Legal Definitions - Rural Business-Cooperative Service

The Rural Business-Cooperative Service (RBS) is an agency operating within the U.S. Department of Agriculture. Its primary mission is to foster economic growth and improve the quality of life in rural areas across the United States.

The RBS achieves this by providing financial assistance, primarily through loans and grants, to a diverse range of entities. These recipients can include local governments, public agencies, non-profit organizations, and private businesses. The funding is specifically directed towards projects that develop, expand, or improve businesses and essential services within rural communities, thereby creating jobs and stimulating local economies.

Here are some examples of how the Rural Business-Cooperative Service might operate:

• Rural Manufacturing Expansion: A small, family-owned furniture manufacturing company located in a remote part of Oregon wants to expand its production facility to meet growing demand. This expansion would create 50 new jobs in a town struggling with unemployment. The company could apply to the RBS for a low-interest loan to finance the construction of a new wing for their factory and purchase specialized machinery. The RBS would approve the loan because the project directly supports rural business development and job creation in a designated rural area. This illustrates RBS's function by showing a private business receiving a loan to expand its operations, which in turn stimulates the local rural economy through job creation.
• Community Health Clinic Development: A non-profit organization in a sparsely populated area of Kansas identifies a critical need for a new community health clinic, as the nearest hospital is over an hour away. The non-profit could apply for a grant from the RBS to help fund the construction of the clinic and purchase essential medical equipment. The RBS would provide the grant, recognizing that access to healthcare is a vital service that supports the well-being and economic viability of rural communities. This example demonstrates RBS providing a grant to a non-profit (acting in a public service capacity) to develop an essential service that supports the overall health and sustainability of a rural community.
• Agricultural Cooperative Processing Facility: A group of dairy farmers in rural Wisconsin decides to form a cooperative to build a small processing plant for their milk, allowing them to produce and market specialty cheeses directly, rather than selling raw milk to larger distributors. This would increase their profits and create local jobs. The newly formed cooperative could seek a loan from the RBS to help finance the construction of the processing facility and acquire the necessary equipment for cheese production. The RBS would support this initiative because it enhances the value of agricultural products, creates new rural businesses, and strengthens the local agricultural economy. This shows RBS supporting a cooperative (a type of private party/business structure) with a loan to develop a new business venture that adds value to local agricultural products and generates economic activity in a rural setting.