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Archive for the 'Economic' Category

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.

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