USDA creates new investment fund to support agriculture-related businesses

The United States Department of Agriculture (USDA) has announced a new $150m fund to help create growth and job opportunities in rural areas in the US.

The investment fund, which is part of the Obama Administration’s new ‘Made in Rural America’ export and investment initiative, will help drive the growth of small businesses across rural America.

The new Rural Business Investment Company (RBIC) will allow the USDA to facilitate private equity investments in agriculture-related businesses.

The fund will be formed under the USDA’s Rural Business Investment Program (RBIP), which will be used by the agency to license funds to invest in enterprises that will create growth and job opportunities in rural areas.

Advantage Capital Partners, which will manage the new fund, and its partners from eight Farm Credit institutions will invest nearly $150m into the effort.

The eight partners are AgStar Financial Services, AgriBank, Capital Farm Credit, CoBank, Farm Credit Bank of Texas, Farm Credit Services of America, Farm Credit Mid-America and United Farm Credit Service.

USDA agriculture secretary Tom Vilsack said the new fund will allow innovative small businesses throughout rural America to access the capital they need to grow and create jobs.

He said, "One of USDA’s top priorities is to help reenergize the rural economy, and we now have a powerful new tool available to help achieve that goal.

"This new partnership will allow us to facilitate private investment in businesses working in bio-manufacturing, advanced energy production, local and regional food systems, improved farming technologies and other cutting-edge fields."

Currently, USDA programmes exist to help provide loans or loan guarantees to help rural businesses grow; however, the new fund will help provide many small cutting-edge businesses with equity support in addition to or instead of borrowed funds.