabling the producer to receive a larger share of their customer’s dollar by investing management, equipment, processing, time, etc.

Resolution/Position:

Supports:

1. Adding value through local ownership that will maximize farmers profit potential.
2. New sources of capital and lendable funds for start-up and growth businesses.
3. NCGA will actively disseminate information sources on how and where to access debt and equity financing for producer owned/invested opportunities to membership.
4. A secondary market for economic development loans.
5. The Commodity Credit Corporation loan program for farmer investment new construction or expansion of value-added enterprises.
6. Encouraging that the USDA Rural Economic Community Development Funds to be prioritized towards farmer owned value-added systems.
7. An investment tax credit to support farmer owned value-added initiatives.
8. Further development of programs that provide technical assistance, business planning, feasibility studies, market research and development, technology, incorporation for farmer owned facilities.
9. Studies which show what corn processing can do for infrastructures and jobs in rural America. These studies should qualify for USDA value-added grant funding.
10. Actively support full funding ($40 million) for USDA Rural Development Value Added Producer Grant Program.
11. Strong involvement by USDA – Rural Development State Offices in the development and scoring of applications of USDA Value-Added grants programs.
12. Strategies whereby farm income can be positively impacted by both a focus on productivity and a focus on opportunity.
13. Support implementation of the “rural development component” within the Farm Bill that would help create new corn utilization.
14. Support rural development grants language that encourages innovative value added efforts that do not depend on construction of facilities and supports market systems between producers and end users.
15. Value added opportunities for producers to invest up and down the value chain.
16. Support amending IRS Code Section 521, the certification criteria for producer cooperatives, to certify cooperatives in which more than 50% of the ownership and control is held by producers.
17. Support review and evaluation of co-op law to facilitate development of rural value-added projects.
18. Support amending federal law to define a producer owned or controlled business as more than 50% producer-owned or controlled for purposes of producer entities under federal tax, securities, and antitrust laws. Provide exemption for antitrust purposes similar to Capper Volstead exemption but without entity restrictions.
19. Support amending IRS Code to allow a cooperative or other producer business entity to convert to a newly eligible business structure without a liquidation tax being imposed if, after the reorganization, a majority of the governance and financial rights are held by producers of agricultural products.
20. Support allowing cooperatives and producers entities with proper disclosure to raise money from patrons and certain qualified investors as certified by the securities division of any state without federal registration. Exempt producer owned or controlled businesses from federal SEC reporting requirements unless securities are traded on a national public exchange.
21. Support amending SEC authority to grant a permit for an exchange for producers to trade or transfer their interests in producer owned or controlled businesses. Support grant from corn growers to develop model.
22. Support legislation that would prohibit the taking of property by eminent domain for private economic development.