[imgcontainer right] [img:Bendnew.jpg] [source]Retro Traveler[/source] Bend, Oregon, has reinvented itself. Once a lumber and mill town, Bend is now a tourism and retirement center. In the Mill District, old industrial buildings have been converted into an outdoor mall. [/imgcontainer]

Rural America faces four fundamental challenges.

• It is highly diverse, so “big, top-down” solutions rarely work.

This is one of the reasons that Old Ag has very concentrated distribution of benefits. A concentrated number of people in a concentrated number of rural areas may benefit, but not the majority.

•Most of Rural America (RA) is losing population, relatively and absolutely.

As increasingly the best educated and middle class leave RA, economic disparities become greater and opportunity is harder to find. Leadership is harder to come by.

• Much of Rural America is defined by what it used to be, rather than what it hopes to be.

The economic ghosts of the past are a major barrier to progress. Faulkner was thinking of a mythical rural county when he said, “The past is never dead. It’s not even past.”

• Rural areas often see themselves as separate from each other and urban centers rather than being parts of regional economic and ecological systems.

Employers, shoppers, patients, and air quality all behave in a regional context. Rural communities must do the same. Often federal and state policies make it harder for rural communities to behave regionally, encouraging competition over cooperation.

Goals for 21st Century New Rural Policy

Today, rural public policy is “…unfocused, outdated, and ineffective.” Mark Drabenstott, in “Past Silos and Smokestacks: Transforming the Rural Economy in the Midwest,” proposes a new framework:

•Help rural communities and counties think regionally to compete globally.

•Focus public investments on transforming economic opportunities rooted in distinct economic strengths, not on smokestack chasing.

•Spur innovation and entrepreneurship, turning ideas and innovations into economic progress.

•Create a world-class entrepreneurial climate and innovation culture to grow a landscape of new companies, in the process recycling the region’s considerable wealth.

But how do we get there? New rural policy must not start with Ag. It must start with a broader, more diversified vision. New Ag should not be excluded, but to start there, experience tells us, too often means we will stay there. (For the difference between New Ag and Old Ag, see Part One.)

Getting to New Rural

What would be a good list of capacities critical to developing new rural economies?

[imgcontainer left] [img:Bendoldmill.jpg] [source]Axoplasm[/source] A mill from Bend, Oregon's economic past. [/imgcontainer]

The following is meant to be a starting place for rethinking the next stage of the policy. It intentionally focuses on the capacities of rural communities rather than on particular businesses or economic sectors.

Equal Access to Core Services Federal and state policies often unintentionally discriminate against rural areas.

Since at least the Carter Administration, economy of scale has been favored in public policy over universal access. In areas like transportation, communications infrastructure, K-12 education, and healthcare, economy of scale has benefited more populated areas over less populated ones.

This pattern seems to have intensified in the Obama Administration. One example is the Administration’s primary education reform effort – Race to the Top (RTT). As Caitlin Howley pointed out in the Deesmealz, “RTT asks states to implement reforms that are difficult, if not impossible, for many rural places.”

RTT is far from the only example. The administration’s Social Innovation Fund, a recent competitive grant program, also largely ignored rural communities.

Almost none of the selected recipients were rurally based, even if they mentioned rural in their application. Similarly, Teach for America, which has been a favorite of the Obama Administration, is a largely urban program.

What this amounts to is a pattern of unintended economic segregation.

[imgcontainer left] [img:Minerwind.jpg] [source]Rural Learning Center[/source] The people in Miner County, South Dakota, took charge of their economy — and changed their future. In 2001, Howard, South Dakota, became the first municipality to own and operate its own wind turbines. This is a photo of a ceremony where the turbines were commissioned. [/imgcontainer]

Many of the urban areas that are prospering do so, in part, because of public sector investments in research universities, government subsidized transportation systems, and historically cheap energy and water moved from rural areas to urban. If rural areas do not have equal access to opportunities, government policy is maintaining or creating an uneven playing field.

Starting with federal policy, rural regions of the U.S. should be assured equal access to programs that support communities and create long-term economic opportunities.

But be clear, this is about equal access, not universal access.

Ability to Continually Create Competitive Advantage Rural communities will either learn how to create new competitive advantages or they will continue to decline and ultimately die.

Historically, communities had to create a new competitive advantage every 50 to 70 years. Since World War II, the most successful areas have shortened this cycle to 20 to 30 years. Tupelo, Bend and Miner County are examples of successful rural areas that have done this well.

Today the cycle is every 10 to 15 years, which, in reality, means that communities must be continually reinventing their economies. Urban areas and places close to major research universities and federal laboratories are at an advantage in this process — though the presence of a university does not mean that a place automatically prospers.

Many rural areas and small towns are defined by what they used to be, without a clear vision of what they plan to be. In the last 50 years, commodity-focused rural communities have largely declined while those that provide preferred quality of life have been more likely to grow as retirees and laptop professionals move to small towns with amenities, natural and community-level.

Most of our rural-serving institutions are not designed to move this fast or to develop new competitive advantages. Nor are our governmental structures.

For example, current federal commodity subsidies limit the economic competitiveness of many ag-dependent regions rather than expand it. Today, there are no federally supported and few state-funded comprehensive efforts in place explicitly to help rural areas create new competitive advantage.

The model for the 21st Century Rural Competitive Development Organization does not yet exist, but it is being created. In reality it will probably vary by region of the country. The federal government and private sector both will play critical roles supporting these efforts, but they will need to be oriented to region and to state.

The creation of this new type of institution during a time of contracting governmental resources and political inability to move beyond the status quo is a major challenge.

Making High-speed Internet Access Universally Available The current communications revolution has the potential of erasing many of the distance-based challenges of rural America, but only if public policy assures universal access to all parts of America.

Rural communities have a double disadvantage in making high-speed access universally available. The population in many rural areas tends to be older, poorer and less educated—all predictors of low utilization of the Internet, thus challenging the economics of traditional utility models.

In addition, rural areas are often lumped in with urban areas when geography and bandwidth are allocated. Most companies see more opportunity to make a return on their investment in higher density urban areas, leaving rural parts of their service areas with minimal or little access.

Federal policy should require that Internet access in rural areas be developed at the same rate as adjacent metropolitan regions or that rural utility cooperatives should be given priority when bidding occurs that includes rural regions.

The federal government should set a target date for the delivery of high-speed Internet access to all parts of the U.S., and then government agencies should make the creation of this infrastructure a high priority.

To Live or Die

In the end, rural communities that create new Economic Opportunity and Quality of Life stand a chance of prospering. Those that do not will die.

Old Rural, in many areas, has the political power to prevent government support of New Rural policies. Areas dominated by Old Rural will continue to decline, as they have for the last 50 years, and wealth will be further concentrated into fewer and fewer hands.

One can understand why the proponents of Old Rural do not want change, but their declining numbers make their claims on public resources weaker and weaker, especially in a time of budget crisis.

But the biggest challenge to the potential of New Rural may be from our increasingly urban leadership and its benign neglect of most things rural — or the mistaken notion that a new kind of agriculture will lead to New Rural economy.

(Part One of Karl Stauber’s re-envisioning of rural America can be found here.)

Karl Stauber is president and CEO of the Danville (VA) Regional Foundation.

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