NCBA CLUSA works to preserve, increase federal programs crucial to the U.S. cooperative community

USDA’s Rural Cooperative Development Grant and Socially-Disadvantaged Groups Grant programs are cornerstones of the U.S. cooperative economy. 

NCBA CLUSA is working to preserve and increase federal programs that are crucial to the U.S. cooperative community. Alongside its partners, NCBA CLUSA is specifically seeking funding increases to the Rural Cooperative Development Grant (RCDG) program and Rural Energy Savings Program (RESP), both administered by the U.S. Department of Agriculture (USDA). These programs have a long track record of success in building and retaining cooperative businesses and reducing barriers for rural households to participate in the 21st century energy economy.

Rural Cooperative Development Grants

NCBA CLUSA is proud to advocate for two USDA-funded cooperative development grant programs: the Rural Cooperative Development Grant (RCDG) program and the Socially-Disadvantaged Groups Grant (SDGG) program. Within the U.S. Department of Agriculture’s Fiscal Year 2023 budget request, the agency proposed an increase to the Socially-Disadvantaged Groups Grant (SDGG) to $4.1 million, up from $3 million in Fiscal Year 2022. The budget also proposed level funding for the Rural Cooperative Development Grant (RCDG) program at $5.8 million.

These grants are cornerstones of the U.S. cooperative economy. SDGG funds provide technical assistance to rural cooperatives composed of socially-disadvantaged groups and to cooperative development centers supporting socially-disadvantaged cooperatives in rural communities. RCDG is the only program in the federal government that exclusively funds technical support for cooperative business development. Despite rising demand for cooperative development services and strong program outcomes, the RCDG technical assistance program has received stagnant funding at $5.8 million for more than a decade.

In April, NCBA CLUSA and partner organizations wrote to House and Senate Appropriations Committees requesting an increase to Rural Cooperative Development Grants in Fiscal Year 2023 to $15 million. Increased funding will provide cooperative development centers with greater capacity to meet the demand for their services to support cooperatives across all sectors of the economy.

As April closed, a coalition of 14 members of the U.S. House of Representatives also called for $15 million for RCDG in FY23 in a letter to the House Appropriations Subcommittee on Agriculture and Rural Development. This coalition, led by Reps. Angie Craig (D-MN) and Jim Baird (R-IN) has gained an additional four members since a similar letter was sent last year.

Last week, a coalition led by Sens. Tina Smith (D-MN) and Mike Rounds (R-SD) requested the Senate Appropriations Subcommittee on Agriculture and Rural Development also requested no less than $15 million for RCDG. Sens. Smith and Rounds, both of whom were recipients of the 2021 Cooperative IMPACT Champion Award, also led the appropriations request in FY22.

Rural Energy Savings Program

NCBA CLUSA has also joined a coalition to advance the vital work of RESP, other members of which include the National Rural Electric Cooperative Association (NRECA), the Environmental and Energy Study Institute (EESI), the American Council for an Energy-Efficient Economy (ACEEE) and the National Association of State Energy Officials (NASEO). On May 4, the coalition sent a letter to House and Senate Appropriators requesting $26 million for RESP in Fiscal Year 2023.

This request is an $11 million increase compared to FY 2022. The coalition’s request matches the President Biden’s Budget Request to Congress. The Administration estimates that the $26 million could be leveraged to provide approximately $254 million in direct loans, vital for ensuring RESP’s work continues to ensure that rural households can access energy efficiency improvements.

House Majority Whip Jim Clyburn (D-SC) led a letter to the Appropriations Subcommittee on Agriculture and Rural Development matching this request for $26 million. Clyburn was joined by Rep. Ron Kind (D-WI), who is a member of the bipartisan Congressional Cooperative Business Caucus. Whip Clyburn has worked with NCBA CLUSA on several occasions to promote RESP, including a 2019 Congressional briefing with officials from USDA, NRECA, and several electric co-op participants.

The Rural Energy Savings Program (RESP) is administered by USDA Rural Utilities Service. Since 2014, RESP has provided zero-interest loans to electric co-ops and other eligible entities to invest in renewable energy and energy efficiency improvements directly on homes at no or minimal up-front cost to the residents. The cost of the investments is paid back through the residents’ monthly utility bill, a mechanism called on-bill financing. This program helps residents save on their energy bills, reduces energy usage on the electric co-op, and reduces climate impact.

The program has an excellent track record, including zero missed payments throughout its existence. This enables the high amount of direct loans available through leverage of RESP funding. RESP also provides not only funding for a greener energy economy but also increases affordability for rural communities and lowers barriers to local investment.

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