Job creation and rural investment are key concerns of the Obama administration. Now, Agriculture Secretary Tom Vilsack will announce that the USDA “will support two private investment funds that will together raise $125 million to buy stakes in businesses across rural America.” The announcement follows visits Vilsack has made to some key private equity firms.
The funds – Rural Business Investment Companies – are designed to attract private investment in agriculture-related enterprises. Private firms will work with the Farm Credit System, a government-sponsored banking and lending network that makes credit available to agricultural interests.
“Rural investment companies” were created in 2002 as a means of promoting job creation and generating rural investment. However, funding was cut by Congress in 2005.
Alexandra Stevenson (@jotted) reports for the New York Times:
“We’ve resurrected this tool as a way for getting additional capital for equity financing,” Mr. Vilsack said. Today, the entities are not leveraged, he added.
Advantage Capital Partners became the first firm to create a rural investment company last year and has raised $154.5 million. This year, it invested in Iowa Cage-Free, a company that specializes in building layer houses for cage-free egg production, and American Botanicals, which manufactures and supplies herbs and botanical products.
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