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Posted on  

August 3, 2001

Co-Ops Urge Senate To Spur Investment In Rural America; NCBA Asks Ag Committee to Include a New Equity Fund in Next Farm Bill

The National Cooperative Business Association, in a hearing earlier today, urged the U.S. Senate Agriculture Committee to authorize and fund legislation to create a new source of equity capital for cooperatives and other rural businesses when the Committee takes action to rewrite farm legislation in the coming months.

"From my perspective as a farmer, a cooperative business-owner, and a resident of rural America, I can tell you that this is one of the most important things the Committee can do to have a lasting and positive impact on rural communities," said David Kolsrud, manager of CORN-er Stone Farmers Cooperative, who was testifying on behalf of NCBA. "Raising equity capital is daunting for all rural businesses regardless of how they are organized, what they produce, or where they are located. But it is particularly hard for new farm cooperatives."

Kolsrud urged the Committee to include the provisions from the National Rural Cooperative and Business Equity Fund Act in the next Farm Bill. The Act was introduced by Senators Harkin (D-Iowa) and Craig (R-Idaho) in the 106th Congress and was included as part of S. 20 introduced by Senator Daschle and others earlier this year. The legislation creates a framework for a private corporation that would manage a Fund to make equity investments in rural America. The bill also authorizes incentives for private investment in the fund.

CORN-er Stone Farmers Cooperative is a new-generation cooperative based in Luverne, Minnesota, with members in Iowa, Minnesota and South Dakota. It has majority ownership in an ethanol processing operation and is a member of NCBA. Kolsrud told the Committee that even though the operation has created 28 high-paying jobs and returned to farmers a dollar per bushel more than the market price for corn, equity constraints nearly prevented the project from getting off the ground.

NCBA is a D.C.-based national membership association representing cooperatives across all industries, including agriculture, childcare, credit unions, energy, food retail and distribution, housing, insurance, and many others. It helped organize the coalition supporting the National Rural Cooperative and Business Equity Fund Act, which includes organizations representing rural electric and telephone cooperatives, farmers, and both private and cooperative lenders.  

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