USDA Secretary Tom Vilsack on Monday announced the creation of a new investment fund for private equity investments in agriculture-related businesses as part of the "Made in Rural America" export and investment initiative.
Vilsack made the announcement during a press conference in Cedar Rapids, Iowa.
Currently, USDA programs exist to help provide loans or loan guarantees to help rural businesses grow, but many businesses also need equity support in addition to or instead of borrowed funds, a Farm Credit statement explained.
Advantage Capital Partners will manage the new fund, along with eight Farm Credit institutions, which have pledged to invest about $150 million into the new effort.
"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 partnership will focus on private sector investment in bio-manufacturing, advanced energy production, local and regional food systems and improved farming technologies.
The fund is being formed under the USDA's Rural Business Investment Program. USDA utilizes RBIP to license funds to invest in enterprises that will create growth and job opportunities in rural areas, with an emphasis on smaller enterprises. Working through the USDA program enables licensed funds to raise capital from Farm Credit System banks and associations.
Farm Credit says the new public-private partnership will have a tangible positive impact on the rural economy and is a model of how government can serve as a catalyst for private investment in rural America.
Eight Farm Credit institutions providing initial investments in the RBIC fund are: AgStar Financial Services (Mankato, Minn.); AgriBank (St. Paul, Minn.); Capital Farm Credit (Bryan, Texas); CoBank (Denver, Colo.); Farm Credit Bank of Texas (Austin, Texas); Farm Credit Services of America (Omaha, Neb.); Farm Credit Mid-America (Louisville, Ky.); and United Farm Credit Services (Willmar, Minn.).
USDA also announced that it is accepting new applications for other new Rural Business Investment Companies such as the one announced Monday. Interested applicants have until July 29th to submit their applications for review in FY2014. Any application accepted after this deadline will be held for consideration next year. USDA intends to accept RBIC applications through 2016.
In addition, Secretary Vilsack said that the White House Rural Council, as part of the Made in Rural America initiative, will convene the Rural Opportunity Investment Conference later this year to attract additional investments to rural America by connecting major investors with rural business leaders, government officials, economic development experts and other partners.
This conference will promote opportunities to invest in rural America by highlighting successful projects in energy, biofuels and bioproducts, infrastructure, transportation, water systems, telecommunications, health care, manufacturing, and local and regional food systems.
To learn more about the conference, visit www.usda.gov/investmentconference.