From the Desk of Lynn Woolf
USDA Rural Development and Federated REA recently awarded a $740,000 no-interest loan (for up to 10 years) to AGCO. The loan is for a major expansion project nearing completion on AGCO’s Jackson, Minn., campus.
The loan is good news for AGCO. It helps finalize the expansion of about 75,000 square feet of production space and a new showroom. The expansion is tied to the company’s new manufacturing lines, the 8600 and 6400 series of Massey Ferguson wheel tractors, and increased production of the Challenger MT600C series and select models of the MT500 and 7400 series of track tractors.
The expansion is good news for the community. The workforce has increased from 850 to 1,100 workers, and more are still needed, according to AGCO.
USDA Rural Development awarded other loans in nine states for business expansion or municipal projects. For instance, over in North Dakota, another $740,000 loan was awarded to KEM Electric Cooperative to help LaMoure Equipment construct a new equipment dealership in Ashley, N.D.
The purpose of the loans, according to Agriculture Secretary Tom Vilsack:
"This funding will help rural businesses and entrepreneurs obtain the financing they need to thrive, grow and create jobs," Vilsack said.
Sounds good, right? Well, some of our readers from Rural Lifestyle Dealer’s sister publication, Farm Equipment magazine, weren’t so sure. They questioned why a large company such as AGCO would be eligible for such a loan and raised other concerns. Read their comments:
“Why would a company who brags of being the 'largest agricultural manufacturer in the world' need a loan from the USDA?”
"John Deere is doing the same with Federal Grant and Loan Requests for their facilities. So why bash AGCO ... They are bringing more jobs back to the USA, not taking them away like many companies."
"This loan is more about assistance to an American community and bringing jobs back from overseas than about propping up AGCO."
"The basis for the loan was to create jobs in the US while ignoring the fact that AGCO has destroyed many more jobs than they ever created."
It’s not a new practice for the government to give private industry a boost. It’s all about the metrics, showing exactly how the money for one will benefit many. That benefit is right here in our rural communities. And, the money isn’t a gift. It is a loan. No interest, but a loan.
It’s your turn. Join the discussion about USDA’s approach or share your ideas to spur rural economic growth.
Rural Lifestyle Dealer