Blog for Rural America

The Center for Rural Affairs, a private, non-profit organization, is working to strengthen small businesses, family farms and ranches, and rural communities. Permission to reprint items from this web log is hereby granted, on the condition that clear credit is given to the original source of the material. If the blog provides information for a story, please let us know by sending an email to johnc@cfra.org.

Thursday, March 30, 2006

Rural America Can Thrive with Smarter Investments

Rural America Can Thrive with Smarter Investments

By Chuck Hassebrook, Center for Rural Affairs, chuckh@cfra.org

America can invest in creating a future for its rural communities, or we can continue the misplaced federal priorities that are destroying them. The choice is ours. If rural people and our representatives lead, we can create a better rural future. There are practical strategies that work to revitalize 21st century rural communities. But local initiative must be matched by federal policies that support rural revitalization, rather than hinder it.

The 2007 farm bill provides the vehicle to set a new direction. The debate is starting. We must begin by building on what has worked. Small-scale entrepreneurship has been the most successful strategy for creating genuine opportunity and drawing young families to rural America. While overall private employment has fallen in rural Arkansas, employment has grown in micro enterprises—businesses with five or fewer employees.

Small business development and active citizens are creating success stories across rural America. For example, a Nebraska community of 2,200 – hours from the nearest metropolitan area – recently drew 10 young professional couples to live and $ 20 million of new investment.

It could not have happened without local people taking responsibility for the future of their community. But also critical was outside support from federal and private funders, including the Kellogg Foundation.

Similar opportunities exist in Arkansas and across the nation – wherever communities can muster the necessary combination of local initiative and investment to support them. But funding is limited.

The 2007 farm bill is our chance to right the priorities. We must begin by supporting the small businesses that have been the economic backbone of small communities. One early version of the last federal farm bill proposed a $ 15 million program to provide loans, technical assistance and training to rural micro enterprise.

But in the end, the program was stripped and instead the federal government spent that much money in annual subsidies to just five mega farms. The next farm bill should resurrect the program to support rural micro enterprise.

The farm bill should also support community initiative. A Nebraska pilot program offers a model. It provides grants to communities to nurture small business, develop new leaders, engage youth and foster local philanthropy to support community development. A better-funded federal program could revitalize communities across rural America.

The next farm bill should also foster agricultural entrepreneurship. The last farm bill created a $ 40 million Value Added Producers Grants programs to help family farmers tap higher value markets and add value to their products. It has provided grants to several Arkansas initiatives. But after just one year, Congress cut most of the money to meet federal budget targets without restraining payments to mega farms.

It’s all about the money. But we do not have to choose between having effective farm programs and effective rural development programs. We just need a reasonable balance between spending on immediate income support and investment in our future. The single most effective thing Congress could do to strengthen family farms is to cap federal farm subsidies—subsidies used by mega farms to bid land away from smaller farms and drive land prices to higher levels that squeeze profit margins.

A payment cap that cut farm program costs by just eight percent would free money to more than double spending on rural development and make a ten-fold increase in support for rural small business development. It would provide rural people the support they need to shape their own destiny and restore vitality to their communities. And it would strengthen, not hurt, small and mid-size farms.

But efforts to cap mega farm payments have been blocked by southern opposition. It is critical that southern leaders come forward with alternative approaches for reducing mega farm subsidies that work in the South. If we continue the current misguided federal policies we’ll continue rural decline. But it does not have to be that way. The 2007 farm bill is our opportunity to set a new direction that offers hope for a better future to rural people and communities. It will be largely written by members of Congress from rural states, including Arkansas. It is our opportunity to shape our destiny.

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

Center for Rural Affairs
Values. Worth. Action.

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