Rural Development and the 2007 Farm Bill

Rural Development and the 2007 Farm Bill

by Jon Bailey, Center for Rural Affairs, jonb@cfra.org

The Rural Development Title of the 2007 Farm Bill should be based upon and should focus on two themes: entrepreneurial development in rural areas and strategies to build assets and wealth for rural people and in rural communities. Both strategies address the persistent, deep-rooted poverty present in many rural parts of the nation. Both strategies address the growing economic disparity between rural and urban areas of the nation. And both strategies address the issues of how to repopulate rural areas and how to ensure the long-term future of rural America.

There is a developing broad agreement among researchers, policy advocates and others that the traditional economic development models of industrial and business recruitment simply do not meet the needs of rural communities. Entrepreneurship has been lifted up as an economic development model that will better serve rural people and rural places.

For example, the Federal Reserve Bank of Kansas City states that, “Rural policymakers, who once followed traditional strategies of recruiting manufacturers that export low-value products, have realized that entrepreneurs can generate new economic value for their communities.

Entrepreneurs add jobs, raise incomes, create wealth, improve the quality of life of citizens and help rural communities operate in the global economy.” Federal rural policy must begin to recognize the importance of entrepreneurship as a rural development strategy and provide the resources necessary for rural people and rural communities to leverage the spirit, creativity, and opportunities entrepreneurship creates.

Asset- and wealth-building strategies are equally important. Greater income alone cannot lead to economic well-being for individuals and families; asset- and wealth-building through home ownership, business ownership or enhanced education lead to important long-term psychological and social effects that cannot be achieved by simply increasing income.

While income is an important factor, income can be achieved nearly anywhere in varying degrees. Assets like businesses and houses bond one to a place and help to build sustainable communities. A commitment to rural asset- and wealth-building strategies can lead to a stronger individuals, families, and communities.

Agriculturally-based entrepreneurship and innovation must also continue to play a vital role in rural development policy. Agriculturally-based entrepreneurship can contribute to the creation of jobs and businesses in rural communities and to the alleviation of poverty in the same communities.

Programs that promote a new generation of farmers and ranchers and which provide incentives for entry into agriculture also benefit the development of rural communities and their institutions. Beginning farmer and rancher programs also provide opportunities for the advancement of agriculturally-based enterprises among a new generation of rural entrepreneurs.

We propose the following for the 2007 Farm Bill Rural Development Title:

Small Business and Entrepreneurial Development

Many rural communities have self-employment and small business ownership rates many times greater than urban areas. Small businesses are also the job creators in much of rural America. In the Great Plains region, for example, nearly 70 percent of job growth in the 1990s came from non-farm proprietorships. To allow for continued creation and expansion of rural businesses and employment opportunities, resources to rural small business development must be enhanced.

Rural Asset- and Wealth-Building

Asset- and wealth-building strategies will allow rural people to undertake activities that have both individual and community benefits. Individuals and families build an asset base that lifts the veil of poverty and dependence on low-wage work. Communities become stronger and more viable as opportunities and ownership are expanded to a wider group of people. The issues of depopulation, poverty, and low-wage employment facing many rural communities are largely a function of a lack of opportunity in those communities. In order to create a future for those communities and their residents, a commitment must be made to enhancing opportunity through the building of assets and wealth.

Agricultural Entrepreneurship and Innovation

Many farmers and ranchers are pursuing new consumer driven markets for agricultural products, thus creating enhanced economic opportunities in rural communities. By providing resources to farmers and ranchers to supply those markets, issues of agricultural profitability, economic decline, and poverty alleviation in rural communities can be addressed. The 2007 Farm Bill can address these issues and promote agricultural entrepreneurship and innovation by reauthorizing and reforming the Value-Added Producer Grant Program and by providing other means to promote and reward agricultural innovation.

Beginning Farmers and Ranchers

The future of agriculture depends on the ability of new family farmers and ranchers to enter agriculture. Providing opportunities for beginning farmers and ranchers is also important for rural communities – the viability of rural businesses, schools, and other community institutions are all dependent in part on the existence of new agriculturalists on the land. The Beginning Farmer and Rancher Development Program can play an important role in addressing critical issues facing new farmers and ranchers. Extension of other 2002 Farm Bill programs and modifications in tax law can also provide opportunities for beginning farmers and ranchers.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
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