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.

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.

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.

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.

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.

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.

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 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.

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.

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.

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.

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.

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.

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.)

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.