Development News

Guest Column

Building the New Rural West

By Brian Depew, Guest Writer, 11-17-08

As newly elected legislators prepare to join returning Westerns in the halls of Congress they have an opportunity to help build a new economy in the rural West. By supporting programs that unlock the entrepreneurial spirit of rural America, Western legislators can deliver on their promise to create opportunity for rural communities in their states.

In rural America, small businesses are the backbone of our economy and communities. They create new jobs, develop new industries and make our rural communities vibrant. They run the grocery stores, restaurants and hardware stores critical to rural communities. At the same time they lead the way towards new economic opportunity built on renewable energy, technology and other emerging industries. Together they protect, nurture and rejuvenate the American dream.

Small business development is a proven strategy, and history points to the important role small businesses play during economic slowdowns such as the one now spreading across the nation. In 2002, during the nation’s last recession and a time of high unemployment, small businesses created nearly 1 million new jobs.

A New Generation

Many young people in rural communities are interested in starting businesses and new farming enterprises as a way to build opportunity that will enable them and their peers to remain in their communities. The entrepreneurial spirit of new immigrants across the rural West is also lifting up their families and communities.

A new generation and new immigrants alike are important building blocks of renewing rural communities. But the lack of business training, financing and technical support for new businesses holds these promising developments back. It is time we invest in these rural entrepreneurs.

Congress Can Help

The recent farm bill took a small step in the right direction. With the help of Western Senator Ken Salazar, the bill created the new Rural Microentrepreneur Assistance Program. The program will make grants to organizations that encourage and assist entrepreneurial development in rural communities.

It’s 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 into big banks to solve the nation’s financial crisis.

Congress can start by increasing funding for the new rural entrepreneur program from $4 million to $25 million, still just half the amount originally proposed for the program. That investment will prompt expansion and establishment of small businesses across rural America.

Additionally, Congress should provide direct support for cash strapped small businesses by establishing a microenterprise investment tax credit. A 20 percent credit on up to $50,000 of investment will provide a direct cash infusion of up to $10,000 to prompt small business expansion and new start ups. Because start up businesses rarely show a profit in their initial years, making the tax credit refundable would provide additional economic stimulus in these hard times while also spurring investment in the future success of the business.

A Wise Investment

New and returning members of Congress from across the West will have an opportunity to act on these two policy proposals as the new Congress searches for legislative vehicles to stimulate economic recovery across all of America.

There is much potential in rural small business development, and there can be no wiser investment to provide opportunity and economic growth at a time of economic slowdown than assistance to businesses that create new jobs and innovation in our rural communities.

Brian Depew is a Program Director at the Center for Rural Affairs in Lyons, Nebraska

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