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Projects Administration, the Congressional Research Service points out in an overview of USDA
Rural Development Programs.

Most of the early federal focus was on farmers, who generated the majority of the rural economic
activity at that time and who often lacked basic services. The Rural Electrification Act of 1936
provided subsidized loans and grants to rural electric cooperatives, eventually providing access
to electricity all across rural America. A similar build-out occurred in 1949, when telephone
cooperatives also became part of the program.

In 1964, the Farmers Home Administration (FmHA) was established to replace the Farm
Security Administration. The agency offered loan and grant programs for farms, water systems,
rural housing and emergency relief.

But as farms consolidated as a result of economic conditions, mechanization and the adoption of
new technologies, the federal focus expanded beyond the farm gate to the wider rural landscape.
So did program management.

When Congress passed the Consolidated Farm and Rural Development Act of 1961, it authorized
a major expansion of USDA lending. The title was changed in 1972 to the Consolidated Farm
and Rural Development Act, often referred to as the “Con Act.” As amended, the Con Act
currently serves as the authorizing statute for USDA’s rural development lending programs.

As part of the 1990 farm bill, the Rural Development Administration was established and
absorbed all non-farm FmHA programs. By 1994, the FmHA programs were transferred to the
Farm Service Agency, and Rural Development underwent more streamlining and reforms.

The Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994
authorized creation of the position of Under Secretary for Rural Economic and Community
Development within USDA, and further consolidated the USDA RD portfolio into four mission
areas: the Rural Housing Service, the Rural Utilities Service, the Rural Business Cooperative
Service, and the Office of Community Development.

Title VII of the 1996 farm bill expanded the portfolio to include telemedicine and distance
learning, increased grant funding for water and waste facilities and established the Rural
Community Advancement Program (RCAP) and the Fund for Rural America, one of the first
USDA RD programs established with mandatory funding.

In the 2002 farm bill, lawmakers expanded the number of USDA RD initiatives funded with
mandatory spending, including the Rural Strategic Investment Program. However, most RD loan
and grant programs are still funded through discretionary appropriations on an annual basis.

Silos of support

While a wide array of Rural Development programs can offer many options for helping keep
farmers on the land and rural businesses growing, this part of the farm bill is often not considered
to be a high priority for national farm organizations. For commodity groups, it’s usually
something that surfaces after the commodity, crop insurance, and conservation titles.

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