Vilsack announces rural business investment program

This article has been updated to clarify the section about the farm credit institutions who funded the effort.

By Chelsea Keenan, The Gazette

U.S. Department of Agriculture Secretary Tom Vilsack announced on Monday the creation of a new $150 million investment fund aimed at spurring small business growth in rural America at the Central Iowa Power Cooperative in Cedar Rapids.

'It fills out what we need in rural American - small businesses and job opportunities,” said Vilsack in a phone interview with The Gazette.

In the past, the USDA has provided loans or loan guarantees to help rural businesses, but it has never been in the position to invest capital. The creation of the Rural Business Investment Co. allows the USDA to facilitate private equity investments in agriculture-related businesses.

Working through the USDA program enables licensed funds to raise capital from Farm Credit System banks and associations.

The system is a network of banks and lending associations that provides more than $200 billion in loans and leases to farmers, ranchers and agribusinesses.

'This new fund will allow innovative small businesses throughout rural America to access the capital they need to grow and create jobs,” Vilsack said.

The fund will invest in existing businesses seeking to expand in bio-manufacturing, advanced energy production, local and regional food systems, improved farming technologies and other agribusinesses, he said.

Advantage Capital Partners, a growth capital and small business finance firm, will manage the new fund. Eight Farm Credit institutions, including Farm Credit Services of America, which is based in Omaha, Neb. and has an office in Cedar Rapids, have funded the new effort.

Vilsack said this is the first of many new efforts to better facilitate job growth in rural areas. He said the USDA will be more active and aggressive, creating a research foundation and a conservation partnership.

The USDA also will hold the Rural Opportunity Investment Conference later this year in Washington, D.C., to attract additional investments to rural areas by connecting investors with business leaders, government officials and economic development expert.

l Comments: (319) 398-8331; chelsea.keenan@sourcemedia.net