Bradley, Edward B.

Faas, Ronald C.

English

Research Papers in Economics

POLICIES TO DEVELOP  ECONOMIC
ALTERNATIVES
FOR FARM PEOPLE AND  RURAL
COMMUNITIES
Ronald C. Faas
Washington State University
and
Ed Bradley
University of Wyoming
In examining how rural communities are affected by human stress
and  adjustment  in  agriculture,  two  concerns  stand  out.  First,  the
ability  of rural  communities to  survive  under  such  stress and,  sec-
ond, their capacity to create additional economic alternatives for peo-
ple  displaced from farm and other rural community employment.
Other than being fully employed in farming, farm people face three
major occupational  alternatives: (1) one or both adults working part-
time or full-time off the farm while continuing to farm (perhaps at a
reduced  scale  of operation);  (2)  leaving  farming  with  one  or  both
working off the farm while remaining in the local community; and (3)
leaving farming and migrating from the local community.
Two of these three alternatives  depend on economic  opportunities
generated within the local  community.  However,  financial  stress in
agriculture  stresses the entire rural community,  resulting in loss of
jobs off the farm and outmigration  from rural towns at a time when
farm people  and  others  in the  community  need  more  rather  than
fewer local employment  opportunities.
In  generating  specific  policy  choices  and evaluating  their conse-
quences, difficult questions must be considered. Are alternative  com-
munity futures such as growth, stability or decline equally realistic
policy goals for most communities? How might the likelihood of these
alternative futures vary within those typologies of county economies
recently  identified by the Economic Research  Service as farming de-
pendent,  manufacturing dependent,  mining dependent,  specialized
government, persistent poverty, federal lands, and/or retirement  (Ben-
der, et al)? What kinds of job opportunities does each type offer? How
do the services required for  each vary?  Given the added  importance
129of off-farm  income in recent years,  is financial stress  in agriculture
more  pronounced  in farming dependent  counties than in the other
types of counties?
Participants  in this workshop  were  charged  with identifying  and
evaluating  feasible  policies for developing  economic  alternatives  for
farm people and rural communities  faced with agricultural  overpro-
duction and financial stress. The following alternative  policy choices
were identified:
*  Identify  and provide  resources  to  help communities  with self-
assessment including community inventory, development educa-
tion, economic  analysis and strategic planning;
*  Adjust tax and local  policies to encourage  industry and attract
transfer payments;
*  Invest in  infrastructure  and retrain those displaced.  Target in-
frastructure  funds;  use  state  funds to  develop  local  infrastruc-
ture; maintain a viable economic climate and infrastructure;
*  Formulate a national policy decision to revitalize rural America;
*  Involve farm groups in developing  options other than farming;
*  Restructure  farm  programs  to  target  benefits  for  truly  finan-
cially stressed farms;
*  Encourage entrepreneurship through education,  taxes, capital;
*  Change eligibility requirements  of existing retraining and edu-
cation programs to meet needs of displaced rural people;
*  Provide relocation assistance to encourage growth centers.
The group also suggested five criteria as appropriate for evaluating
these policy alternatives:  (1) sufficient  income;  (2) program  cost; (3)
efficiency;  (4) flexibility; and (5) social justice/fairness.
Participants  then  attempted  to  evaluate  the  most feasible  policy
alternatives.  The  following pros  and cons  were  collated  for the two
alternatives  evaluated by the most people.
Identify Resources  to Help Communities with Self-Assessment
Pros
*Allow the community to set its own agenda  to the level of need
and/or interest.  Allowing people to solve their own problems can
be an initiation into self-decision making. Process is important.
Identifying  the  issues  confronted  and  their  magnitude  may
direct  efforts,  determining  the  community  trajectory.  Such  an
approach  is  usually  not expensive  and  has  a  long-term  value
since people can use the knowledge  gained for years to come.
130Cons
*  Such an approach may result in a "Pollyanna"  list of needs;
*  Resources  may not be available at the time and level  needed;
*  Lack  of commitment  and/or  lack of resources  or  inappropriate
application  of same may limit effectiveness.
Adjust Tax and Local  Policies  to Encourage Industry
Pros
*  This  option  forces  the  community  to  analyze  the  quality  of
public  services  and  tax  bases.  For  example,  the  Florida
inheritance  tax  encourages  retirement.  The  long-term  effect
would be to broaden the tax base.
*  It  may  increase  the  employment  base  and  diversify  and
strengthen  the  economy.  Adjustment  encourages  industry  to
stay  or  come  in.  It  may  induce  new  industry  and  create
additional employment and income.
*  Such  policies  are  easy  to  implement  through  legislation,
consensus and extension programs.
*  Research and experience  indicate that this is successful;
*  This is usually long-term,  i.e.,  we keep the retirement housing.
Cons
*  "Everyone"  is  doing  it.  It may  not result  in an  economically
viable or satisfactory  industry.  It may result in low-paying jobs
without  local  ownership  to  collect  profits;  and  may  increase
cyclical vulnerability.
*  The results may be short-term only and may increase problems
in the future  while  wasting public funds.  If it doesn't  work  it
can leave a community with such difficulties  as unpaid revenue
bonds and a tax base that cannot  cover costs.
*  This option  may  result in  a net cost as regards public  services
and  tax  revenue.  Can be  counterproductive  and  result  in  an
alternative  tax to maintain  services.  Immediate impact  might
create  additional  need  for  infrastructure  expansion  or  more
public services which would increase taxes for those already  in
the  community.  A  matter  of  equity  with  some  communities
paying more taxes than they are able, while some pay less. Over
the long term this is disadvantageous  with never enough taxes
being collected to pay for services.
Identifying  and  evaluating  feasible  policy  choices  are  only  the
beginning  steps.  Policy  educators  must  also  help  communities
131identify goals and objectives.  Difficult  in normal circumstances,  this
process  becomes  even  more  complex  during  severe  stress  when
opportunities  and  goals  of individuals  and firms  may depart  from
community  goals, further eroding community  cohesion.
How  seriously  does  such  rupture  limit  the  range  of  viable
alternative futures and appropriate policy choices to achieve selected
community  goals?  How are  economic  policy  alternatives  identified,
evaluated,  selected and implemented  in  communities  under  stress?
By  whom?  For  whom?  Finally,  what educational  opportunities  and
intervention  strategies  can  policy  educators  conceive  and utilize  to
help stressed community  people  envision viable  alternative futures,
identify and evaluate  alternative  policies,  and implement  plans  for
community growth,  stability or decline?
Summary
In  summary, there  is urgent  need for policies  to develop  economic
alternatives for farm people  and rural communities dealing with hu-
man  stress  and  adjustment.  Additionally,  renewed  intellectual  en-
ergy must be devoted to helping  rural communities cope  effectively
with a drastically  changed environment.  As emphasized  by  the  Ex-
tension  Committee  on Organization  and Policy (ECOP) Rural  Revi-
talization  Task Force,  the nature  of the current adjustment  crisis is
dramatically different than the familiar problems  faced by rural de-
velopment  efforts of the past several  decades  (Extension  Committee
on Organization  and Policy).
The future  of rural America  is no longer what  it used to be  as  a
result  of changes  in the U.S.  and world economies;  population and
demographic  shifts;  structural and economic  changes  in agriculture
and other natural resource industries; and severe adjustments in the
nonagricultural  rural economy.  Meeting this new challenge  will re-
quire  a refocus  of our research  and extension priorities if we  in the
land  grant  university  system  are  to  contribute  our best  concerted
effort toward  a solution.
REFERENCES
Bender, Lloyd D., Bernal  L. Green,  Thomas  F. Hady, John  A. Kuehn,  Marlys K.  Nelson,  Leon  B.  Perkinson, and
Peggy  J.  Ross.  The Diverse Social and Economic Structure of Nonmetropolitan America. Washington  DC:  U.S.
Department of Agriculture.  ERS Rural  Development  Research Report  49, Sept.  1985.
Extension  Committee  on Organization  and  Policy.  Revitalizing Rural America-A Cooperative Extension System
Response. A report  of the Rural Revitalization  Task Force.  Madison:  University of Wisconsin Division of Coopera-
tive Extension,  Nov.  1986.
132

Extension Committee on Organization and Policy. Revitalizing Rural America-A Cooperative Extension System Response. A report of the Rural Revitalization Task Force.

POLICIES TO DEVELOP ECONOMIC ALTERNATIVES FOR FARM PEOPLE AND RURAL COMMUNITIES

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Research Papers in Economics