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Michael Pollan on Agribusiness Populism

Saturday, October 25th, 2008

This is a near quote of Michael Pollan on NPR’s Fresh Air this week:

There is a real issue of perception of elitism, and it is one of ironies of our society that junk food being sold by multinational corporations like McDonalds and Kraft appears to be populist, and food grown by struggling, scrupulous farmers is regarded as elitist. And I think there is something wrong with this picture, that those agribusiness companies have seized the populist high ground. When you look at how that supposedly cheap, populist food is produced, it’s dependent on government handouts, it’s dependent on the brutalizing of workers and brutalizing of animals, and it suddenly appears in a very, very different light.

The discussion occurs at about 31:00 minutes into the interview.

Pollan’s comments notwithstanding, it remains the case that much of the sustainable and local food system in the U.S. supports those with solidly middle to upper-class paychecks. This has bothered me for years.

We have seen renewed food systems that we cheer come into existence in recent years, but we too often fail to acknowledge that the growing gap between the rich and the poor is precisely what has made this possible.

Who doesn’t love a Niman Ranch hog farmer? But these farmers that we love to love produce meat for high-end markets on the coasts. Certainly, this is better than producing hogs in confinement for export or growing corn for unmitigated biofuels production. But a local food system that caters to and relies upon a growing wealth disparity leaves too many of the social ills that we set out to address untouched.

That being said, Pollan, as he is apt to do, offers a concise and effective rebuttal to the “local food as elitist” argument. In fact, it is best rebuttal I ever recall having heard.

As We Sow

Sunday, April 6th, 2008

Part 1



Part 2


Part 3

Horribly depressing. Film credit.

Livestock pollution turns off young Iowans

Sunday, January 13th, 2008

I had the following oped published in today’s Des Moines Register:

Livestock pollution turns off young Iowans

BRIAN DEPEW, SPECIAL TO THE REGISTER

I recently returned from a visit to my family’s farm. While there, I was dismayed to learn that three more livestock confinement buildings are being built within 2 miles. Once complete, there will be 13 industrial livestock buildings within 3 miles of our farm. There is now at least one facility in every direction.

After growing up and attending college in Iowa, I left the state. Around the same time, political leaders in Iowa began to notice young Iowans leaving in droves. They wondered out loud: What can be done to keep our best and our brightest in the state? In 2005, legislators floated a plan to exempt Iowans under 30 from state income taxes. Then last year, the Legislature commissioned “Generation Iowa” to ponder the problem further.

But tax breaks and task forces will not help Iowa overcome the problems it faces. Today’s young adults are moving to places with vibrant natural resources, thriving communities and healthy economies. But for two decades Iowa’s leaders have sat silently while a corporate system of animal agriculture planted itself firmly in the state, undermining these crucial amenities. Our leaders are evading this issue and ignoring the barrier that large confinement operations create to a prosperous future.

Political leaders in Iowa have uncritically embraced the industrialization of animal agriculture and by doing so have contributed to the ongoing decline of family farms and rural communities. Iowa’s leaders took it a step further by ensuring that Iowa citizens have no recourse against the environmental destruction industrial livestock facilities sow upon the state.

I have some advice for the Generation Iowa Commission, due to report to the governor and Legislature on Jan. 15. If Iowa is serious about keeping young people in the state, it should work first to stop, and then reverse, the rise of large confinement operations. By destroying the economic and social fabric of rural Iowa and degrading the environment of the state, confinement facilities make returning to Iowa undesirable.

With palpable air pollution and undeniable water pollution, the environmental strife is easy to see. With fewer family livestock producers, rural communities are left without a vital sector of economic activity. As farm families leave the countryside, rural communities face the challenge of keeping afloat critical social infrastructure such as schools and government services. No young Iowan wants to return to a dying community or a polluted state.

For more than a decade, Iowa Democrats have run on a promise to clean up this mess. After taking charge last year of all three branches of state government for the first time in 40 years, they largely capitulated on this issue. They must do better in 2008.

Iowa cannot afford to lose another generation of young people to the allure of other states, and rural Iowa cannot afford to lose its next generation to the allure of the big city. The state must fiercely protect its resources and amenities from those looking to make a quick buck off the back of the state’s long-term viability.

Like others born and raised in the state, I would like to return one day, but I am loath to the idea of returning to a state overrun by an environmental, economic and socially detrimental livestock industry.

BRIAN DEPEW lives in Lyons, Neb. He grew up in Laurens and was the Green Party candidate for Iowa secretary of agriculture in 2002. He works for the Center for Rural Affairs, but these thoughts are his own.

Beyond Agriculture

Monday, September 10th, 2007

In our next post, Iowa Senator Tom Harkin will write about his hopes for the 2007 Farm Bill. A story in yesterday’s Des Moines Register offers some policy-context to parts of his post.

Talk of agriculture often dominates discussions about the farm bill, but yesterday Philip Brasher wrote about another sort of battle brewing in the debate over the 2007 Farm Bill.

Brasher: Harkin prepares push for rural development

A battle could be brewing between the House and Senate on an issue that seldom gets much attention in Congress - rural development.

The chairman of the Senate Agriculture Committee, Sen. Tom Harkin, is preparing a series of rural development proposals, including funding for water and sewer improvements, venture capital and even child-care centers, that would increase federal spending by $2 billion over the next five years.

The farm bill that passed the House this summer had relatively little new money for rural development programs. [Snip…]

A mandatory program must be included in the federal budget each year. Spending for other rural development programs in the House bill would be left to the discretion of congressional appropriations committees.

By contrast, all of the $2 billion in new rural development money that would be in Harkin’s legislation would be designated as mandatory spending, according to his staff, which provided a description of his plans.

“We need to help communities help themselves to create quality jobs and an improved quality of life,” says Harkin, D-Ia.

Harkin’s proposal provides money for rural water and sewer systems which currently face a large funding backlog. It also includes money for constructing and maintaining rural hospitals, assisted-living facilities and child care facilities.

The proposed legislation designates $100 million for microenterprise loan programs for people looking to start a new rural businesses, and $200 million over five years for value-added grants.

These are important programs for rural America, and critical after years of farm consolidation and rural out-migration driven by unlimited farm payments in the Commodity Title of the bill. But the fight won’t be easy.

Republican-led Congresses repeatedly nicked several rural development programs that were authorized in the 2002 farm bill, including the value-added grants and Internet loans. (This is the reason the House Agriculture Committee’s chairman, Rep. Collin Peterson, D-Minn., gave for not putting more mandatory spending into rural development this year.)

Harkin has allies in the Bush administration for at least some of his ideas. In threatening to veto the House farm bill, the White House specifically cited the lack of funding for rural hospitals and infrastructure, among other reasons.

I will be watching the debate unfold, and hoping Harkin holds out for a full $2 billion in mandatory rural development spending in the 2007 Farm Bill.

As Wal-Mart Stock Rises, Rural America Falls

Saturday, August 4th, 2007

Before you catch yourself nodding in agreement with that title I have to warn you, Jim Branscome doesn’t agree:

[T]he reality of what really drives the rural American economy is Wal-Mart and the 39 other companies in the Yonder 40.

But perhaps I should back up and explain how we got to this point in the debate before I offer my full rebuttal of Jim’s claim. About a month ago the Daily Yonder asked Jim Branscome to come up with an index of stocks that represent the economic well-being of rural America. In unveiling the resulting Yonder 40, they proclaimed:

Finally, there’s a stock index that tells rural America how it’s doing. This is the Yonder 40, forty companies that reflect the economy of rural America.

It is an interesting idea, but there is a slight problem. It seems that a number of the companies selected for the Yonder 40 are companies whose interests and goals actually stand squarely at odds with the well-being of rural American - be it economic or otherwise. I first expressed this in a comment posted at Daily Yonder:

What does the Yonder 40 tell us?

This is an interesting idea — an economic indicator of the relative health of rural America. But what will we really know when the Yonder 40 soars, and when the Yonder 40 falls? With stocks like Wal-Mart, Tyson, Smithfield, Monsanto, and ConAgra included in the index, the economic health of rural America might in fact be measured as an inverse of the Yonder 40.

When Wal-Mart is doing well, businesses up and down main street in rural communities are being driven out of business. And when Wal-Mart is doing well money is being sucked out of rural communities, destined for the pockets of rich urbanites.

When Smithfield is doing well, farmers aren’t receiving a fair price for their livestock. And when Smithfield is doing well, family livestock producers are being put out of business. And so it goes for a number of the stocks in the Yonder 40.

So, what does the Yonder 40 really tell us?

To the credit of the editors at the Daily Yonder, they picked up on my comment, and repeated the question in a follow-up post about their stock index. They also went back and asked creator of the index, Jim Branscome, to respond to my concern about the reliability of concluding that when Wal-Mart (and other companies in the index) are doing well, rural America is doing well. This drew a response from Jim:

None of us may like it and would love a stock index that reflects the hard work of the small farmer and throws in the sweet smell of alfalfa drying in the windrow, but the reality of what really drives the rural American economy is Wal-Mart and the 39 other companies in the Yonder 40. [snip]

We sorted through about 3000 stocks before we selected the sainted 40. It would have been nice had we come across investable public companies that represent farmer cooperatives, rural electric co-ops, or worker-owned coal mines and sawmills. There ain’t none. No fan of the Daily Yonder may be comfortable with it, but the reality is that Thomas Jefferson’s vision of America as a nation of farmers and toilers in the soil is as dead as our third president. Or at least that’s what you find when you try to construct an index using SEC registered and stock exchange listed companies for rural America.

Had we tried somehow to value the private companies that deal with rural America, impossible as that probably is, we would also have had to list Cargill and Koch Industries and the Chicago Board of Trade as well as the little bitty businesses that dot our small towns.

While briefly lamenting the downfall of the small farmer, the farmer cooperative, and the locally owned sawmill, Jim stands by his original assertions. He further asserts that the stock price of companies like Wal-Mart, Smithfield and Monsanto are a representative corollary to the economic well-being of rural America. I feel the need to further explain my objection.

In outlining my objection, I will stick with Wal-Mart as an example. However, my objection is not about Wal-Mart per se, and the argument can be easily extended to Smithfield, Monsanto, or a number of the other companies that comprise the Yonder 40.

A shuttered building on Main Street in Lyons.

If you walk down Main Street in Lyons, Nebraska (population 960) where I live it doesn’t take long to start to understand the result of the Walmartization of rural America. A solid 50% of the buildings on Main Street are simply closed, boarded up or vacant. With a lack of economic activity on the street, even some remaining businesses are open sporadically at best. A few can still be counted on to be open every day, but of those, one often wonders how they manage to stay open and how many more years they will hang on for.

It hasn’t always been this way. But ever since Wal-Mart began their concerted campaign to infiltrate rural America, and stake their business model on gobbling up an ever-increasing share of rural retail activity, small businesses up and down Main Street in Lyons and small town streets like it across the country, have been shuttering their doors (pdf). Every time one does it means a loss of local jobs and local economic activity. These are losses that often have ripple effects throughout a community. Wal-Mart is most often located in a nearby mid-sized town, and even if one does drive to Wal-Mart to work, the jobs don’t pay what the local jobs did. To add insult to injury, Wal-Mart’s profits are wired to Arkansas at the close of business every day. With them goes the multiplier effect of money spent locally.

In short, this is to say, when Wal-Mart does well rural America does poorly. But let’s look at some numbers too.

From 1990 to 2000 Wal-Mart stock rose from an adjusted daily close of $6.45 per share to $53.31 per share. That is an 8-fold increase. Following the logic of the Yonder 40, this should be an indication of rising prospects for rural American during the same time period. But rural America did not fair quite so well during the 1990s.

Swept Away, a study done by Jon Bailey at the Center for Rural Affairs, reports that while per capita earnings for metropolitan counties in the states studied rose steadily between 1990 and 2000, rural farm and rural non-farm per capita earnings were essentially stagnant in real dollars. At the beginning of the decade, the average person in rural farm counties earned 58 cents for every dollar earned by the average person in a metropolitan county. But by 2000, the average rural farm county resident earned only 48 cents for every dollar earned by a metropolitan county resident. During the same time period, metropolitan counties also saw a job growth rate of 25%. Rural farm counties experienced job growth at a rate just 1/5 of metropolitan counties.

In the 10 year period in question Wal-Mart stock doubled, and then doubled, and then doubled again. However, for every year of that period, rural America slipped further and further behind the earnings and job growth of their fellow metropolitan residents. During this time period rural America also continued to lose population, watch the number of farmers decline, and watch the younger generation depart for the city.

So, there does not in fact seem to be a positive correlation between Wal-Mart’s stock price and the overall economic health of rural America. While I use Wal-Mart as the focus of my rebuttal, I will stand behind my argument in reference to the entire Yonder 40 index.

In his response to me, Jim Branscome also counters my critique by arguing that the companies in the Yonder 40 were used in part because there are a limited number of publicly traded companies to choose from. Home-grown businesses that might actually tell us something about the economic prospects of rural America aren’t traded on the big stock exchanges. However, that is not a reason to argue that the companies that do comprise the Yonder 40 are positively related to the economic fortunes of rural America. If anything it reveals a crack in the methodology behind using a stock index to measure the economic health of rural America. At the end of the day, I would actually argue that this is close to the truth. I doubt there are very many companies that are traded publicly that have a positive correlation with the economic (and social) health of rural communities.

All that being said, I think we should keep the Yonder 40. That might seem like a strange conclusion, but I think it does tell us something.

When Wal-Mart’s stock goes up, another small business that was the life-blood for a rural community somewhere will shutter its doors. When Monsanto’s stock goes up, you can count out another family farmer whose children would enroll in rural school struggling to maintain enrollment. And when Smithfield’s stock goes up, you you can bank on more environmental degradation from large livestock facilities - degradation that has a negative environmental, social and economic impact for rural communities.

That is to say, when the Yonder 40 soars we best expect troubled times ahead for rural America.

Whole Foods, Empty Promises

Saturday, July 14th, 2007

Long time readers know I’m no fan of corporate behemoths, and have no confidence in the idea that what a rural community needs to prosper is another Wal Mart, another large livestock facility, or a corporate dump.

For similar reasons, I don’t put much faith in Whole Foods’ recent promise to do more to support local farmers - an effort that would only slow the trend to corporatize the natural food market, not stop it. This week we got another reason to think Whole Foods will not be inclined to crusade for justice on any front as long as CEO John Mackey is in charge.

By now you’ve probably heard, Whole Foods CEO, John Mackey, spent much of the last two years posting anonymous diatribes online in an ongoing effort to paint his chief competitor, Wild Oats, in a negative light. Read the original story at the Wall Street Journal.

I want to draw attention to one of Mackey’s posts in particular - the one in which he talks of his love for Wal Mart, his disdain for labor unions, and his apparent dislike for anyone who might claim to be a victim of sexual or racial discrimination. Mackey writes:

Wal-Mart was just named the most admired company in America (also by Fortune Magazine — that magazine which obviously hates “working people”). I probably admire Wal-Mart more than any other company in the world (except for maybe Whole Foods!). What a great, great company! Wal-Mart has single handedly driven down retail prices across America. They have improved the standard of living for millions and millions of American people. Also Wal-Mart is crushing the parasitical unions across America. I love Wal-Mart! Damn straight that they should be on this list. Sexual discrimination lawsuits? Sexual harrassment lawsuits? Racial discrimination lawsuits? What company doesn’t have those? The Trial Lawyers (the richest professional class in the United States and the largest contributors to the Democratic Party — even bigger than labor unions which are #2) sue Wal-Mart. They sue Whole Foods Market. They sue every business which makes any money. They are probably even a bigger threat to our country than labor unions are (if that is possible?).

For Mackey, an interest in the all-mighty dollar trumps workers rights and pesky discrimination lawsuits. Mackey’s love for Wal Mart, which relies on boatloads of imported merchandise, legions of poverty-stricken workers, and clear anti-competitive practices, leaves one wondering.

Just how serious can Whole Foods possibly be about helping small, local farmers?

Hat tip: Tom Philpott at Gristmill

Let There Be No Doubt

Wednesday, July 11th, 2007

The Farm Bureau supports unlimited commodity subsidies — subsidies that help the nation’s largest farms drive family farmers out of business. Responding to a draft version of the 2007 Farm Bill, the Farm Bureau said in a press release:

While Farm Bureau was pleased there are no cuts to payment limits in the proposal, the organization will watch the debate closely in the future. “We recognize that the farm bill debate is far from over and that changes are likely in the coming weeks,” said Stallman. “Farm Bureau will be particularly watchful of changes to payment limitations and adjusted gross income caps.”

In so doing, Farm Bureau is protecting the interests of these “farms.”

Rank Farm Businesses Location 2003-2005
1 Balmoral Farming Partnership Newellton, LA $7,908,563
2 Phillips Farm Yazoo City, MS $5,893,194
3 Due West Glendora, MS $5,417,792
4 Kelley Enterprises Burlison, TN $4,933,845
5 Walker Place Danville, IL $4,627,034
6 R A Pickens & Son Company Pickens, AR $4,307,636
7 Dublin Farms Corcoran, CA $4,286,864
8 Morgan Farms Cleveland, MS $4,192,828
9 Perthshire Farms Gunnison, MS $4,161,420
10 P G C Farms Brinson, GA $4,157,017

The Farm Bureau has long claimed to be the “largest farmer-member organization” in the country, but when it comes to Farm Bill politics, they are a lobby for the interests of large agribusiness. Supporting $8 million subsidy checks is no way to be a friend of the farmer.

With their support for unlimited subsidy checks, Farm Bureau is helping to drive the continued consolidation of agriculture. I’m sure their lobbyists in Washington talk a good line about supporting farmers, but in the countryside the devastating effects of the agricultural policy they help write is clear.

Restoring Rural Roots

Monday, July 9th, 2007

by Steph Larsen

In a recent trip through the small town of Walthill, Nebraska, the phrase “rural revitalization” took on a whole new meaning. In this case, it was the lack of any kind of prosperity that made it obvious to me why rural communities are in need of revitalization. Main Street looked painfully deserted, with two recent arsons adding fresh scars to the once-active storefronts. As we drove around the residential area, most houses looked to be in some state of disrepair—so much so that it was difficult to really tell which were homes and which had already been abandoned. If ever there was a town that needed some life breathed back into it, this was it.

About the same time, I read an article about the aging farmer population and the simultaneous difficulty of young and beginning farmers breaking into farming. This from John Seewer from the Associated Press:

So many American farmers are working longer than ever before that one in four is at least 65 years old. [snip] Within the next decade those older farmers will be looking for someone to take over their operations and selling millions of acres of land.

Much of that land will be merged into bigger farms with fewer people working on them. Rural communities will lose even more young people, and a few will struggle for survival. [snip]

“Some of those communities will survive, but the nature of the community will change,” said Lori Garkovich, a rural sociologist at the University of Kentucky. “Studies have shown that industrial farms change communities in many ways.

Todd Stewart, who raises hogs and cattle near Meadow Grove, Neb., and at 47 is among the youngest farmers in the area, said it’s hard to find volunteers who will coach ball teams or help out at church anymore.

“Towns are hurting,” he said. “The school is usually the first to go, then it’s the churches and then the town. There’s going to be a lot of towns that will wither up and go away.”

Communities need people, of course, but vibrant, sustainable rural communities need people of all ages so that the infrastructure that makes a town strong—schools, churches, local businesses—are able to thrive. Farmers are a significant part of this equation, and being able to recruit young people into farming will only help to strengthen the communities in which they live.

In my last post, I talked about local ownership as a key component if rural communities will see any substantial benefit from the ethanol boom. It is clear, however, that it takes more than money to reinvigorate a community. Another component to this push for revitalization is to renew demand for the institutions that have been weakened as farms consolidated. The aspiring farmers I know are typically energetic folks who choose to come back to the land, and will greatly add to any community if only they can access the things they need to start farming.

Not coincidentally, I think about this as legislators in Washington, DC are writing the next Farm Bill. There is a lot of debate about the future of the commodity title and the need to increase money for nutrition and conservation, but often rural development seems to be thrown in as an afterthought—as if legislators know that it’s a good thing to say but think there isn’t enough political will to put their money where there mouths are.

Why aren’t rural voices demanding more from their legislators?

There clearly have been some voices, though I would argue not nearly enough. The 2002 Farm Bill included some promising provisions that help rural communities, including the Beginning Farmer and Rancher Development and the Value Added Producer Grant Program (VAPG). The former was in the 2002 Farm Bill but did not receive funding from 2002-2007, while the later usually received between $15 million and $20 million dollars annually, or about one-third to one-half of the money it was slated to receive.

The draft of the 2007 Farm Bill was just released in the House by Chairman Collin Peterson, and while these two programs are funded at $15 million for Beginning Farmer and Rancher and $20 million for VAPG, legislators will need to hear from their constituents in order for these numbers to remain strong.

A welcome addition to the 2007 draft is the Rural Entrepreneurs and Microenterprise Development program, which would provide technical assistance and loans for starting a rural business. However, unlike the other two programs I mention, a slight technical difference in the language for the Microenterprise program means there’s no guarantee it will see a dime.

Rural communities aren’t receiving fair treatment in federal legislation, which is slightly ironic considering that it’s the Farm Bill, and most farming occurs in rural areas. This bill is a great opportunity to push for the rural revitalization that legislators keep promising—not with haphazard handouts but with strategic investments that assist new, resourceful, innovative farmers establish new roots and bring young people back to rural communities.

Why is the League of Rural Voters Shilling for Corporate Interests?

Saturday, July 7th, 2007

The League of Rural Voters is going to bat to support the proposed merger between the only two satellite radio companies - Sirius and XM. I wrote about this puzzling dynamic at some length a few weeks ago. You can read that analysis here.

After I first wrote, the League of Rural Voters issued an additional press release and a report on the merger (pdf).

The report seeks to rebut the argument that the proposed merger between Sirius and XM is similar to the proposed merger between satellite television providers Echostar and DirectTV. The FCC rejected that merger citing concerns over a lack of competition, consumer choice, and diversity of viewpoints in the market. In the latter half of my original post on this topic, I wrote about the rejected Echostar/DirectTV merger and its relation to the proposed Sirius/XM merger.

Quite aware of the argument against their position, the League of Rural Voters wrote the following in their press release:

League Of Rural Voters: SIRUS/XM merger is not ECHOSTAR/DIRECTV

The League of Rural Voters (LRV) today released a new analysis drawing clear differences between the DBS [Direct Broadcast Satellite] market in the 2002 Echostar/DirecTV attempt to merge, and the expanding, competitive audio entertainment market in the SIRIUS/XM merger. In doing so, LRV reaffirmed its support for the proposed merger between SIRIUS Satellite Radio (Nasdaq: SIRI) and XM Satellite Radio (Nasdaq: XMSR).

The press release links to a five page report (pdf) on the League of Rural Voters’ website. The report, with the League’s logo stamped on the front, sets out a point-by-point argument to show how the Sirius/XM merger is “A Fundamentally Different Merger for Rural Consumers” than the proposed Echostar/DirectTV merger was. The report takes up the FCC’s reasons for rejecting the satellite TV merger and offers a brief narrative in response to each to show that “Such concerns do not apply to satellite radio.”

I am not going to do a detailed analysis of the report right now. I will say this though, it certainly does not read like a report that vigorously examines the issue, and then draws a conclusion based on sufficient evidence pointing in one direction. Rather, it summarily dismisses each point from the Echostar/DirectTV case with very little real analysis of the issues at hand. But I want to leave the conclusion of the report aside for now. There are more interesting things going on here.

Of primary interest to me at this point is why the League of Rural Voters cares so much about this issue. The League has published a grand total of of 5 press releases since October of 2006, and two of them have been about their support for the Sirius/XM merger. They only list one other report on their website. This is not a group that runs around issuing press releases and reports on everything under the sun of possible interest to their cause. The League’s support of the proposed satellite radio merger represents a significant part of their work this year.

So, why satellite radio? The question simply baffles me. It is a Farm Bill year, after all. The Farm Bill is arguably the piece of legislation of most interest to rural issues, and it only comes up for debate and changes once every five years. One might think the Farm Bill would be of interest to the League of Rural Voters. However, on their website they have only a “Coming Soon” message on their 2007 Farm Bill page. Why does the League of Rural Voters feel compelled to spend time fighting to allow a merger of Sirius and XM radio, but lack the time to develop even a single page on their website about the 2007 Farm Bill?

But it gets even more interesting.

The LA Times ran an excellent opinion piece on the proposed merger and the role of interest groups in the process. While the whole story is quite interesting, the final paragraph is the kicker for us tonight.

Sirius, XM and American values

Got a big business deal in the works? Start lining up interest groups.

Worried about the proposed merger between the XM and Sirius satellite radio services? So are more than 70 members of Congress, Consumers Union, the Consumer Federation of America and the American Antitrust Institute, among other groups.

The article goes on to discuss this phenomena — whenever regulators are set to make an important and controversial decision, a “swarm of advocacy groups representing a rainbow array of ethnic groups, regional interests and other constituencies” emerge out of the woodwork to comment.

Some of them weigh in on their own accord. For example, Consumers Union and Consumer Federation routinely take positions on mergers involving telecommunications services (and, typically, oppose them). But other groups step up to the microphone at the behest of parties most affected by the government’s action. It’s become part of the game: If you want the Federal Communications Commission (FCC) to bless your merger, as XM and Sirius do, you line up as many grass-roots allies as you can. Your opponents do too.

[snip]

Given the stakes involved, it’s not surprising that the process has been abused. [snip] There’s also the practice of pouring money into supposedly independent research groups, then trotting out studies that, amazingly enough, support their benefactors’ point of view.

[snip]

[Grassroots groups have] also helped XM and Sirius advance an argument that the publicly traded services can’t make themselves: that the two companies are too weak to survive as independent entities.

That’s one of the points made by the Minneapolis-based League of Rural Voters, which joined the debate at the behest of XM and Sirius. It released a report last week that argued the merger was fundamentally different from the proposed merger of satellite TV providers DirecTV and EchoStar, which the FCC unanimously rejected in 2002. Niel Ritchie, the league’s executive director, admitted that “the XM guys did this particular study,” but he said he agreed with its conclusions and was happy to put it out under the league’s banner.

Well now. The League of Rural Voters didn’t find their interest in satellite radio on their own. They entered the debate at the “behest of XM and Sirius.” And that not-so-balanced report (pdf) published by the League of Rural Voters was actually written by the corporate interest under scrutiny for their proposed merger. I double and triple checked. There is nothing in the report that indicates any authorship other than the League of Rural Voters.

I’ll leave it there for tonight. You all can draw your own conclusions from those last pieces of information.

Lies The Economist Told Natasha

Monday, June 11th, 2007

Natasha over at Pacific Views has a great post up on the Economist and the business of agriculture. She starts with a quote from the Economist article:

… This special report will examine how climate change is affecting business, and how business can affect climate change. It will concentrate on industrial emissions rather than on agriculture and deforestation (which produce lots of carbon dioxide without involving business much) but will leave out air travel, on which this newspaper will publish a special report in two weeks’ time.

Then the fun begins for Natasha:

Pardon? Agriculture … doesn’t involve business much? My cranial hamster wheel wobbles on its very axis; it threatens a total derailment. Are these people stupid, lying, deranged, or merely hard toking the hash that’s been flooding Europe since the US invasion of Afghanistan? Maybe they decided to write the preface to this special report during their annual editorial off-site in Amsterdam. I am not qualified to say with certainty which explanation is correct, but as you can see, my suspicions in this regard run towards the lurid.

Read the full post over at Pacific Views. Natasha is right. Agriculture today is increasingly, and in many countries solely, about business.

Natasha offers somewhat regular agriculture commentary. She should write about agriculture more often though.

Satellite Radio Merger: Differing Rural Perspectives

Sunday, June 10th, 2007

A recent press release by the League of Rural Voters left me scratching my head:

League of Rural Voters Adds its Voice and Support for Sirius/XM Satellite Radio Merger
May 31, 2007

SIRIUS/XM SATELLITE RADIO MERGER CRITICAL TO GROWTH AND DEVELOPMENT OF RURAL COMMUNITIES
Minneapolis, MN - The League of Rural Voters urged the Federal Communications Commission (FCC) to approve the merger between XM Radio (Nasdaq: XMSR) and SIRIUS Satellite Radio (Nasdaq: SIRI), noting that the combined entity would offer listeners in rural communities more programming options at lower prices than those currently available from the two companies separately.

“In many rural areas throughout America, commercial radio reception can be extremely limited. Satellite radio has offered listeners in rural areas a robust alternative with hundreds of specialized channels that meet the programming needs of rural America,” said Niel Ritchie, the League’s Executive Director.

Consolidation of the commercial, over-the-air radio industry over the last decade has left much of rural America behind in recent years, as locally-owned stations are replaced with corporate conglomerates producing homogenized content with so-called local news and weather delivered from offices hundreds of miles away.

So, the League of Rural Voters is voicing support for the consolidation of the satellite radio industry to help deal with the negative impacts of consolidation of over-the-air radio stations.

Huh?

Of course, there is the line that you expect to hear from the executives at Sirius and XM. Only it’s right there in the League of Rural Voters press release:

[T]he combined entity would offer listeners in rural communities more programming options at lower prices than those currently available from the two companies separately.

Isn’t that what all companies who want to merge say? This merger will allow us to combine our efforts to bring more (insert product or service) to consumers at a lower cost.

Senator Herb Kohl (D-WI) agrees. On May 23, 2007 Kohl wrote a letter to the Justice Department and Federal Communications Commission urging them to block the proposed merger. Kohl is the chairman of the Senate Judiciary Committee’s Antitrust, Competition Policy and Consumer Rights Subcommittee, which held a hearing earlier this year to examine the XM-Sirius merger. In a letter to regulators, Kohl wrote:

I have concluded this merger, if permitted to proceed, would cause substantial harm to competition and consumers, would be contrary to antitrust law and not in the public interest, and therefore should be blocked by your agencies.

As you know, XM and Sirius are the only two providers of satellite radio service in the United States. If satellite radio is considered to be a distinct market, this merger is to a two to one merger to monopoly and should be forbidden under the antitrust laws. If satellite radio is a separate market, the combined firm will have the ability to raise price to consumers, who will have no choice to accept the price increase. Such a result should be unacceptable under antitrust law and as a matter of communications policy. [snip]

The merger’s proponents, however, argue that new technologies will in the future create competitive alternatives. However, only new entry that is “timely” is properly considered to be a competitive alternative under antitrust analysis. “Timely” means likely to be on the market within the next two years. No new technology satisfies this requirement. [snip]

In addition, the parties concede that, due to the enormous capital expenditure running into billions of dollars for new satellites, as well as the regulatory difficulties in obtaining new spectrum licenses, the parties concede that the entry of a new satellite radio service is unlikely. [snip]

In sum, because this merger will result in a satellite radio monopoly, it will violate section 7 of the Clayton Act which forbids any merger or acquisition when “the effect of such acquisition may be substantially to lessen competition, or tend to create a monopoly.” Elimination of the head-to-head competition currently offered by XM and Sirius leaving only a monopoly satellite radio service will likely result in higher prices and poorer service being offered to consumers. Satellite radio is a unique service for which none of the other audio services is a substitute. Uncertain promises of competition from new technologies tomorrow do not protect consumers from higher prices today. The antitrust laws should not countenance such a dangerous outcome. I therefore urge the Justice Department to bring a legal action to block this merger.

Further, because of the likely harm to competition and consumers, we believe this merger is not in the public interest, and we likewise urge the FCC to deny approval to this merger under the Communications Act. Nor has there any basis demonstrated for the FCC to eliminate its rule — first promulgated when satellite radio was licensed in 1997 — that there be at least two licensees for satellite radio.

I therefore urge that both of your agencies take all necessary actions to deny approval of this merger and prevent the creation of this satellite radio monopoly.

That last point in bold above warrants further explanation. When satellite radio came about in the late 1990s the FCC created two spectrum slots for two independent license holders. The argument used at the time was that two licensees holders in the satellite radio market would provide an “an incentive to diversify programming.”

I want to return to the to the position of the League of Rural Voters though. Unless Sirius and XM are both in danger of imminent and complete collapse, and a merger in particular is the only way to ensure that satellite radio in some form can continue, I don’t really understand the position of the League. Furthermore, I can’t find anyone claiming that such imminent demise awaits either (and certainly not both) Sirius and XM.

The argument that is advanced in the League’s press release is that a merged company will offer more programming options at a lower price. This runs counter, however, to the original intention by the FCC of creating spectrum space for two satellite radio companies to ensure a diversity of programs and a competitive market to keep prices in check.

I don’t think the FCC is likely to forget their reasoning, and I offer their recent rejection of the EchoStar Dish TV and DirectTV merger as a clue to what their opinion of the Siruis and XM merger will be.

The merger would create the largest satellite television company, merging EchoStar’s Dish Network with Hughes’ DirectTV. The companies claimed that the merger would help them compete better with cable and would make it more feasible for them to carry local television broadcasts.

But the FCC rejected these claims. In most urban areas of the country, the number of pay television competitors would drop from three, including the local cable franchise, to two if the merger were approved, the FCC said. And in many rural areas, the combined satellite company would have a monopoly on paid television services.

Having such little competition would actually decrease the incentive for the combined satellite television company to offer local programming, the FCC said.

“Such a loss of competition is likely to harm consumers by eliminating an existing viable competitor in every market; creating the potential for higher prices and lower service quality; and negatively impacting future innovation,” the FCC said in a statement.

A government regulator doing their job to keep corporate powers in check while watching out for the common consumer. How refreshing.

A merger of Sirius and XM would almost certainly guarantee a permanent monopoly in the satellite radio business. Therefore, lacking compelling reasons to think otherwise, I am inclined to err on the side of a competitive marketplace when determining what will be best for consumers.

Farm Labor Movement

Tuesday, May 29th, 2007

The movement for a fair and just agricultural and rural policy and the movement for fair and just labor policy are both close to my heart. For that reason, agricultural labor movements, and the history of the agricultural labor movement is of particular interest. A guest post on Ethicurean last week offers a good primer on the history of the farm labor movement in the context of the current immigration debate.

Quick! The history of U.S. policy on farm labor in 60 seconds. During and after World War II, U.S. workers shift out of farming and into industrial jobs. Agricultural producers mobilize to persuade the government to help find workers. In 1951, Congress passes a law creating the Bracero guestworker program, which allows producers to “import” Mexican workers legally for seasonal jobs and send them home afterward. (Bracero means “farm worker.”) In addition to tying migrants to one employer, Bracero contracts establish standards for housing, pay, and the guarantee of work that are lower than those applied to U.S. workers. The President’s Commission on Migratory Labor provides this assessment of the situation in a 1951 report: “We depend on misfortune to build up our force of migratory workers, and when the supply is low because there is not enough misfortune at home, we rely on misfortune abroad to replenish the supply.”

Honesty in government — a real breath of fresh air, no?

Fast-forward to the 1960s. The Bracero Program has become the focal point for organizing by the United Farm Workers (UFW) union, which charges that it undermines domestic labor conditions and drives down wages industry-wide. The opposition kills the program in 1964, and the farm labor market tightens. The UFW launches campaigns against the use of undocumented workers as strike-breakers and wins concessions for unionized workers requiring rest periods, clean drinking water, and the provision and use of protective clothing during pesticide application. By 1973, the UFW represents 67,000 workers on California farms producing grapes, lettuce, strawberries, and other specialty crops.

But the UFW’s heyday is short. The networks established during the Bracero era between communities in Mexico and the United States are strong, economies in Mexico and Central America are weak, and the rate of undocumented migration surges. UFW wage strikes in the late ’70s and early ‘80s don’t gain many friends among producers, who turn to the growing pool of undocumented workers instead. By 1983, the number of UFW contracts has dropped from a high of 180 to fewer than 20.

In the ’80s, a weakened UFW decides to switch gears and help undocumented workers become legal immigrants so they can join and support the union. They’re stymied by two factors: first, employers use the threat of job termination to keep workers from even talking to the union, and second, when workers do manage to gain legal status, they typically leave the farm sector for better-paying positions in other industries. They’re replaced by newly arrived undocumented migrants — and the UFW is back to where it started.

And that brings us to today.

Read the rest at Ethicurean

Biofuels: Boon or Bust?

Sunday, April 15th, 2007

by Steph Larsen

Biofuels are clearly getting a lot of attention lately, and some speculate that ethanol and biodiesel will bring much needed income and spur revitalization in rural communities. Ethanol might be good for the price of corn at the moment, but it looks like it’s not going to be helping residents of rural America as much as one might think. From the Omaha World Herald:

“The EPA on Thursday substantially relaxed air pollution standards for plants that manufacture ethanol for fuel, eliminating one of the major hurdles to plant size.

“The rule will allow plants to generate two-and-a-half times more of certain types of air pollution before they face regulation. Included are particulates, volatile organic compounds and sulfur dioxide. The change also exempts some emissions from being counted toward the limit.

“Critics condemned the change as unnecessarily increasing the risk to public health. Supporters say the change represents a more balanced, fair approach to regulation that allows industry to take advantage of the economies of scale.”

“Fair” by these new standards means that the people who live near ethanol plants are the ones who may suffer more problems with asthma and other diseases caused by increased air pollution. The rule change came about because plants making ethanol for food or alcohol could pollute 250 tons, while those making ethanol for fuel could pollute 100 tons. With this decision, the EPA is choosing to prioritize the interests of corporate ethanol producers by allowing plants to pollute at the higher level, at the expense of public health and the environment.

It’s true that biofuel companies have the potential to bring income into struggling communities, except that chance for revitalization is lost when those companies choose to relocate to urban centers. From the Des Moines Register:

“Biodiesel company Renewable Energy Group Inc. says it is considering a plan to relocate its corporate headquarters to Ames. ‘The company, now based in Ralston, in Carroll County, plans to relocate to central Iowa as part of plans to grow from its current 70 employees to 300 by 2010,’ said spokeswoman Alicia Clancy.”

“Clancy said Friday that a move would help in the company’s expansion plans, strengthen its ability to recruit workers and improve operational efficiency. Relocating to Ames would put the company closer to research partners at Iowa State University and business partners including the construction and engineering company Todd and Sargent.”

Ralston had a population of 98 in 2000, and estimates projected that number to decrease even further. 230 new jobs would certainly go a long way to encourage growth and attracting new residents to Carroll County, and their business partners in Ames are only 50 miles away, hardly far by Midwestern standards.

Biofuels could be a valuable asset for rural areas, but only if jobs and profits aren’t exported to urban centers. In addition to existing incentives for biofuel production, there should be incentives for local ownership in order to capture the full benefit for struggling communities.

Hillary’s Wal-Mart History

Saturday, April 7th, 2007

Hillary Clinton was in Iowa this week courting rural caucus voters. From the Des Moines Register:

Fort Madison, Ia. - Democratic presidential candidate Hillary Clinton introduced her campaign to rural Iowa Monday… promoting her agenda as the same as small-town America’s.

“There’s a lot we can do, and obviously we need a new goal of revitalizing the rural economies of America,” the New York senator told about 200 southeast Iowans.

I wonder if her plan for revitalizing rural economies involves her old ties to Wal-Mart. Excerpts from a 2000 Village Voice article:

Twice in three days last week, Hillary Rodham Clinton basked in the adulation of cheering union members. Her record of supporting collective bargaining, however, is considerably worse than wobbly.

Pity the thousands of unionists at last Tuesday’s state Democratic convention who chanted her name… They would have dropped their forks if they had heard that Hillary served for six years on the board of the dreaded Wal-Mart, a union-busting behemoth. If they had learned the details of her friendship with Wal-Mart, they might have lost their lunches.

She didn’t mention Wal-Mart… As she was leaving the dais, she ignored a reporter’s question about Wal-Mart, and she ignored it again when she strode by reporters in the hotel lobby.

But there are questions. In 1986, when Hillary was first lady of Arkansas, she was put on the board of Wal-Mart… So what the hell was she doing on the Wal-Mart board? According to press accounts at the time, she was a show horse at the company’s annual meetings when founder Sam Walton bused in cheering throngs to celebrate his non-union empire, which is headquartered in Arkansas, one of the country’s poorest states…

It’s no surprise that Hillary is a strong supporter of free trade with China. Wal-Mart, despite its “Buy American” advertising campaign, is the single largest U.S. importer, and half of its imports come from China…

During her tenure on the board, she presumably helped preside over the most remarkable growth of any company until Bill Gates came along. The number of Wal-Mart employees grew during the ’80s from 21,600 to 279,000, while sales soared from $1.2 billion to $25.8 billion.

And the Clintons depended on Wal-Mart’s largesse not only for Hillary’s regular payments as a board member but for travel expenses on Wal-Mart planes and for heavy campaign contributions to Bill’s campaigns there and nationally…

During the same period, small towns all over America began complaining that Wal-Mart was squeezing out ma-and-pa stores and leaving little burgs throughout the Midwest and South with downtowns that featured little more than empty storefronts…

As part of Hillary Clinton’s gamble with the board of Wal-Mart, she supported trade policies that sent often previously rural-based manufacturing jobs overseas. She had oversight over a company that offers jobs void of health care and other essential benefits.

And perhaps most poignantly, Hillary Clinton played a key role in a company that uses anti-competitive practices to drive small rural businesses under—leaving boarded over windows up and down main street in rural communities across America.

That is no way to revitalize rural America.

Rural Development Goes Urban

Friday, April 6th, 2007

From the Washington Post:

Data Show Rural Money’s Urban Drift
Friday, April 6, 2007

A Washington Post analysis found that the U.S. Department of Agriculture’s Rural Development program sends billions each year to areas that bear little resemblance to the isolated, rural regions where the program started in the 1930s. Over the past five years, for example, the program has funneled more in grants and guaranteed loans to major metropolitan areas of more than 1 million people ($10.9 billion) than it has to distressed rural counties ($8.6 billion).

The analysis was based on more than 150,000 actions reported to the government-wide Federal Assistance Award Data System by Rural Development from 2001 to 2005. The system contained actions totaling $64 billion, about 90 percent of all of the grants, loans and loan guarantees awarded by the three agencies that make up the program.

The Post’s review found that an additional $8.8 billion was funneled to counties classified by the USDA as retirement or resort destinations. For the $42 billion that could be analyzed in more detail, The Post found that about 75 percent was sent to Zip codes within a 45-mile drive of an urban area, as defined by the University of Washington’s Rural Health Research Center.

Rural Pharmacies in Trouble

Monday, January 1st, 2007

An important story from The Rural Blog.

Medicare drug program is Wal-Marting rural pharmacies, CBS says

“What Wal-Mart once did to rural downtowns, Medicare is doing to the rural drug store.” That was how CBS correspondent Wyatt Andrews summed up his report last night on how the new Medicare Part D program for prescription drugs is hurting the small, independent pharmacies prevalent in rural areas — a story to which The Rural Blog has been calling attention for months.

“My life’s earnings have gone right out the window,” said Columbus, Miss., pharmacist Don Walden, the focus of Andrews’ report. “Walden says the problem is that seniors get Medicare coverage through private insurance companies, which in turn, have lowered the fees and reimbursements they pay him.” (Photo of Walden in his Medical Arts Pharmacy from CBSNews.com.)

Walden is resisting chain pharmacies’ offers to buy his store, but Andrews lists several that have gone out of business: “Gone this year is the old Taylor Drug Store in tiny Granville, Ohio. There is no more Centennial Merit Drugs in Monte Vista, Colo. When Randy Spainhour closed down Penslow’s pharmacy in Holly Ridge, N.C., he mailed his license back blaming, the ‘low reimbursement of Medicare’.”

The Rural Blog reported Aug. 24 that a survey of more than 500 community pharmacists revealed that nearly nine out of 10 (89 percent) are getting less money and a third are considering shutting down since Part D started last Jan. 1. “The survey found that more than half (55 percent) of respondents said they have had to obtain outside loans or financing to supplement their pharmacy’s cash flow because of slow reimbursement by health care plans,” according to the National Community Pharmacists Association.

A May 8 item in The Rural Blog referenced a study that shows rural residents are paying more for drugs than urbanites under Medicare Part D prescription drug plan. The study by the Center for Rural Health Policy Analysis of the Rural Policy Research Institute reported that average monthly premiums for Medicare Advantage prescription drug plans vary from $6 in urban New Hampshire to $53 in rural Hawaii. Click here for the archived item and click here for the study.


Ed. Note:
I draw a lot of source material from The Rural Blog which is supported by the The Institute for Rural Journalism and Community Issues at the University of Kentucky. I recommend the site to anyone who likes the material on this site.

Smithfield and Organized Labor

Saturday, December 16th, 2006

The news program NOW on PBS traveled to Tar Heel, North Carolina this week to report on the twelve-year long battle to unionize the Smithfield packing plant there. It is the worlds largest packing plant, and is located in a relatively rural part of the state. The United Food and Commercial Workers have been fighting against employer intimidation and other anti-union tactics at the plant since it opened in 1990.

“[Smithfield] values the hog and the processing of that hog more than they do the safety and the well-being of their employees,” [long time employee Keith] Ludlum tells NOW. The UFCW is calling for a national boycott of Smithfield products.

You can watch the show online if you missed the local playing on PBS.

Rolling Stone magazine also has a long feature article this week on Smithfield Foods and environmental concerns associated with the concentration of livestock.

The Other Owner

Monday, December 11th, 2006

Parke Wilde at the U.S. Food Policy Blog has a good post up about recent developments regarding the pork checkoff and National Pork Producers Council’s (NPPC) “Other White Meat” advertising slogan.

I was raising pigs in 2000 when a coalition of pork producers forced a vote on the mandatory pork checkoff program, and I’ve since followed the debate over mandatory agricultural checkoff programs closely. In a story too long to tell here, and ably told elsewhere, the mandatory pork checkoff remains in place today despite a majority farmer vote against it. Since 2000 there have been court battles fought against the cattle, mushroom, and other similar agricultural checkoff programs.

The sale of the NPPC’s “Other White Meat” slogan to the National Pork Board adds another interesting wrinkle to the case.

If this all sounds a bit foreign to you, start with Wilde’s June post. With that background out of the way, read about Wilde’s Freedom of Information Act request designed to find out more details about the transfer.

Renew Rural Iowa Initiative

Saturday, December 9th, 2006

The Iowa Farm Bureau (IFB) recently launched a new initiative to Renew Rural Iowa. The effort will focus on medium and large businesses located in rural Iowa, encouraging them to expand their businesses, and create more jobs in rural communities. We need to build our rural business infrastructure, and someone needs to do sustainable work in this area. But one wonders why the Iowa Farm Bureau is focusing their efforts on expanding non-farm businesses in rural communities. Their own answer is somewhat astounding:

Why is Iowa Farm Bureau focused on this initiative?

Nearly 90 percent of farmers today derive part of their income from off-farm employment. The Iowa Entrepreneurial Report Card, released every year from Washington, D.C., shows Iowa ranks last (50th) in new business creation and long-term employment growth. That, coupled with declining population trends, puts Iowa at risk for losing even more family farmers.

The IFB is apparently worried that the farmers in Iowa might not have access to adequate off-farm income to supplement their farm-related income. Rather than focusing on agricultural policy reform that would make it possible for farmers to make a decent living by farming, the Farm Bureau seemingly wants struggling family farmers to be able to spend more time working off the farm.

Nevertheless, creating and sustaining businesses located in rural communities is important, but here careful attention to the types of businesses the IFB wants to foster is warranted. Defining their target audience the Farm Bureau writes:

1. Anyone with an existing business, or planning to start a business that will generate in excess of $500,000 in 12 to 18 months.

2. Anyone who has a business plan that demonstrates the ability of generating in excess of $5 million in 3 to 5 years through interstate commerce.

3. Anyone with a place of business located in an Iowa community that is less than 30,000 […]

This initiative hardly sounds like a program for new, small-scale, rural-entrepreneurs destine to repopulate Main Street storefronts, and bring critical services to rural Iowa.

Additionally, the IFB’s sole partner organization in the initiative is the Entrepreneurial Development Center (EDC). This Cedar Rapids-based group touts its own vision as providing “economic growth in the Cedar Rapids / Iowa City Technology Corridor through the development and expansion of entrepreneurial enterprise.” This corridor is only marginally “rural,” and EDC is backed by decidedly non-rural funders such as the Cedar Rapids Chamber of Commerce.

The initiative website also hosts a press release (pdf) with praise from the CEO of the controversial company Trans Ova. Trans Ova has come under attack in recent years for genetic engineering and cloning of cows to produce pharmaceuticals in their milk.

Thus, on two more counts the motive of this initiative is called into question.

Unfortunately, this sort of behavior is hardly unexpected from the Farm Bureau. The Farm Bureau has long claimed to be the “largest farmer-member organization” in the country. In reality they are an insurance provider and a lobby for large agribusiness. They helped drive the consolidation of agriculture, and establish current farm policy that now makes family farmers dependent on off-farm income.

The Farm Bureau hasn’t made any move to convince me that want any more farmers, and they are not particularly concerned with new and innovative ways for current farmers to make a decent living on the land.

To people who follow the Farm Bureau and agriculture policy this is no surprise. But their Renew Rural Iowa initiative once again reveals that their real concern is not the revitalization of rural communities through an invigorated farm-economy. Perhaps they are hoping to mask the true devastating effects of the agriculture policy that they helped write.

Rural communities need a diverse economic base, and this must include more than just agriculture jobs. But in Iowa, it must also include a vibrant agricultural sector.

Note: Thanks to reader SW for additional analysis on this topic.

This Land Not for Sale to the Army

Tuesday, November 21st, 2006

Military officials are seeking to expand the training base at Fort Carson, Colorado by buying up 400,000 acres of Pinon Canyon (and as much as 2.3 million acres over the next 20 years). This land in rural Las Animas County is home to a deep tradition of farming and ranching. Local ranchers, typically supportive of the Fort Carson base, are now sporting “This Land Not for Sale to the Army” signs along their property boundaries.

Precisely where that additional 418,000 acres will be located is unclear, but the zone the Army is looking at encompasses 1 million acres, perhaps 5,000 people, two entire towns, three schools, two state highways and untold historic sites, including visible wagon wheel tracks on the Santa Fe Trail and dinosaur tracks.

For those not in the sites of the expansion, even Fort Carson officials admit that the planned expansion will have little or no economic benefit for the surrounding area.

Wal Mart Done Destroying Rural Communities:

Tuesday, October 24th, 2006

Will move to urban communities next.

Concerned by “dwindling returns,” Wal Mart will scale back new store openings in the coming year while it figures out how to adapt its rural-community-destroying-model to effectively destroy the economic vitality of major urban areas as well.

BIG-CITY PUSH

Richard Hastings, retail analyst with Bernard Sands, said the slowdown comes as 44-year-old Wal-Mart faces a maturing home market and sets its sights on major urban areas, where both costs and community opposition are higher.

“They’ve run out of the kinds of rural and suburban inexpensive lease locations that they enjoyed for so many years,'’ Hastings said.

Wal Mart stock rose 2 percent on the news.

Outmigration is Costly

Monday, September 25th, 2006

The Dakotas and other Great Plains states are a leading indicator of things to come for larger sections of the rural U.S. Without clear and significant policy changes this trend will only intensify and spread.

FARGO (AP) - North Dakota lost nearly $1 billion in net taxable income from 1993 to 2005 due to outmigration, a State Data Center report says.

The figures show people moving to North Dakota during the 13-year span brought with them $5.5 billion in net taxable income, about $1 billion less than the what people leaving the state took with them.

The number of people leaving the state between 1993 and 2005 totaled 434,091, based on the number of exemptions claimed on income tax returns, said Karen Olson, an information specialist at the Data Center. The number of people who moved to the state during that period totaled 389,725, based on the tax exemptions, she said.

The rest of the story is below the fold.

(more…)

The Symbolism

Wednesday, August 16th, 2006

The year is 2015… The quadruple subsidy (pdf) of ethanol proves to be an insufficient method of producing enough biofuel to meet skyrocketing demands. In response, the petrol-guzzling military industrial complex plows through the Midwest on a hungry rampage consuming entire fields of corn, bucolic family farms and unused windmills in the process. Still, all the corn in the country proves to be an inadequate solution to the post peak-oil energy crisis.

Photo Credit: Sean Sheerin (2006), Land Stewardship Letter, Vol 24, No. 2.

Google Rural

Sunday, July 23rd, 2006

Rural areas with less expensive electricity might attract large digital companies that run large “server farms” requiring high loads of electricity to operate. As more and more of our computing goes online, the server and storage space required to meet growing computing demand will result in increased electricity demand on the part of the sever providers

Energy costs have turned into the driving force behind site selection decisions by Google, Yahoo and other Internet operations. They’re eyeing rural areas with plentiful and cheap power. These cyber giants process massive amounts of information through server farms spread throughout the globe…

Relocating server farms to rural locations shaves pennies per kilowatt-hour. But because server farms can consume as much power as a city of some 35,000 people, even modest reductions in electricity rates can save millions of dollars a year.

My hometown in Northwest Iowa (Laurens) has quite low electricity rates due in large part to a share in a hydroelectricity dam that was purchased decades ago by the municipal power provider. For years the low electricity rates kept a large grocery distributor (Scrivener then Fleming) in town despite being 60 miles from the nearest four lane highway. Low electricity rates made running their cooling units cheap enough to make up for the extra driving their trucks had to do on rural two lane blacktops. They left town anyway in 1999 and took a couple of hundred jobs with them.

The electricity is still cheap in Laurens. Perhaps this largely farming based economy can attract some new farms—server farms.

School Buildings for Sale

Thursday, May 25th, 2006

Aside from the fact that the school had to close in the first place, I love this story.

Speaking from the unique new home of his electronic business TAB Funkenwerks, [Oliver Archut] tells his story in a deep European accent: “On CNN I saw a documentary that the heartland of the United States is bleeding out. The schools are empty, the hospitals are empty. And they pretty much said that they were giving it away. That’s when I told my wife, find me a school.”

So with a few keystrokes, Oliver’s wife and business partner Gwen went to the place to people go when they’re looking to get a deal on something totally random.

“I just threw in school on e-Bay and there it was,” says perky Gwen from her office. “I was shocked. I had to speak with people three times before I actually believed the price they had said.”

The price for the 30-thousand square foot former school: 25 grand. Too good to pass up. So the Archuts packed up their shop in Seattle, headed east, and didn’t stop until they were in Gaylord, Kansas.

“There was no way you’re going to find a 30-thousand square foot anything in Seattle for 25 thousand dollars,” Gwen says. “That’s a minimum three million dollar investment.”

So they bought the school and relocated their business from Seattle, Washington (Population 600,000) to Gaylord, Kansas (Population 145). They say that they have everything that they need in Gaylord: high speed internet, UPS service, potential employees, and a very low cost of doing business.

Gwen and Oliver aren’t the only ones buying old rural schools for new business ventures. There’s others too.

And now for the best part. Have a business idea? You too can buy an old rural school on ebay. There is about half a dozen for sale right now. Gaylord, Kansas set a trend though because schools are bringing more than $25,000 these days.

Minimal Rural Tax Cut

Thursday, May 18th, 2006

Stolen from the IRJCI (Institute for Rural Journalism and Community Issues) Blog.

Most rural families will receive less than $50 annually in a tax bill slated to be signed today by President Bush, according to a press release from the National Center for Food and Agricultural Policy.

The Tax Increase Prevention and Reconciliation Act of 2005 (H.R. 4297) is projected to provide a total of $70 billion in tax cuts to America’s taxpayers. “Based upon an analysis by the Tax Policy Center, the primary beneficiaries of the legislation are higher income households and those who invest in the stock market. Median household income is twenty-five percent lower for non-metro families than for metro families (USDA Economic Research Service) and fewer rural residents than urban residents participate in a retirement plan (Bureau of Labor Statistics, March 2005),” states the release.

According to the Tax Policy Center, the annual average savings include:
$0 for income less than $10,000
$3 for $10,000-20,000
$10 for $20,000-30,000
$17 for $30,000-40,000
$47 for $40,000-50,000
$112 for $50,000-75,000
$406 for $75,000-100,000
$1,395 for $100,000-200,000
$4,527 for $200,000-500,000
$5,656 for $500,000-1,000,000
and $42,766 for more than $1 million.

There are lots of other interesting news items at IRJCI as usual.

Poverty in Rural America

Tuesday, April 18th, 2006

If you didn’t hear it, go listen to this NPR story on rural poverty among the elderly poor.

For Harrison County resident Billie Leas, retirement means some reliance on assistance programs. Once a month, she receives a box filled with 35 pounds worth of free, government-commodity food — dried milk, corn flakes, peas, peanut butter, evaporated milk and canned meat, vegetables, fruit and juice.

Leas, a widow close to 80, says she gets by on less than $250 a week. Her husband worked at a coal mine and steel mill, but he died six months short of a pension. So Leas depends on Social Security, most of which goes to rent, heat, power, groceries and medicine. A safety net of county, state and federal programs also helps. Leas says it is difficult to accept this kind of aid. She never imagined she’d still be struggling to get by in retirement.

Listen for the part about the 94 year old women who relies on a government food box to get by. She has very little money left from her monthly Social Security check to buy food after paying her heating and other bills. President Bush wants to cut funding for her monthly food box.

On the Reservation

Wednesday, February 15th, 2006

Some of the most impoverished rural communities in the United States are on Native American reservations. No more is this the case than on the Pine Ridge Reservation.

Most of the 2.7 million acres that make up the South Dakota reservation lie within Shannon County and Jackson County, two of the poorest counties in the U.S.

Unemployment on the Reservation hovers around 85% and 97% live below the federal poverty level. Adolescent suicide is 4 times the national average, and many of the families lack even basic services such as electricity and telephone service. The population on Pine Ridge has among the shortest life expectancies of any group in the entire Western Hemisphere (47 years for males and just over 50 years for females), and the infant mortality rate is five times the United States national average.

Watch for a photo blogging post on Pine Ridge Reservation later this week.

Terrible Idea

Monday, February 13th, 2006

It’s hard to believe that someone still thinks this is a good idea.

Edmore, N.D., Farmer says Animal Operations can Rescue Rural Population Decline

EDMORE, N.D. - North Dakota is prime ground for growing hogs.

“It has lots of agricultural land, lots of grain and lots of open space ,” said Kevin Tyndall, a consultant from Canadian hog producer Hytek.

Paul Ivesdal, an Edmore farmer, agrees. “I’d like to see 1 million hogs in our school district,” he said. “We could site a hog operation in each township.”

That’s a lofty goal, considering that Ivesdal has unsuccessfully attempted to get one 21,000-hog operation approved…

Frustrated by a year’s delay, Ivesdal said he might move his proposed hog operation a mile north, into Cavalier County. He said Viking Feeders also is considering a switch to a 5,000-sow farrowing operation rather than the 21,000-hog business that finishes the animals and sends them to market.

“The farrowing operation means 17 or 18 jobs, compared to the six jobs with the finishing barns,” Ivesdal said. “But the finishing uses about four times as much grain. I’m leaning toward creating more jobs over more feed.”

A farrowing operation, a nursery operation and two 20,000-head finishing sites constitute what is called a loop.

“We could get 10 loops in the school district,” Ivesdal said. “We could site one in each township. Sure, that’s a dream, but I don’t see any other business coming here.”

Although it might be a dream to Ivesdal, it’s a nightmare to others, judging by the resistance to his current plan. Most Concentrated Animal Feeding Operations meet with complaints from neighbors, but Viking Feeders has had detractors from the entire Devils Lake basin. The lake’s flooding has been disastrous to many, but the one plus is that it’s made for a great fishery and the tourism that comes with it. Some fear his hog operation will pollute the water…

“If we could have 10 loops, that would be 350 jobs,” he said. “That would be a lot of kids in our school district. We don’t have 160 kids in our whole (K-12) school now.”

He said the most basic jobs would pay $10 an hour, plus provide health insurance, retirement, vacation, other benefits and the chance to advance. “Here in rural North Dakota, that’s not bad for the lowest job on the totem pole,” he said.

Not so quick with all those numbers there. The following is from my own Master’s Thesis.

A study by the University of Missouri found that independent hog producers support three times more employees than industrial agribusiness producers do (Ikerd 1994). Research in Virginia showed that 5,000 sows held by many local producers as opposed to two or three industrial agribusiness operations provided 10% more jobs, a 20% greater increase in local retail sales and a 37% greater increase in per capita income for those employed by the operations (Thornsbury et al. 1994)…

In addition to these factors, several studies have shown that the presence of industrial scale animal production depresses the value of nearby real estate, reduces tax revenue for local governing entities, and is associated with an increased dependence on government social programs (Trom 2005). A family farm system of agriculture is also more compatible with rural tourism than an industrial agribusiness system is.

Furthermore, measurements of economic growth are not always a reflection of desirable trends. When measured strictly in terms of gross national product or per capita income, a growing economy is not necessarily a reflection of improved circumstance for the majority of individuals in a society. More important indicators, such as income distribution and standard of living indexes, are a more accurate reflection of the benefit of growth to the majority of people.

The reporter, unfortunately, doesn’t explore this angle—at all. (Full citations available upon request.)

Reversing the Rural Decline

Tuesday, December 13th, 2005

by Brian Depew

There’s yet another story today about the shrinking population of the rural United States. This one is from Kansas where 3/4 of the state’s 105 counties lost population between 2000 and 2004, and for the eighth year in a row 60 percent of the school districts in the state saw their enrollment decline yet again in 2005.

The story discusses the usual causes (changes in the agriculture sector), and the usual responses (school consolidation).

I admire communities like Utica, Kansas where they hung onto their school until last year when enrollment for the entire district fell below 40 students, and Cuba, Kansas where a school with an enrollment of 100 students remains open.

But stubborn perseverance alone will not save these communities. We must transform how we think about rural areas.

We need to move beyond current policies that have done little to reverse the long decline, and instead implement public policies that seek to support and build the civil institutions that rural people depend on (schools included).

This means figuring out how to arrest population decline, but initially it means more than that. It means using creative ideas to keep schools, post offices and grocery stores open. It means looking at new and creative ways to fund vital activities. It means forming new coalitions to lobby state and federal governments for both fiscal support and beneficial policy changes.

Some of the community leaders in the story understand the problem.

“We’ve got to find things people can do to stay in Republic County,” said [school Superintendent] Lysell, who’s also active in the county’s economic development efforts. “What we have now is a sort of cycle — we give our kids a really good education, they go off to college and then they don’t come back because they can’t make the kind of money here that they can make in the larger cities. And then with fewer people here, we start to lose businesses,” he said.

But we have to move beyond defeatist response like this one given by the director of the Center for Economic Development and Business Research at Wichita State University.

“[Rural Communities that have bucked the trend] are exceptions rather than the rule,” said WSU’s Harrah, adding, “I don’t expect to see a turnaround.”

Clearly they’re not going to help us.

We need leaders (people in positions like school Superintendent Lysell) to bring rural communities together and form grassroots organizations. These organizations can (and should) be the hub of innovative ideas about how to maintain and build the civil institutions rural communities need. Additionally, these groups need to be encouraged to stand up and demand policy changes when they are needed at the state and federal level.

I believe that a sustainable rural future is possible, but it will have to start in the communities most affected by the current decline. Policies that keep schools in rural communities, bring jobs back and implement creative funding mechanisms are a start. With support and encouragement I believe that ideas like these will see wider implementation, and that many more ideas like them will emerge from our rural communities.

There’s certainly no sense in waiting around for the solutions to come from above.

The declines have the attention of Sen. Janis Lee, D-Kensington.

“It’s been devastating,” Lee said. “I don’t know the answer, but I think it’s pretty clear that economic efforts that have been undertaken in this state haven’t worked. I don’t think they have a clue what we’re dealing with out here.”

We have to take the solutions to them. They are waiting.

Tough Row to Hoe

Sunday, December 11th, 2005

It is going to be a long time before things start to look up in the agriculture and rural communities affected by Hurricanes Katrina and Rita. This story from the Christian Science Monitor provides a sketch that illustrates the much larger problems.

This is the time of year when Emmett Fowler would be pulling bright navel oranges, sweet satsumas, and juicy grapefruit from his citrus trees. Instead, Mr. Fowler expects he will be plowing under his 2,000 lifeless fruit trees.

“The state will have to test the soil for salt and crude oil,” says Fowler as he looks out at his groves […] and talks about whether he will be able to recover. “Most of the trees were under 14 feet of water.”

Hurricanes Katrina and Rita have left similar scenes of devastation across the state. State economists now estimate the losses to Louisiana’s farm economy at $1.6 billion - ranging from strawberry fields that were washed away to entire forests that had 10 to 15 years’ worth of timber destroyed. And, because of the salt-water flooding, agriculture experts say the damage could stretch on for years. […]

“There was nothing that we grow that was not impacted.”

And in a particularly ironic turn, some farmers are faced with losses from a lack of rain since the storms.

[S]ome farmers whose crops withstood the wind and floods watched their produce wither after weeks without electricity meant they couldn’t irrigate. “We’re still in a drought situation,” says Professor Bracy. “We’ve had no significant rain since Katrina or Rita.”

For farmers, the problems seem never-ending. After the hurricanes, there were shortages of diesel. This prevented farmers from using their generators, which could have powered their irrigation pumps. Dairy farmers, also without electricity, lost milk sales.

How Big is Your Town’s Endowment?

Thursday, December 1st, 2005

I missed this New York Times story a couple of weeks ago.

The story highlighted Ord, Nebraska (population 2,200) and the recently established Ord Foundation. These community endowments are being established in a small, but growing, number of rural communities.

In Ord the endowment recently offered relocation assistance to 10 young couples who moved to town.

In some rural communities (if they reach their fundraising goals) the new endowments are posed to provide more yearly revenue than local property taxes currently do.

Even smaller towns have gotten involved. Shickley, a village in Fillmore County in the southeastern part of the state, with a population of 363, has built an endowment of $300,000 in just four years, after a local banking family posted a $105,000 challenge grant. If the town can raise $1 million - by 2011 it is hoped - it will provide more than the present annual property tax intake of $42,000. This year, the endowment’s extra $13,000 helped renovate the Fillmore County Courthouse, support a local history project and maintain a new library and public swimming pool.

The success of the endowments in many rural communities is being staked on local residents, rather than on wealthy external funders.

The critical part of creating an endowment is to involve as many residents as possible, through a local founders club that requires a minimum commitment of $1,000. In Ord, 55 donors signed up within the first two weeks.

Colleges and Universities track their alumni like hawks, knowing that one day these former students will be in the position to contribute to their alma mater’s endowment. Towns in Nebraska are now doing the same.

Nebraska does not have a large pool of part-time residents to tap, and it has an outflow of young residents - the children of potential donors - who move away when they go to college and do not return. So virtually every town has tracked down alumni networks, even for grade schools, to draw from the huge intergenerational wealth transfer that could be coming in the next decades.

The executive director of the foundation in Ord, Nebraska says, “”There is a renewed sense of hope in this community that we can help ourselves, we have to help ourselves because no one else is going to.”

Indeed.

Update: If you live in a rural community, consider sending a link to this post to your local mayor, city council members and school officials.

Outsourcing to Rural

Monday, November 28th, 2005

Could rural sourcing help bring jobs to rural communities?

When Robin Viera graduated from East Carolina University in Greenville, North Carolina, in May, she assumed she would have to relocate to a larger city to use her degree in business and systems analysis. But she was reluctant to uproot her husband and 11-year-old stepson, and leave behind their extended families.

Instead, she landed a program-analyst position with Rural Sourcing, an IT company that outsources not to India or Mexico, but rural America. […]

Rural Sourcing claims to provide information technology services at 30 percent to 50 percent below most U.S. consulting firms by tapping into the increasing number of IT professionals in rural America, where overhead and wages are lower than in metropolitan areas. […]

“I believed there is untapped talent in these locations that has been overlooked,” said White, who grew up in Oxford, Arkansas, which had a population of 200 at the time. Many rural American communities have suffered proverbial brain drains, White said. Subsequently, their populations are aging and tax bases are shrinking. When she started Rural Sourcing, her goal was to help reverse these trends. […]

Today Rural Sourcing claims 20 clients, including Mattel and Cardinal Health, $1 million in revenue and 50 full-time employees at five IT centers in Arkansas, North Carolina and Missouri. […] She hopes to employ 100 full-time consultants by the end of next year, and 1,000 within five to seven years.

I’m generally optimistic about the work being done by Rural Sourcing. The project might benefit from some new public policy (local, state and national) that seeks to support the development of networks and infrastructures needed to encourage the spread of rural sourcing to more communities.

At the local level, city councils, mayors and community leaders should look to implement policies that will encourage jobs to be rural-sourced to their communities.

More land grant universities, traditionally charged with teaching agricultural practices, should be encouraged to pursue centers to study the possibilities of rural sourcing in their respective states, and also to follow the lead of the Delta Center for Economic Development at Arkansas State University by helping to develop the infrastructure needed to make rural sourcing a reality.

And finally, it is easy to imagine a host of national policy changes that would encourage more rural sourcing. These range from the mundane (federal appropriations to encourage the practice) to the particularly significant (changes in trade policy–hey, we can hope).

This all comes with the caveat I offered here.

Hunger in the Country

Sunday, November 27th, 2005

In the days leading up to Thanksgiving last week NPR aired a series of in-depth stories on hunger in the United States.

All four stories were excellent (in that awful, terrible kind of way). If you didn’t hear them I draw your attention in particular to the one on hunger in the rural U.S.

Fifteen percent of the rural people surveyed are uncertain about getting enough food. […]

In Smyth County, Va., the Hankins family lives these statistics every day. Their rural home is near the town of Chilhowie, a place of plenty once. Chilhowie is a Cherokee word, meaning “valley of many deer.” Just up the road is Hungry Mother State Park, a place named for a local legend about a mother’s sacrifice for a hungry child.

Wreatha Hankins is a 37-year-old mom with three children and a working husband. She has resorted to extraordinary measures to make sure her family eats, including skipping meals herself, skipping medicine for epilepsy and chronic back pain, doing her own dental work, selling family heirlooms and scouring Smyth County for the cheapest food available. She searches for food bargains at dollar stores, flea markets, roadside stands and the nearly expired meat section at supermarkets.

“We’re the working poor,” Wreatha says. In fact, Robbie Hankins works full-time at a cement plant. Wreatha works part-time as a substitute teacher. Last year, the couple made $22,000. That puts them just below the federal poverty threshold for a family of five. But it’s too much for food stamps. The family does get a monthly, 125-pound box of groceries from a local food pantry. And the children get free lunches at school. Eating otherwise is sometimes a challenge. “It bothers me knowing that I don’t know whether we’re going to have food from one week to the next,” says Robbie.

The “food insecure” in rural places face special challenges. High gas prices make the hunt for cheap or free food expensive. Some rural people, especially the disabled and elderly, don’t have cars, or cars that run reliably. And grocery stores and food pantries are fewer and farther between.

But really you must listen to the story to fully appreciate the challenges. When you listen you’ll learn how, among other tactics to preserve their food budget, Wreatha has resorted to home-spun dentistry using candle wax to repair a damaged tooth.

Listen here. Give here, or to your local food relief agency.

Rural Philanthropy

Friday, November 25th, 2005

From a recent editorial by Thomas Rowley at RUPRI.

According to a May 2004 report by the National Committee for Responsive Philanthropy, foundations in the United States give out some $30 billion a year. Of that, a paltry $100.5 million was committed to rural development. Indeed, only 184 of 65,000 active grant-making foundations in the country gave to rural development. (Just two of those 184—the W.K. Kellogg Foundation and the Ford Foundation–together were responsible for 42 percent of the money to rural.)

Rural Air Service

Wednesday, November 23rd, 2005

Airline services to rural communities threatened in latest round of budget cuts.

Cuts target rural ‘lifeline’
Tiny towns say government-funded air service essential

Air travel is not always convenient. But how about having to drive more than 120 miles, much of it on a two-lane road, just to get to the airport?

That’s what the folks in Brownwood, Texas, have had to put up with since they lost their commercial air service a year ago, and that’s what dozens of other communities across rural America could face if the White House succeeds in slashing the Essential Air Service program. […]

Each year, Congress spends about $100 million on the program, which pays small airlines to fly to rural airports they would otherwise avoid because there aren’t enough passengers to cover the cost.

The Bush administration has repeatedly tried to shrink the program to serve only the most remote communities. […]

Under the White House plan, communities that get subsidized air service would have to kick in to help cover the cost. Cities less than 100 miles from a large or medium hub airport or 75 miles from a small hub could get federal help, but only for ground transportation, such as shuttle buses, to take people to a larger airport. […]

The cost to provide rural air service has quadrupled over the past decade. Several communities reported subsidies per passenger of more than $300 last year. At the same time, ridership has fallen in part because of the emergence of discount airlines that have made the drive to a larger airport financially worthwhile.

However, the service is more than just a convenience for local residents. Out-of-the-way communities depend on the airlines to speed up delivery of mail and supplies - and there’s the economic-development aspect, as well. […]

The arguments for cutting these services sound a lot like the arguments for cutting support for Amtrak. The problem is that both arguments fail to acknowledge an entire set of subsidies that go to airlines, roads, bridges, etc.

Sure rural air service costs taxpayers money, but so do roads, bridges, tunnels, and airlines which serve a large spectrum of our population.

Food and Class Status

Tuesday, November 22nd, 2005

There’s a good post and accompanying discussion in the comments section over at Gristmill where Tom Philpott has written a post about the sustainable food movement’s “class problem.”

Food and class

The sustainable-food movement has a class problem.

Slow Food, for example, is an essential organization, with its declaration of a universal “right to taste” and its mandate to …

“… oppose the standardisation of taste, defend the need for consumer information, protect cultural identities tied to food and gastronomic traditions, safeguard foods and cultivation and processing techniques inherited from tradition and defend domestic and wild animal and vegetable species.”

The group has undeniably done important work internationally toward those goals; yet its U.S. branch tends to throw pricey events accessible only to an economic elite.

The rest is here.

700 Sq Miles of WiFi

Monday, October 24th, 2005

On a good day I can pick up my neighbor’s wifi (shh, don’t tell). If you live within the 700 square mile block near rural Hermiston, Oregon you can pick up free uninterrupted wifi for miles in every direction.

While cities around the country are battling over plans to offer free or cheap Internet access, this lonely terrain is served by what is billed as the world’s largest hotspot, a wireless cloud that stretches over 700 square miles of landscape so dry and desolate it could have been lifted from a cowboy tune.

Attempts to bring wifi clouds to several large urban areas have been more or less stymied by major telecom companies (who are pouring money into state legislative bills that will prohibit the practice).

But here among the thistle, large providers such as local phone company Qwest Communications International Inc. see little profit potential. So wireless entrepreneur Fred Ziari drew no resistance for his proposed wireless network, enabling him to quickly build the $5 million cloud at his own expense.

The service is free to general users. Ziari hopes to recover is investment through contracts with local government agencies and businesses who utilize more bandwidth and features on the network.

Asked why other municipalities have had a harder time succeeding, he replies: “Politics.”

“If we get a go-ahead, we can do a fairly good-sized city in a month or two,” said Ziari. “The problem is getting the go-ahead.”

Looks like most rural residents will keep dialing up for a little while longer.

Long Drives + High Gas Prices = Rural Crunch

Friday, October 14th, 2005

In many major national stories (Katrina, Iraq, etc) there is an untold rural angle. The national jump in gas prices is no different. In fact, for many rural families the problem is compounded by longer than typical drives and lower than typical incomes.

The Christian Science Monitor picks up the story of doctor visits forgone, meals skipped and presents unbought as a result of rising gas prices in the rural United States.

Cheryl Murphy used to drive her Dodge Caravan as often as necessary to see her doctor in Lincoln [NH], 25 miles south of her home here in the sparsely populated “North Country.”

But that was before gas prices spiked, making fuel costs feel like a second co-pay for this single mother of two. Now that gas takes a 20 percent bite out of her monthly $243 check from Social Security, doctor visits have become a luxury out of reach.

“I don’t monitor my health condition as well as I should because I just can’t afford to get there,” Ms. Murphy says. Meanwhile, she’s cut down to one meal per day and has warned her children to expect nothing under the Christmas tree this year.

Ms. Murphy’s quiet struggle plays out far from the public eye. Yet her story is hardly unique in rural America, where wages languish 25 percent below those in urban areas and private transportation is more central to daily life. And with winter just around the corner, costly trade-offs are fast becoming a way of life in places where schools, jobs, and the nearest stores all require a lengthy trip behind the wheel.

A recently released study (pdf) by the Consumer Federation of America reports that households earning less than $15,000 are now spending in excess of 10% of their income on gasoline. Add to that the fact that rural households already spend 50% more on gasoline than their uban counterparts (due to longer drives), and it becomes easy to see that the millions of rural households living in poverty end up significantly more disatvantaged than others.

A Mining Boom

Sunday, July 10th, 2005

A common misconception among urbanites is that rural is synonymous with agriculture. While some rural communities are affected by the structure and trends of agriculture, other rural communities rely on mining, forestry and manufacturing.

Rural communities that have ties to mining are currently witnessing rapid changes in the industry. Coal mining in particular is being driven to expand by increased foreign demand and high oil prices. This expansion is resulting in high wages and significant labor shortages.

Coal industry and union executives are concerned that Pennsylvania soon could face shortages of skilled coal miners that already are cropping up elsewhere in the other Appalachian Basin states of Ohio, West Virginia, Maryland, Virginia and Kentucky.

Mining employment grew briefly in the 1970s, but collapsed again in the 1980s and has remained depressed until recently.

The lack of hiring in the past two decades — exacerbated by new technology that eliminated many mining jobs and increased the skills needed to be a miner — has left the industry with outright labor shortages in some industry strongholds, such as southern West Virginia and Eastern Kentucky, and a rapidly aging work force in others, including Pennsylvania.

Most of the people in the available labor pool aren’t trained to be miners, and universities and trade schools have scaled back or eliminated mining programs in recent years. To combat the labor shortage mining companies have increased salaries by $10,000 in recent years, but even that is not helping.

Average salaries of from $68,000 to $87,000 (for coal miners), health benefits, life insurance and vacations are not enough to lure people to this grime-and-dirt work. […]

The job is not sexy, to say the least. Women are reluctant to move to remote mining towns despite high salaries, making it a predominantly male profession. And, it is an instable industry. Today’s boom is tomorrow’s bust.

Despite the current labor shortages more mines are slated to open and other previously shuttered mines will reopen in the coming year.

Additional mine openings will bring additional jobs to often depressed rural economies, but whether these jobs bring more benefit or harm in the long-term remains an open question. Many rural communities today are facing clean-up bills from an environmental mess left behind by the last round of mines to go bust.

Few can blame those looking for a job, but I would argue that we would be better off investing tax dollars today in sustainable rural development, rather than tomorrow cleaning up after another round of busted mines.

Bad Rural Development

Wednesday, June 29th, 2005

For several months I have been working on my own writing project (a mater’s thesis). As a result I’ve fallen behind on reading other people’s writing, but now that I am wrapping up my project I have been turning to my growing pile of books.

Last night I was able to start reading Jared Diamond’s new book Collapse: How Societies Choose to Fail or Succeed. Diamond is also the author of the bestseller Guns, Germs, and Steel.

Diamond begins his new book in Montana, a region that he sees as an exemplar case of how societies can go wrong. Diamond’s writing about one county in the Bitterroot Mountain Range exemplifies what might be a paradigm case of bad rural development.

A symbolic landmark in the Bitterroot Valley’s recent economic transformation took place in 1996, when a 2,600 acre farm called the Bitterroot Stock Farm […] was acquired by the wealthy brokerage house owner Charles Schwab. He began to develop [the] estate for very rich out-of-staters who wanted a second (or even third or fourth) home in the valley to visit for fishing, hunting, horseback riding, and golfing a couple of times a year.

The Stock Farm includes an 18-hole championship gold course and about 125 sites for what are called either houses or cabins, “cabin” being a euphemism for a structure of up to six bedrooms and 6,000 square feet selling for $800,000 or more. Buyers of Stock Farm lots must be able to prove that they meet high standards of net worth and income, the least of which is the ability to afford a club membership initiation fee of $125,000, which is more than seven times the average annual income of Ravalli County Residents.

The whole Stock Farm is fenced, and the entrance gate bares a sign, MEMBERS AND GUESTS ONLY. Many of the owners arrive by private jet and rarely shop or set foot in Hamilton, but prefer to eat at the Stock Farm club or else have their groceries picked up from Hamilton by club employees.

Ironically, Ravalli County remains one of the poorest in Montana, which in turn is one of the poorest in the nation.

The book has not been without detractors, but nonetheless as long as you keep Diamond’s idiosyncrasies in mind as you read I think that the book will offer a rich narrative on an important topic.

If you don’t want to buy the book, you can read the much much briefer NY Times op-ed by Diamond that accompanied the release of the book.

Good Rural Development

Wednesday, June 29th, 2005

Much of the federal money spent on farm and rural programs is directed toward activities that do little to encourage meaningful development at the local level.

That’s a large part of the reason why this is so encouraging.

Woodbury County to consider tax breaks to organic farmers

SIOUX CITY, IA - Woodbury County may provide tax incentives to farmers who switch from conventional production to organic.

Rob Marqusee, the county’s rural economic development director, is scheduled to present the Board of Supervisors with a proposal Tuesday to offer farmers property tax rebates if they go organic.

Bob Scowcroft, executive director of the Organic Farming Research Foundation in Santa Cruz, Calif., said Woodbury County may be the first local government to offer such incentives to farmers.

Marqusee said the goal of the program would be to build on local agriculture to spark economic development. The program would help build a thriving organic farming industry that would attract organic food processors and other businesses to the area, he said.

At a time when demand for organic foods is soaring this is a tax break that has a real chance of paying off in increased economic activity generated by tapping into the booming organic trend.

Generally speaking, we need to look toward local and regional governments for direction on farm and rural policy more often.

Mad Cow Case Confirmed

Friday, June 24th, 2005

As you have probably heard

Tests Confirm 2nd Case of Mad Cow Disease in U.S.

The Agriculture Department said today that tests conducted on an animal that died in November, suspected of having mad cow disease, had turned out positive, confirming the second case of the disease to be found in the United States in the last two years.

As long as the FDA, USDA and beef industry continue to drag their feet on the implementation of new safety standards this will continue to happen.

Your Tax Dollars at Work

Wednesday, June 22nd, 2005

This story from last week just came to my attention.

USDA plants its own pro-CAFTA news

WASHINGTON - (KRT) - The U.S. Department of Agriculture has churned out three dozen radio and television news segments since the first of the year that promote a controversial trade agreement with Central America opposed by labor unions, the sugar industry and many members of Congress, including some Republicans.

Amid an intense debate over government-funded efforts to influence news coverage, the pre-packaged reports have been widely distributed to broadcast outlets across the country for easy insertion into newscasts.

Readers will recall that this is not the first time this administration has drawn attention for muddling in news reporting. A number of these reports incorporate sound bites from Agriculture Secretary Mike Johanns and other top officials at the USDA.

In one radio segment, Agriculture Secretary Mike Johanns said that passing CAFTA should be an easy decision for members of Congress.

“I can’t imagine how any senator or House member from ag country could stand up and vote against CAFTA,” Johanns said. “It makes no sense to me. It’s voting against our producers.”

In another radio segment promoting CAFTA, Allen Johnson, a top U.S. trade official, dismissed the sugar industry’s “dire forecasts” about CAFTA’s impact as “a Chicken Little sort of thing that isn’t real.”

These “news” releases come complete with a recorded disclaimer at the end of the tape, conveniently placed for cutting.

“These releases, which are produced and distributed with taxpayer dollars, are provided to 675 rural radio stations and numerous televisions stations where they are run, without disclosure of their source, as news reports,” the senators wrote. “We are concerned that many listeners in rural America may believe these releases are objective news reports […]

[…] USDA spokesman Ed Loyd defended the practice, noting that the reports are all clearly identified as coming from the USDA.

“They are reports about what the secretary of agriculture has said,” Loyd said. “We clearly state that we are the source. We’re not disguising that we are the source.”

But the taglines disclosing the USDA’s role generally are at the ends of the reports, and Akaka and Landrieu said some news stations drop those taglines.

One radio producer says

“I use a lot of their stuff verbatim,” he said. “Everything I’ve been able to use has been pretty well-balanced as far as I can tell.”

On more controversial issues such as CAFTA, Molino said he normally follows up the USDA report with a comment from a Louisiana member of Congress who opposes the trade deal.

Bush needs all of the help he can get to bolster CAFTA. Like other administration proposals, Bush has struggled to get support for the trade agreement since its proposal last year. For years Washington policy makers have been advising farmers that more trade is the answer to our agricultural surplus. The tactic hasn’t really worked yet, and more and more farmers are becoming wary of additional trade agreements as a way to raise commodity prices.

If anyone has ever heard/seen one of these things that included the disclaimer leave a note in the comment section.

Late Update: You can listen to some of the USDA’s “news” releases on their website. The so-called disclaimer reads as follows, “In Washington, I’m [reporter’s name] reporting for the U.S. Department of Agriculture.” It’s a quick little bit that could easily be missed by all but the most discerning ear. Even if you catch it, the significance may remain unclear.

Social Security

Tuesday, June 21st, 2005

A new study by the Institute for America’s Future shows that rural areas are move heavily dependent on Social Security than urban areas.

In Ohio

Social Security benefits account for 7 percent of rural Ohio’s income, compared with 5.6 percent in urban areas.

Older women in rural Ohio, who make up 7.2 percent of the state’s 1.3 million people, collect Social Security benefits, compared with 6.3 percent of their non-rural counterparts across the country.

Rural Ohio relies more on Social Security benefits because of the dangers of farming, with disability beneficiaries accounting for 2.7 percent in rural areas, compared to 2.4 percent in nonrural areas.

Follow the link to the study if you want to see the report for your state.

Mad Cow

Saturday, June 18th, 2005

Never mind the most recent case.

Instead think back to last year after the first (documented) case of mad cow disease in the U.S. Remember the sweeping new rules announced by the USDA and FDA that were supposed to further restrict the use of animal byproducts in cattle feed? Well it appears that those rules are passing quietly into the night.

This story appeared on page 29A of my paper today.

American cattle are eating chicken litter, cattle blood and restaurant leftovers that could help transmit mad cow disease — a gap in the U.S. defense that the Bush administration promised to close nearly 18 months ago.

“Once the cameras were turned off and the media coverage dissipated, then it’s been business as usual, no real reform, just keep feeding slaughterhouse waste,” said John Stauber.

Chicken litter is significant because cattle remains are used in poultry feed, feed that inevitably ends up in the litter.

And what does the FDA have to say for itself?

Today, the FDA still has not done what it promised to do. The agency declined interviews, saying in a statement only that there is no timeline for new restrictions.

There are some short term winners here. Cattle feedlots like their cheap feed supplies, and the slaughter industry garners additional profits from selling rendering for use in other feed products. I don’t think anyone wins long term though.

Cotton Subsidies

Friday, June 17th, 2005

Last September (and again this March) the WTO ruled that U.S. cotton subsidies violated international trade agreements and ordered that they be lifted by July 1. As the deadline draws near the fervor around the issue is growing.

Yesterday Brazil threatened to retaliate if Washington doesn’t come forward with a plan.

BRASILIA, Brazil - 06/17/05 - Brazilian lawmakers have said that they are seriously considering removing protections on the intellectual property rights of US companies operating in the South American country if Washington fails to explain how it intends to move on plans to modify the existing US cotton subsidy mechanism.

Brazil isn’t the only country waiting to hear from Washington.

World cotton prices have dropped 30 percent in the past 18 months, increasing rural poverty in many African countries. Even in Egypt, for which cotton is not a crucial commodity, this shift has caused farmers to switch to growing rice, despite the fact that Egyptian long-staple cotton is considered to be one of the best in the world—whereas Egyptian rice has no particular competitive advantage. According to the British-based anti-poverty NGO Oxfam, “This system [of U.S. cotton subsidies] pits a typical Malian producer, farming two hectares of cotton, who is lucky to gross $400 a year, against US farms which receive a subsidy of $250 per hectare.”

“For the past three years, African cotton producers have not been able to make a decent living because of American subsidies,” said Sero Zorobouragui of the African Cotton Producers Organization.

U.S. cotton growers can be relatively assured that they will receive their check this fall, and it’s difficult to imagine that changing drastically in the near future. However, in 2003 the Bush Administration was forced to lift protective legislation aimed at the U.S. steel market after a similar ruling by the WTO.

Withdrawing from such free trade agreements seems to be one solution, though that isn’t likely to happen anytime soon. Shifting more subsidies to the unregulated “green box” category is another. The Conservation Security Program falls into the “green box,” but this program has seen little support in our current political climate.

Whatever happens in coming months the issue of agriculture subsidies will continue to be a growing issue. Any win-win solution will take significant work on the part of multiple players.

Update: The KickASS (Kick all Agricultural Subsidies) blog reports that Paul Wolfowitz, while in Africa, said that key to helping Africa’s poor cotton growers was to cut the subsidies paid to US and agriculture producers.

Golf Leaves Some Out

Thursday, June 16th, 2005

As the U.S. Open golf tournament gets underway in North Carolina today this story from last week deserves some attention.

MIDWAY, N.C. — If a hard rain falls on the North Carolina Sandhills this week, it could temporarily halt play at the U.S. Open golf tournament at Pinehurst.

It also might wash away the dirt Randy Thomas has packed in the driveway of his home a couple of miles away, leaving his septic system to leak raw sewage into his front yard.

Midway is one of five predominantly black communities tucked amid the area’s well-manicured golf course communities, often to the extent that they appear as doughnut holes on maps. They exist in a governmental no-man’s land, without sewer lines, garbage service or sometimes even water lines.

The people that live in these forgotten enclaves provided much of the manual labor that built the areas multiple golf courses, but they have received little in return. Today the 500 residents of these communities live just minutes from upscale golf communities.

Follow the rutted roads to the east end of the neighborhood, take a sharp right up a sandy embankment and you’re onto a paved cul-de-sac with $500,000-plus vacation homes that surround a manmade lake and members-only Pinehurst Beach Club.

And this from the NY Times.

The 500 residents of these unincorporated enclaves are close enough to point out sewer lines that run past their properties en route to new developments, or to watch garbage trucks trundle past without stopping.

Activists are working this week to bring attention to this despicable situation.

Wolfowitz, World Bank President

Thursday, March 31st, 2005

Last fall in a development theory seminar one of my classmates commented on Robert McNamara’s tenure as the President of the World Bank. “So what,” they said, “first you fuck up a war, and then you get to be president of the World Bank?”

And alas there seems to be a trend developing.

If approved by the bank’s board, Wolfowitz will assume control of the World Bank and its $20 billion a year loan programs. The World Bank often plays an influential role in shaping the policies of developing nations as the result of conditions it attaches to loan money under its control.

Joseph Stiglitz, American Nobel laureate, former chief economist to the World Bank and influential economic thinker, is fighting back.

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Bush’s Budget and Rural America

Monday, March 14th, 2005

The irony abounds. Residents in rural areas voted overwhelmingly for George Bush. Their reward—across the board cuts of money previously allocated for rural development and agriculture programs.

The Center for Rural Affairs reports that rural America may loose more than one-third of the federal dollars currently allocated to rural economic and rural community development. This is in addition to significant cuts to direct farmer aid including a 50% slashing of the Conservation Security Program and an across-the-board reduction of five percent for all farm program payments.

Read the Action Brief (pdf here) from the Center for Rural Affairs or catch the highlights below the fold.

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Rural Sourcing

Thursday, March 10th, 2005

In an effort to counter the rural brain drain some rural communities are fighting back against overseas outsourcing.

NPR recently reported on a joint project of Southern Arkansas University and Rural Sourcing Inc.

Project proponents hope that the current backlash against overseas outsourcing will make rural sourcing an attractive alternative for companies looking to cut operating costs. Rural Sourcing Inc., who helps high-tech firms find rural partners, touts cost savings of 30-50% over domestic competitors. These savings are less than those possible with overseas outsourcing. Nonetheless some companies are choosing rural sourcing for both political and practical reasons.

This sounds promising as long as cost savings are the result of the lower costs of living in rural areas. As soon as the savings become the result of the exploitation of rural communities the practice will be only marginally better than overseas outsourcing.

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