Rural Economic Development Includes Diversifying

The key to rural economic development is to figure out which businesses can be supported by your population and labor force, and which components of the historic farming, logging, or mining economic base are still viable.

Then just like all local economies, rural economies have to take responsibility for themselves, promote creative new businesses that can sell to customers from outside the community, and diversify to reduce risk from too much concentration in one particular product.

The era of a truly global economy makes everything much less predictable, and your communities have to be ready for macro economic trends over which they have no control.

Most farm families in the United States have already taken action to increase their income and its predictability through the employment of at least one family member off the farm. That's a rational individual household action.

From the community development perspective, though, those jobs should be as close to the rural housing as possible, simply because reducing the commute to work makes sense in all cases.

That's where diversifying through rural economic development, and strengthening the non-agricultural elements of the local economy, becomes important.

In sum, a rural economic development program should be three-pronged:

1. Increasing the soundness of the agricultural base through promoting best practices in farming, appropriate lending, assistance in adapting to new crops and livestock, and promoting new local market outlets.

2. Attracting good-paying non-agricultural jobs to the community to provide diversification and additional income opportunities.

3. Enhancing the interaction between agricultural and non-agricultural elements of the economic base so that new opportunities are discovered.

Increasing the Soundness of the Economic Base

As someone who grew up on a family farm, it's hard for me to hear the arguments that the family farm is obsolete, and that we should allow "big agriculture" to come in and rationalize agriculture just as many other industries have become efficient through economies of scale. But it's an argument I've considered very carefully, wanting to know the truth.

In the end, I don't think family farms deserve large government subsidies or protection from foreign competition. However, those who remain farmers should become much more agile and open-minded about which crops, practices, and products the market will support.

People in the developed countries are paying dearly for exotic vegetables, herbs, cheeses, wines, and fine cuisine, and I think a sound agriculture base would include:

  • Catering to middle class and upper class tastes in food and drink around the world, of course combined with sound marketing to local restaurants, schools, and hospitals,
  • Rapidly adapting crops to regain our edge as "bread basket to the world" as innovative high-protein, low-cost plants are bred to feed the truly hungry of the world, and
  • Seizing opportunities for collecting and creating biomass that can be effectively turned into fuel (switchgrass, not corn), electricity that can be effectively fed back into the power grid (wind and solar, for instance), and adapting less energy-intensive ways to grow and harvest crops. Energy generation may become a major rural economic development opportunity.

This means that the unsubsidized farmer will have to compromise the lifestyle and products of the last couple of generations considerably, to become adept at changing direction and adopting a global perspective.

Figuring out what they want lettuce we want to eat in our chic restaurants can be a shared enterprise, though, requiring plenty of technical assistance and farmer-to-farmer communication.

Claiming the Economic and Social Benefits of Agriculture

I do think we should both (a) account for the environmental and social benefits of resident farming that aren't necessarily shown in the financial bottom line, and (b) account for the environmental and social costs of the large corporate farms.

Locally owned and managed farms provide the environmental benefits of open acreage that filter stormwater runoff and recharge groundwater aquifers.

They furnish certain types of wildlife habitat, especially if the row ends are left in native vegetation, as state and federal conservation programs encourage. The corporate farms tend to be pretty much of an environmental disaster, raising livestock on impervious concrete floors and collecting excrement in giant vats somewhat prone to failure.

In terms of social benefits, the locally owned family farms are clearly superior. If close enough to a city, they can sell high-quality, just-picked food locally, if the local community will support it.

When the process is formal, it is called community-supported agriculture (CSA) or subscription farming. Advance annual subscriptions are sold to non-farm families, who agree to accept the weekly baskets of vegetables, fruits, flowers, or herbs as they grow, without being fussy about whether it's sugar snap peas, basil, or sweet potatoes this week.

It's estimated that there are more than 2,000 subscription farms in the U.S. today. Considering that the first known arrangement occurred in Massachusetts in 1985, that's a rapidly spreading idea.

Part of the appeal must be the local connectedness, family to family, with the concept that non-farm households gain the small adventure of creatively preparing and enjoying fresh foods they haven't necessarily ordered.

There are many variations; sometimes the subscribers are called shareholders, and occasionally there is a requirement that the non-farm household provide some labor on the farm.

This locally supported agriculture deserves more consideration. Other countries supply an increasing share of our food, and their safety standards may not be the same as ours. And the transportation cost, both financial and environmental, is enormous as a percentage of the total cost. I'm not sure this is a total answer to rural economic development, but it's worth a look.

Another idea gaining in popularity even in quite small towns is the farmer's market. Certainly there's an art to them, and many don't seem worth the farmer's time to spend a Saturday morning displaying crops and products.

It's rare to see supply and demand match exactly. But it's another way of deepening the social connection between farmer and consumer.

And agricultural uses may serve as part of the buffering against suburban sprawl at the edges of metropolitan areas. We choose the word "may" deliberately, because too often it seems that the conversion from native vegetation to agriculture is more of a precursor to development than to conservation.

But in rural areas where almost all land has been in agricultural use for a century or more, agriculture can be part of the imaginary line that planners need to draw to hold excess development, or sprawl, in check.

However, when farmers can sell their land for urban development, typically that means much higher property values, so they are going to sell unless there's a strong pull to stay on the land with sustainable agriculture.

Diversification for Rural Economic Development

Beyond stabilizing farm family income in order to preserve the best farms and the social benefits they confer, rural economic development is the same as economic development in any other location.

The exception is that some types of industries, and very large businesses in general, typically cannot survive in a rural location because of their economic inter-dependencies with other businesses.

One approach is to work closely with your state economic development department to (a) let them know you're serious about wanting to diversify your economy, (b) rely on the state's resources to give you sales leads you couldn't possibly afford to generate for yourselves, and (c) obtain the benefit of their wisdom and experiences about what types of businesses are realistic rural economic development possibilities.

To the extent that your state is relying on evidence, rather than naive hope, this may be helpful.

Perhaps an even better approach is to take responsibility for growing your own jobs. True, towns of 200 and counties of 15,000 people can't necessarily do this on their own. It's worth thinking about combining forces into a group of counties that are similar or complementary in what they have to offer to entrepreneurs or employers.

Forming various collaborations for economic development purposes is occurring at a rapid pace, both in rural and urban settings. Just don't use organizing a group as a substitute for facing stubborn issues that you already know about.

Otherwise, please study the remainder of the economic development portion of the site. Especially relevant might be the pages about entrepreneurship, since agriculture is a serious form of entrepreneurship and therefore kids who grew up on the farm often have an innate understanding of its rewards and demands.

Also check into the retail attraction page to understand the "I will if you will" program and how it might provide you with the several businesses each community needs to survive as a viable place to live.

Even though that page is written with a competition between suburbs in mind, your rural economic development program similarly would benefit from a couple of new businesses at the same time.

Many very small towns now have local history museums, often in the old railroad depot, closed school, or empty grain elevator. To give your museum a permanent boost, consider the Museum on Main Street program of the Smithsonian Institution.

The Smithsonian will provide and transport the exhibition to your local rural museum, and your town gets to have fun promoting and celebrating the event. In the process, the museum's board learns about marketing, handling volunteers, fundraising, planning special events, and how a good exhibit is prepared.

If you know or suspect that your housing wouldn't accommodate a successful rural economic development program, begin now to think about and plan for adding desirable rural housing.

You shouldn't build speculative housing, but at least having a plan for various housing types might be the difference between being able to attract a new employer and having them move on down the road.

There's No Need to Give Up on Agriculture

So because there are social and environmental benefits that are unique to agriculture, rural communities should investigate and support fully a positive future for agriculture as practiced in their climate, soil conditions, and cultural environment.

The best program for creating a community dialogue about the future of agriculture that I've seen was prepared by Pennsylvania State University and is described on this link. Farmers are invited to three forums, and individual farm site visits are conducted to obtain information and input. Then the University's folk analyze what might be helpful for the community.

Most importantly, a task force that represents the entire community, not simply the farmers, is formed to oversee the planning process and implement the plan. This is rural economic development at its finest.

A Pleasing Quality of Life in Agricultural Areas

Just like a larger town, you will be successful in rural economic development only when you make sure that the quality of life that you offer is attractive. If you don’t have a movie theater, so what?

In some ways, the electronic age makes it easier now than ever to provide what households need and crave in a rural environment. Most people want a sense of community, and a rural background is great training in that.

But rural places have personalities too, and if your personality shows that people are lazy, too fiercely independent to work together, and too insensitive to community need to confront eyesores and obvious problems, you'll have a hard time with economic diversification.

So take care of that excess cat population, paint up a few buildings, figure out why that broken windmill is still in the middle of Main Street, clean up some of the junk cars in front yards on the main road into town, and figure out how to have farmers say something nice about the townspeople, and vice versa, when your new prospect comes into town.

You don't have to look bigger or more sophisticated than you are, but you do need to look as though you care. Unless everyone really is dirt poor, don't give that appearance. It sends a bad message to people who are thinking of investing their money. You want them to think that rural economic development isn't a brand new idea to you.

But remember that entrepreneurship is the best step in rural economic development. And in rural areas some of the elements that lead to creative ideas, like unexpected ideas side by side, don't happen spontaneously too much. So part of your rural economic development program is having creativity sessions.

Yes, really. Don't call them that! Just say that you're going to have a program once a month at the extension center, and it will introduce rural people across the nation who have figured out unusual ways to make money.

By miracles of modern media, you can import video, slideshows, and even teleconferences that you wouldn't have dreamed of having access to fifty years ago. Have refreshments, but make everything about the event, from the nametags to the napkins to the food to the program, something a little different from the normal, and make these conversation pieces something made or manufactured in rural areas.

So expose yourselves to new ideas and projects from rural people, and with the honesty, integrity, and work ethic of most rural communities, you never know what could happen.

Of Particular Rural Interest:

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