Rag Baloney is a long roll of baloney traditionally sold wrapped in a fine mesh cloth or cheesecloth (thus the reference to "rag"), though plastic is now more common. It is an already cooked "luncheon meat" that can be eaten sliced as is, or fried for "baloney on a bun" sandwiches.
Compared to "regular" Baloney, it is quite salty, less expensive, and normally has a higher cereal content for filler.
In America, it is pretty much available only in the South, where it is both made and sold in a relatively thin stick form. The whole roll is sometimes referred to as a "chub."
For frying or barbequing, it is often sliced thickly, about 1/2 inch (1 cm.) The edges of slices will be scored in 3 or 4 places, then the slices will be fried up in grease or butter and served on a bun like a hamburger, with the usual fixings of ketchup, relish, mustard and onion.
Rag Baloney is usually found at any family barbeque in Tennessee as one of the meats on offer. It will be sliced thickly, covered in a barbeque sauce and then put onto the grill. Some people like to just sauce the whole "chub", unsliced, and toss it on.
Country stores in the South used to always have a roll open and on the go, with a meat slicer to slice up how much you wanted and in the thicknesses you wanted.
Don't confuse this with regular Baloney which is sometimes sold in waxed-cloth rolls. This Baloney will be in a much thicker roll, giving you the same width and type of Baloney slices that you would get if you bought already-sliced Baloney in packages.
Also spelled "Rag Bologna".
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