11a. WHAT ARE THE KEY RURAL POLICY ISSUES?

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11a. WHAT ARE THE KEY RURAL POLICY ISSUES?

• Larry D. Sanders
• Fall 2005

Dept. of Ag Economics Oklahoma State
University
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INTRODUCTION

• Purpose
• to become aware of rural policy issues options
• Learning Objectives
• 1. Become aware of the status of Rural Oklahoma.
  
• 2. Become aware of rural policy issues.
• 3. Understand key rural issues, options
  consequences.

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TRADITIONAL VIEW OF FARMING RURAL LIFE
FARM WELL-BEING
RURAL COMMUNITY WELL-BEING
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ALTERNATIVE MODEL OF FARMING RURAL LIFE
FARM WELL-BEING
RURAL COMMUNITY WELL-BEING
RURAL NONFARM ECONOMY
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Rural Development Issues

• Population--Concentration vs. Dispersion
• Diseconomies of Distance Diminished Tax Base
• Access to Public Services
• Program Targeting
• Safety Net? People or Places?
• Business Subsidies/Incentives?
• Physical vs. Social Infrastructure

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Rural Population Changes The Nonmetro Turnaround
of the 1990s

• Most nonmetro counties in 1990s (highest in
  mountain West, lowest/nonexistent in Great
  Plains, Corn Belt)
• increased population growth rate, or
• increased population, or
• decreased at a slower rate.
• Result of
• more inmigration from urban areas
• less outmigration from rural areas
• poor urban economies
• rural quality of life
• C. Beale, ERS, USDA, 2000.

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Ag Mining Counties on the Decline . . .

• High proportion of older people (deaths gt births)
• Land-based tax system stresses remaining farmers
• Results in lower tax revenue for public
  infrastructure (hospitals, schools, roads,
  utilities)
• But
• Rural/nonmetro systems that are on an up trend
  are able to obtain development in
  services-oriented industries that are propelling
  the metro economy.
• --C. Beale, 2000

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Disturbing Trends for Rural/Ag OK

• 1974 1998
• Total personal income from farming gt6 lt1
• Off-farm income as of total
• personal income lt94 gt99
• Per farm net income 5,000 6,500
• Direct govt. payments as of total
• cash receipts lt1 gt7
• Woods, Sanders, et al., research in progress,
  2000.

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New Hurdles for 21st Century Rural Economy

• Globalization
• Need to meet global standards competition (in
  face of consumer sovereignty and price matter)
• Workforce
• Attracting skilled workers (in face of
  outmigration, brain drain, aging)
• Infrastructure
• Investing in upgraded utilities, including
  technology access (in face of crumbling
  infrastructure and weakened tax base)
• Commoditization
• Process/transform commodities to value-added
  products
• M. Drabenstott, Center for Study of Rural
  America, Federal Reserve of Kansas City, 2000

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New Horizons

• Tapping the digital economy
• Tele-tech promises a new paradigm--Knowledge
  industries locate anywhere.
• Broadband infrastructure
• Skilled entrepreneurs
• Skilled workforce
• High quality of life
• Energizing entrepreneurs--need for capital,
  support
• Leveraging new agriculture--supply chain
  integrators
• Selling scenery space
• (M. Drabenstott, 2000)

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Rural Policy Options

• Business/Job Development
• Education
• Rural Health
• Rural Poverty
• Farm Labor
• Development Planning/Financing

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FAMILY COMMUNITY POLICY

• GOAL Maintaining/improving family/ community
  stability growth
• OPTIONS
• 1. Free Market 5. Credit
• 2. Price Supports/Target Prices/ 6. Technology
• ARP/Other Farm Programs 7. Infrastructure
• 3. Employment/training 8. Buffalo Commons
• Programs 9. Other???
• 4. Alternative Economic
• Support Programs

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SUMMARY

• Farm policy alone will not solve rural problems
• Migration patterns are cyclical, but trend is for
  urban-suburban concentration
• Rural problems are largely economic
• Diseconomies market failure require either
• Acceptance of some rural community failure, or
• Some government intervention
• Sources
• text
• guest instructor
• Browne, et al. Sacred Cows Hot Potatoes

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Sources

• C. Beale, Changes in Population Characteristics
  Implications for Whats Ahead for Rural
  America, National Public Policy Education
  Committee Annual Conference Proceedings, Albany,
  NY, ERS, USDA, 2000.
• Browne, et al. Sacred Cows Hot Potatoes
• M. Drabenstott, New Hurdles, New Horizons The
  Rural Economy in the 21st Century, Center for
  Study of Rural America, Federal Reserve of Kansas
  City, National Public Policy Education Committee
  Annual Conference Proceedings, Albany, NY, 2000.
• R. Knutson (see course text).
• M. Woods, guest lecture, 31 Oct 2002.
• Woods, Sanders, et al., research in progress,
  2000.