Vilsack: Administration Will Invest Tax Dollars in Grocery Stores

By Erick Hamme | September 15, 2011 | 11:12 AM EDT

FILE: Ag Secretary Tom Vilsack at the U.S. Department of Agriculture in Washington, D.C. (AP photo)

( -- Secretary of Agriculture Tom Vilsack announced Wednesday that USDA is handing out $14.7 million in taxpayer money to community groups in rural areas to lend or give to rural businesses -- including to rural grocery stores.

The USDA chief Wednesday announced 69 new spending projects under the Rural Business Enterprise Grants/Rural Economic Area Partnerships program (RBEG) and the Intermediate Re-lending Program (IRP).

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“The Rural Enterprise Grant program would provide resources to a community organization that in turn will allow that organization to provide that kind of training and assistance,” Vilsack said in a conference call with reporters.

Vilsack said that the money is going to small communities that don't have the resources to provide training and assistance to small businesses and entrepreneurs.

“Or it may be that the community has a number businesses that are getting started and having a difficult time funding the resources to get started. They don’t need a great deal of money they have little experience in terms of getting the business started, and so it’s somewhat difficult for them to be going to the commercial banker until they have a track record,” he said.

"The re-lending program that we're setting up would essentially empower this intermediate re-lending effort to have the resources to lend out to a number of small businesses so they can develop a track record so they can get commercial banks more comfortable with long-term financing.

“It may be that this is a community that needs a grocery store but in order to be successful they are going to have to remodel or renovate an existing facility resources could be provided for that,” he said. “Or it may be that they are looking for ways to reduce their costs to be more efficient with energy. It’s possible that a grant under the Enterprise Grant Program would provide resources.”

About $3.9 million of the money will go toward grants made under the RBEG program with about $10.9 million going toward the intermediate re-lending effort.

In fact, an online list of the recent grants under the RBEG program shows that two are specifically designed to benefit grocery stores one to an organization in Buffalo, Okla., for $81,550 dollars, and another to an organization in Potter, Neb., for $85,000.

The awardee in Potter, Neb., is the Potter Historical Foundation. The purpose of its grant is: “Buy and renovate a store to provide a cooperative grocery for the residents of Nebraska and Colorado.”

The awardee in Buffalo, Okla., is the High Plains RC&D. The purpose of its grant is: “Expand and remodel a grocery store for the community.”

The RBEG grants usually range anywhere from $10,000 to up to $500,000 dollars, Vilsack said.<-->