RBS Programs

(Rural Business Service)

Department of Agriculture

Proposed Cut

$82M

% Reduction

100.0%

Action Type

elimination

Who Is Served

Rural small businesses; entrepreneurs in communities with populations under 50,000

Summary

The Rural Business Service (part of USDA's Rural Business-Cooperative Service) runs programs that help small businesses, entrepreneurs, and cooperatives in rural areas grow, through grants, loan guarantees, and technical assistance. The FY2027 budget proposes to eliminate these programs entirely, cutting $82 million — a 100% cut. The administration says the programs duplicate help already offered through the Small Business Administration and can be handled through private-sector lenders instead.

Who Is Affected

The main losers would be rural small businesses and entrepreneurs in communities with populations under 50,000, along with farmer cooperatives, nonprofits, tribal entities, and local governments that use tools like Rural Business Development Grants and Business & Industry loan guarantees. These programs specifically target underserved rural areas where private credit is often harder to obtain than in cities. The same FY2027 proposal also calls for cutting SBA staff by about 67%, which critics say weakens the agency the administration points to as the alternative.

What this cut would actually mean

If the cut takes effect, USDA would stop making grants and loan guarantees tailored to rural startups and expansions, so businesses in small towns could lose a source of capital, training, and technical help that private lenders may not fully replace. Rural development advocates warn this is part of a nearly 20% ($4.9 billion) overall USDA cut that would reduce support to farmers and rural communities during a period of rising farm bankruptcies. Fewer rural jobs could be created or retained, and some planned business projects in low-population areas may not move forward.

Why this hits Alabama harder

This cut would hit Alabama harder than most states because Alabama is much more rural than the country as a whole. About 42% of Alabama's population lives in rural areas, compared to only about 20% of people nationwide. Since the Rural Business Service programs specifically support small businesses and entrepreneurs in towns under 50,000 people, eliminating this $82 million program would take away a tool that a bigger share of Alabamians rely on than the average American.

Explore Rural Population in Alabama | AHR — Shows Alabama's rural population share at about 42.0%, one of the higher rates among U.S. states.
At A Glance | Alabama Department of Public Health (ADPH) — States that 2,123,399 residents, or 42.3% of Alabama's population, live in rural areas per the 2022 Census Bureau data.
Nation's Urban and Rural Populations Shift Following 2020 Census — U.S. Census Bureau report showing the national rural population was about 20.0% in 2020, far below Alabama's rate.

Sources

USDA FY 2027 Budget Summary — Official USDA budget document listing the Rural Business-Cooperative Service and FY2027 funding proposals.
USDA FY-2027 Chapter 32 – Rural Business-Cooperative Service — USDA's detailed explanatory notes for the Rural Business-Cooperative Service budget request.
USDA Budget Proposal Signals Shift Away from Food Aid, Rural Development (DTN/Progressive Farmer) — News analysis reporting the $82 million cut to the Rural Business Service, the SBA-duplication rationale, and a proposed 67% SBA staff cut.
Rural Business Development Grants – USDA Rural Development — USDA program page describing who is eligible (public bodies, tribes, nonprofits serving rural areas) and the technical assistance provided to small rural businesses.
Business Programs – USDA Rural Development — Overview of the Rural Business-Cooperative Service programs that leverage public and private credit to meet business needs in underserved rural areas.
Trump's nearly $5B proposed cuts to USDA could hurt rural America, critics say (St. Louis Public Radio) — Reporting on the roughly $4.9 billion (nearly 20%) FY2027 USDA cut and its potential effects on rural communities.
FY2027 USDA Budget Proposal is a Historic Setback for Farmers and Rural Communities (National Sustainable Agriculture Coalition) — Policy-analysis reaction describing the scale of proposed rural development disinvestment amid rising farm bankruptcies.