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DEFENSE) I

(»ÍIJED STATES DEPARTMENT OF AGRICULTURE
FOREWORD j

With the complexities and special problems

of urban living, with the huge public and social

costs of overcoming the problems of large-scale

urban population growth, and the implications

of nuclear, chemical, and biological war, it

would seem sensible to direct National policy

toward the maintenance of population in rural

areas. In fact, these serious social and economic problems of large urban concentrations

would justify renewed emphasis on the stream

of thought popularized by Thomas Jefferson

that rural America might be a good place í

sociologically for a sizable share of our population to live and work.

The job of selecting and building new industry to provide productive employment for

surplus farm population is complicated and

difficult. It involves many talents inside and

outside of agriculture.

The Secretary of Agriculture committed all

the USDA agencies, along with their many *

resources, including loans, technical help,

education and leadership, toward a revitalized program for support of State, area, and

local organizations to help them solve their .

own problems.

The Secretary directed that arrangements

be made to package USDA services on an

area-by-area basis. Each agency has been

directed and encouraged to pool its technical

and financial programs along economic area

lines to bring maximum support to local and

private efforts in rural areas for more raoid

economic development-for a rural renewal of

]ob opportunities, industry, and resources use

What one individual or one business o

county might not be able to do alone all^o^

the people of a trade or labor market

might be able to do in a concerted cr.A^'^''

ordinated way. °''^ coJohn A. Baker, Director

Agricultural Credit.
Pegs for Rural Progress

Rural Areas Development Handbook

RURAL AREAS DEVELOPMENT

What RAD Is

EAD is a coordinated program designed to

help rural areas make better use of all available

public and private facilities to promote better

utilization of human and natural resources that

are available in rural areas. The emphasis will

be on, but eiïorts will not be limited to, those

areas where underemployment and imemployment are prevalent.

How RAD Is Done

' RAD is a method of (1) organizing local

committees, consistmg of representatives from

all interest groups; (2) motivating these committees; (3) assisting them to formulate economic development programs; and (4) assisting them to implement such programs. The

aim is to establish :

(a) Efficient, profitable farms.

(b) Rural industries and businesses.

(c) Training and retraining programs for

those not needed in agriculture.

(d) Adequate rural public facilities.

(e) Expansion of recreational facilities for

both rural and urban people.

WHO DOES WHAT FOR RAD

Local county or area initiative and leadership is the prime mover for anything that is

done. Private and governmental agencies only

furnish some of the tools with which the area
leadership works. (One of the basic function^:

of the RAD program is to focus tlie attention?'

of all agencies in the USDA, as well as other*

groups who can help, on those rural areas desir-j,

ing assistance in expanding their income and|

employment opportunities). Within the U.S.

Department of Agriculture, the Secretary has'

assigned specific responsibilities to designated la

agencies. i|

The Office of Eural Areas Development hasil

been delegated the responsibility for coordinating the work of all departmental agencies %

who can contribute to rural areas development. 5

The Federal Extension Service does the organizational and educational work. The Farmers

Home Administration serves as the leader for

the technical panel wliich provides assistance

to State, area, and county committees and as- |

sists witli community facility projects. The

Rural Electrification Administration is delegated the responsibility for assistance with

project proposals. Xine other USDA agencies ,

aid in these and other activities.

All of the many regular agency on-farm pro- '

grams which help speed the needed reorganization and readjustments for fuller employment

of people operating farms will be emphasized

in the years ahead. In the following outline

attention is given to only those special phases

of each agency's operation Miiich are related

especially to the rural areas development

program.

Department of Agriculture

mm f

Office of Rural Areas Development

This office was created to expedite the apnli

cation and use of the resources of all aa'enL,

m the Department of Agriculture and eííe

where that can contribute to the rural areas

development program. It shall also providp

leadership and initiative in the formuktioi f
current and long-range rural areas development policies and programs for the Department

of Agriculture.

1

FES I

Federal Extension Service

This agency provides educational assistance

through the State Extension Services in organizing State, area, and county KAD committees,

with representation from all areas, organizations, and interest groups tliat have a contribution to make, including agriculture,

industry, local government, civic organizations,

commerce, finance, education, labor, religious

organizations, youth, and others. This agency

also provides educational leadership to organized RAD committees in systematically inventorying both human and physical resources, in

analyzing and identifying problems, determining economic development and adjustment potentials, and in formulating and implementing

programs and projects which make fuller use

of the area's human and natural resources.

120 f

Farmers Home Administration

This agency provides leadership at the State,

area, and county level for the organization and

operation of technical assistance panels representing all USDA agencies. These panels assist local Rural Areas Development committees

in utilizing resources available from government and private agencies to advance development projects. It also assists in planning and

developing community facility projects, training proposals, and technical assistance projects.

This agency makes loans to those unable to

borrow from private sources of credit on reasonable terms. Its program includes farm

operating loans; farm ownership loans; loans

to individuals and associations, including public agencies, for water and land development;

5
»

loans to local organizations to help finance

small watershed projects; rural housing loans;

and emergency loans to farmers hard hit by'í

natural disasters. County supervisors assist ;

farm families receiving credit in preparing a .

farm and home j^lan, and provide on-farm as- .

sistance in managing family resources. i

ïm I

Rural Electrification Administration

This agency is delegated the responsibility

for assisting in the development of rural industrial and commercial enterprises that will

help to alleviate underemployment and unemployment in rural areas. This agency also

makes loans to REA borrowers who, in turn,

finance the purchase of machinery and other

equipment among the users of their electrical

systems. In its basic program, REA stimulates the development and use of electric power

and telephone service in rural areas.

GS I

Economic Research Service

This agency makes recommendations to be

used in designating rural redevelopment areas

for the Area Redevelopment Administration in

the Department of Commerce; performs research to identify rural economic problems and

solutions; and carries on a national prooram of

research in problems of low income rural areas

and the potentials for economic development of

such areas.

BS I

Statistical Reporting Service

This agency assists State, area, and countv

technical panels in finding facts regardino- f.^,,,,

production, costs, and income as needled bv

btate, area, and county committees in fi •

analysis of problems and programs m rurll

development. ^

6
psa I

Agricultural Stabilization and Conservation Service

This agency provides financial and secures

technical'^issistance for soil, water, and woodland conservation projects involving both individual farm and community activities.

It also aids through loans, price support, and

adjustment in the development and encouragement of efficient and profitable farm operations

and provides information to assist m determming the needs for local industry and the capabUities of rural people involved in rural areas

development.

Ría I

Soil Conservation Service

This agency provides technical assistance

through local soil conservation districts for

planning special uses of land and teclinical and

financial assistance in carrying out watershed

projects for flood and sihation prevention;

water supply for agricultural, municipal, industrial, recreational, and fish and wildlife purposes; and land-use adjustment.

m I

Forest Service

This agency provides technical assistance and

advice for State, area, and county committees

concerned with planning for increased employment which may result from forest recreation,

woodland management, and processing of forest products.

|CSESS|

Cooperative State Experiment Station Service

This agency provides basic facts on rural

population and problems with special emphasis

on problems and solutions within the State.

7
Kepresentatives serve on State rural areas de-¡I

velopment committees and as resource membersjit

of State technical panels. Further details on,,';!

resources available to State, area, and county 5J

committees should be explored by contacting;!

the Land-Grant College. j ^b^

m I

Agricultural Research Service

This agency provides technical advice and

counsel on nidustrial feasibility of agricultural

product processing plants which may be under

consideration by State, area, or county rural

areas development committees.

FCAj

Farm Credit Administration

This is an independent agency of the Fed

eral Government, supervising three credit serv

ices: Federal Land Banks and Assoo f

Federal Intermediate Credit Banks and p'^'

FCSI

Farmer Cooperative Service

This agency provides information on how to

use cooperatives in rural areas development, í

and technical advice and assistance in deter- ,

mining the feasibility of using this form of ,5

organization in many specific projects, such as j

marketing, storage, and processing of agricultural products; handling farm supplies; and

obtaining farm business services.

Q!S I

Agricultural Marketing Service

This agency provides counsel and advice on

the feasibility of and assists in planning market

facilities. It also provides current data on the

volume and direction of movement and prices

of products moving to market.
duction Credit Associations; and Banks for

Cooperatives. The first two services lend to

farmers and ranchers for general purposes, and

the third service lends money to farmer cooperatives for financing facilities, operating capital, and commodities.

ARAJ

Department of Commerce

Area Redevelopment Administration

Created by an act of Congress, Public Law

87-27, entitled "Area Redevelopment Act"

(May 1961), the Area Redevelopment Administration provides for five basic types of Federal assistance in areas which are designated in

accordance with formulas as set forth.

1. Loans for industrial and commercial

projects.

2. Loans and grants for public facilities.

3. Technical assistance.

i. Occupational training.

5. Retraining subsistence payments.

It also assists through the urban renewal provisions of the Housing Act.

As of March 5, 1962, the Area Redevelopment Administration had designated 852 areas

for redevelopment. In these areas are 686

counties which are rural in character. In these

counties, the Department of Agriculture works

with the Department of Commerce in helping

local people and areas help themselves. For

the latest details on the many phases of the

program, write to the Area Redevelopment Administration, U.S. Department of Commerce,

Washington 25, D.C.

B (

Small Business Administration

This is an independent agency of the Federal

Government whose functions include :

634869 O - 6Z - 2 9
1. Procurement and technical assistance :

(a) Insuring that a fair proportion of||[

Government contracts for purchases ^

and the sales or disposal of property

are placed Avith small-business enterprises ;

(b) Providing technical and managerial *

aid, advismg and counseling on Gov- ''

ernment production, methods engi- '

neering, and research and develop- -Í

ment, including new products ; and '

(c) Providing guidance through man- -

agerial publications and administra- '^

tive management courses. 3

2. Making loans to individual small-business '

firms when they are unable to procure such '

financing from private sources on reason- '

able terms. i

HHFAI

Housing and Home Finance Agency

This is an independent agency of the Federal

Government, orighially created by the Congress in 1947 to help large and small communities. Tlie act was amended by the Congress in

1961 to expand the scope of its aids to housing

and community development. The following

are the major functions of HHFA :

1. U)-ban Renewed Administration:

Grants to State and metropolitan planning agencies, and loans and capital

grants for urban renewal projects.

2. Federal Housing Administration:

Home financing (insures mortgages).

3. Public Housing Administration:

Aid for low-rent public housino-.

4. Community Facilities Admintstration:

a. College and hospital housino-.

b. Housing for senior citizens.

c. Advances for planning and loans for

construction of needed public works

6. Technical assistance for community im

provement.

10
INTERIOR]

Department of the Interior

The Bureau of Indian Affairs provides technical assistance to Keservation Redevelopment

Ireas on such things as: (1) Formulation of

overall economic development programs, (2)

identifying and appraising suitability of industries for location on or near reservations, (3)

feasibility studies of potential recreational and

tourist facilities, and (4) studies of uses for

natural resources in the designated reservation

areas.

The National Park Service and the Bureau

of Mines, Sport Fisheries and Wildlife, and

Commercial Fisheries may be able to provide

teclmical information and advice concernmg

proposed commercial developments for recreation or processing of minerals or fishery resources.

ILABORK)

Department of Labor

The Department of Labor sponsors through

State Employment Security agencies these programs under the Area Redevelopment Act :

1. Collection of labor market information for

area designation.

2. Determination of occupational needs that

can be met by training.

3. Selection of trainees for and referral of

trainees to approved training courses.

4. Payment of subsistence benefits to trainees.

5. Promotion of apprenticeship and other

types of on-the-job training.

6. Assistance in job placement after training.

11
¡am I

Department of Health, Education, and Welfare

After an economic development program has

been approved for a designated area and the

occupational training and retraining needs of

tlie unemployed and underemployed persons

have been determined, the Department of

Health, Education, and Welfare, in cooperation with State and local educational agencies,

develops a vocational training program to meet

those needs. The Department then provides

througli State and local educational agencies

the finances necessary to cover all costs other

than subsistence for trainees, which is provided

through the Department of Labor.

^DEFENSED

Department of Defense

The Department of Defense has the following activities and information that may be of

interest to rural areas :

1. A program to minimize the economic impact on commmiities resulting from shifts

in defense programs.

2. Assistance to firms in areas of substantial

and persistent unemployment, in accordance with the provisions of Defense Manpower Policy No. 4.

3. Basic information on defense buying procedures and lists of major military procurement offices and what they purchase

are contained in a pamphlet entitled Selling to the Military. This pamphlet can

be obtamed from the Superintendent of

Documents, U.S. Government Printing

Office, Washington 25, D.C., for 25 cents

4. Details concerning the best use of excess

military land suitable for agricultural

grazing, commercial, or industrial purposes may be obtained from the appro12
priate regional office of the General

Services Administration.

5. The Corps of Engineers, through its district offices, provides flood and navigation

controls on major rivers and their tributaries. In pursuing this function, they

obtain the necessary lands and let the contracts for construction of dams.

^PR1VATE-$TATE SOURCES^

Private Credit Sources

^^HICH mOULD BE EXPLORED BEFORE REQUESTING FINANCIAL ASSISTANCE FROM GOVERNMENT

SOURCES

Individuals

Investment clubs

Local banks

Savings and loan associations

Credit miions

Fraternal organizations

Pension funds

Labor unions

Local industrial development corporations

Community development corporations

Local chambers of commerce

State chambers of commerce

Small business investment corporations

Planned industrial parks

Eailroad companies

Electric and gas utilities

Area development associations

Regional development groups

State and local development councils

Statewide development corporations

Other local credit sources

13
Department and Agency

DEPARTMENT OF

AGRICULTURE

Farmers Home Administration :

FINANCIAL AND TECHNICAL ASSISTANCE

Type of Loan

Operating loans to assist farm families in making basic

adjustments needed for successful farming.

Farm ownership loans to enlarge, develop, and buy farms

and refinance debts.

Loans to individuals or groups in rural areas to develop

water supply systems for farm and home use, drain farm

land, and soil conservation.

Loans to farmers suffering losses due to natural disasters.

Loans to farmers and other rural residents for repair,

improvement and construction of homes, farm buildings

and housing for farm labor.

Watershed loans to help finance projects in small watersheds. (See also Soil Conservation Service.)

Kepayment

Period

Interest

Rate

Up to 7 years 5 percent.

Not more than

40 years

5 percent.

Not more than

40 years

4% to 5 percent.

Scheduled by

FHA Supervisor

3 percent.

Not more than

33 years

4 percent.

Not more than 2.7 percent.

50 years (1962 rate)
Rural Electrifleatiou

Administration :

FARM CREDIT

ADMINISTRATION

Where funds are not available from other sources at rea- lo years, tçener- Recommend 4 personable rates, loans are made to electric borrowers for ally, but not more cent or costs,

electrical equipment, wiring, plumbing, and machinery than two-thirds of

for persons or firms in rural areas who are receiving or the life of the

about to receive electric service. equipment.

Banks for Cooperatives : (1) Facility loans to eligible farmer cooperatives.

(2) Operating capital loans.

TJp to 20 years Range 4.5 to 5.5

I)ercent.

Usually 1 to 5 4.5 to 5.5 percent,

years

(3) Commodity loans. Usually less than 4 to 5 percent,

a year.

Federal Laud Banks and Associa- Loans on farm real estate for general farm purposes, up Not less than 5 ; 5% to 6 percent,

tious : to 65 percent of appraised value. No more than 40

years

Production Credit Associations: To farmers for: (1) Production expenses. Usually 1 year

(2) Equipment and improvements. Up to 7 years

6 to 7 percent.
Department and Agency Type of Loan

DEPARTMENT OF COMMERCE Loans and grants available only in designatecl areas.

Repayment

Period

Interest

Rate

Area Redevelopment Administration " :Section 6 ^—Commercial and industrial loans. No limit 25 years

on amount. Uj) to 65 percent of aggregate cost, excluding

all other Federal aid. Other 35 percent must be available.

10 percent of aggregate must be from state or local subdivision. 5 ¡lercent must be from non-C!overnmeiit source.

No loans for working capital. No loans for relocation of

industry.

Secured by mortgage.

Must be in designated redevelopment area, and must be

a part of overall economic development plan.

Section 7 '—Public facility loan.s—Up to 100 percent of 40 years

cost of project. Must not compete with existing facilities.

4 percent (At

present).

3% percent.

Section S—ARA empowered to make grants under certain

conditions.

• Write to Area Redevelopment Administration, Department of Commerce, Waslilngton 25, D.C., for details.

MVhen no otlier credit is available on reasonable terms. ._..^..--,_:;^
Department and Agency

SMALL BUSINESS ADMINISTRATION :

Ttii)c of Loan

Section 7(a)—Husiness plant I'oiistruction, conversion, or ex-jmnsion, inc-hidinf? the lUMiiiisitioM of land, to tinancc

acquisition of e(iiiii)uient, facilities, machinery, supplies or materials, or working capital.

Section. 7(/j)—Disaster to restore home

or business from disaster.

A/awimutn

Amount of Loan

Statutory :

,1;.S.".(),0()Ü

l'olicy :

.f2(M),()()ü

Aluaoimum

Kcpayment

Period

Maœimum

Interest Hate

10 years (5 to 6 4 percent in designated reyears for working development areas ; 5%

cai)ital) percent in other areas; if

banl( i)arti<ipates at lower

rate on its share, HliA will

redui'e accíjrdinfíly as low

as 5 percent.

Amount of loss 20 years

Section . ¡(M—State Development. To Will match bor- 20 years

stimulate and suppleuu'nt flow of e(iuity rowings from all

capital and lont;-term funds. other sources

3 percent.

4 percent in designated redevelojiment areas ; 5 percent in other areas.

Secííoíi. 5(í2—Local Development. Plant ,p.'>0,000 for each 25 years

construction, conversion or expansion, sniall business but

including ac(|uisitu)n of land, to assist not more than 80

an identiHable small business concern, percent of cost of

each project.

4 percent in designated redevelopment areas ; 5i^

percent other areas; If

bank participates, at lower

rate, SKA will reduce accordingly as low as 5 percent.
Department and Agency Type of Assistance Who Is EligiUe

HOUSING AND HOME FINANCE

AGENCY

Federal Housing Administration : Insurance of mortgages to buy, improve, or Determined by type

rehabilitate homes or rental housing. and purpose of loan.

Community Facilities Administra- Loans to build rental housing for the elderly. Nonprofit and limited

dividend groups, cooperatives, certain

local public bodies.

Loans to build local public works, such as I'olitical subdivisions

sewers, waterworks, gas distribution systems, or instrumentalities

with less than 50,000

population.

Interest-free advances (loans) to plan non- Any State or local

Federal public works. agency with authority to carry out project.

Loans to colleges for student and faculty Public or private

housing; to hospitals for housing student nonprofit colleges

nurses and interns. universities, or hospitals.

Repayment

Period

Determined by

type and purpose

of loan.

50-year

maximum.

40-year

maximum.

Payable when

construction

begins.

•10-year general

maximum.

Interest

Rate'
Urban Renewal Administration : Cash grants toward the cost of coniinehensive urban planning. I'olitlcal siibtUvislons

or ilistrnineiitallties

authorized by State

law to undertake

project.

Cash grants toward the cost of title of control

of permanent open-space land necessary to an

area plan.

I'olitical subdivi- None.

siijus or ¡iistruinentalities authorized by

State law to undertake project.

Public Housing Administratir

Advances, loans,

newal projects.

and grants for urban reLoans, annual contributions (subsidies), and

technical advice in providing low-rent public

housing.

I'olitical subdivisions Varie.s, as applior instrumentalities cable,

authorized by State

law to undertake

project.

I'olitical subdivi- Varies, as apiilisions or instrumen- cable,

talities authorized Ity

State law to undertake project.

' See ageiie.v ior detailed information on interest rates.
Nongovernmental Sources of Technical Assistance

Farm organizations Colleges

Local banks Service groups

Labor unions Chambers of commerce

Church groups Women's clubs

State Co-op Councils Trade associations

Research groups State Industrial DevelEailroad companies opment Agencies

Universities Utilities

For detailed information on governmental

agencies, contact the local or area ofñces of each.

If this is not convenient, write to the following

Federal agencies in Washington, D.C. :

U.S. DEPARTMENT OF AGRICULTURE

Office of Rural Areas Development

U.S. DEPARTMENT OF COMMERCE

Area Redevelopment Administration

U.S. DEPARTMENT OF LABOR

Bureau of Apprenticeship Training or

Bureau of Employment Security

DEPARTMENT OF HEALTH,

EDUCATION, AND WELFARE

Office of Vocational Education

SMALL BUSINESS ADMINISTRATION

HOUSING AND HOME FINANCE

AGENCY

Office of the Administrator

DEPARTMENT OF THE INTERIOR

Resources Program Staff

DEPARTMENT OF DEFENSE

U.S. GOVERNMENT PRINTING OFFICE : 1962—0-634869
PRIVATE

STATE SOURCES

DFFICE OF RURAL AREAS DEVELOPMENT