Needed: New Approaches To Keeping Rural America Strong
net for farmers and ranchers who face extreme volatility with prices and production. At least, until the Senate Agriculture Committee’s first 2012 farm bill hearing. Held in Washington, D.C. earlier
this month, the hearing focused on how the same type of risk management thinking for commodities should be applied to small towns, rural counties and regions. “Vibrant rural communities are critical for the eco-
nomic survival of all rural Americans, including farm families,” testified Chuck Fluharty, President and CEO of the Rural Policy Research Institute at the University of Missouri. One reason: Most farm households earn the major-
ity of their income off of the farm and many of those jobs are located in small towns or regional hubs. Ac- cording to USDA’s Economic Research Service about $49,500 of the $54,000 in median U.S. farm income is generated off the farm. For those with up to $250,000 in sales, it’s 75 percent of their income. Even for the largest commercial farms, the percent- age is still 20 percent. Farm households also benefit from the amenities
and services that their small towns may provide, whether it’s a school, health clinic, pharmacy, gro- cery store or the local café. Fluharty made the case to members of the U.S.
Senate Committee on Agriculture that the very same risk management approaches being considered for farmers should be employed for other entreprenuers and economic development practitioners, with the focus on three principles: • Creation of a more innovative, streamlined, flex-
ible, and regional approach to enable USDA RD to administer the remaining suite of recently-down- sized, but very effective economic development pro- grams in a more integrated, aligned, and leveraged framework, and wherever possible, in a regional con- text. • A regional framework to advance asset-based in-
novation and entrepreneurship, and above all else, align much more effectively and efficiently with other programs at sister federal agencies addressing sim- ilar needs. • Ensure a sufficient level of rural debt, venture
and equity capital, as well as an appropriate and flexible suite of federal instruments through which they are delivered, to meet rural financing need. The $28 billion difference With very significant reductions in Rural Develop-
ment Budget Authority, resulting from continuing reductions in annual RD appropriations over the past decade, Fluharty pointed out that rural com- munities are at a huge disadvantage compared to their urban counterparts. For example, in 2010, metropolitan counties re-
ceived $1,519 per capita for these community and economic development programs, compared to only $929 per capita in nonmetro counties. This differ- ence represents over $28 billion more that could have been made available to rural communities if the per capita funding levels were equalized. “With Rural Development Budget Authority being
further reduced, where is rural America to turn in the future?” Fluharty asked lawmakers. One place rural residents could look is to tax-ex-
empt foundations. But Fluharty pointed out that a huge rural disadvantage exists in the philanthropic community, as well. A 2004 report by the National Committee for Re-
sponsive Philanthropy, “Beyond City Limits: The Philanthropic Needs of Rural America,” found that out of 65,000 grant-making foundations, only 184 made grants characterized as “rural development.” “Rural America remains challenged by this long-
standing, differential disadvantage in philanthropic investment in its people, organizations, and institu- tions. And this is now more critical than ever, as fed- eral, state and local government resources continue
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ost of the debate over the 2012 Farm Bill has centered on building a better safety
to decline,” Fluharty pointed out in his written testi- mony. He also challenged the “generous subsidies” pro-
vided to foundation donors and suggested more in- vestigation is needed into why so many foundations are ignoring Rural America. Of the $46 billion given by foundations in 2010,
only 1 percent went to rural programming, Fluharty emphasized. “This geographic inequity has grown no better over
time, while rural community capac- ity shrinks and rural safety net needs grow exponentially,” he added. Senator Max Baucus (D-MT), who
chairs the powerful Senate Finance Committee and also serves on the Agriculture Committee, spoke to the Council on Foundations in May of 2006 and challenged foundation leaders to double their grant making to rural America in the next five years. As a result, about 180 repre- sentatives from foundations and nonprofits met, as part of the Council on Foundations, in his home state in 2007 to discuss how to get more money flowing into rural areas and small community foundations. By some estimates, there is as much as $40 to $50
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trillion dollars that retiring Baby Boomers will pass on to their heirs between now and the year 2050, with a good chunk of that wealth harbored in farm- land and other small town assets. The Kansas Association of Community Founda-
tion’s “Transfer of Wealth” research found that $66 billion will be transferred from one generation to the next in just the state of Kansas by 2020. They esti-
mated that much that wealth will flow to heirs who live outside the state, but about $3.3 billion or 5 per- cent could be preserved in community foundations. As a result of Baucus highlighting the issue, the
Council on Foundations promised more dialogue about the subject and called for studying the “trans- fer of wealth” in rural areas. But Council members also told rural leaders to build and control their own new philanthropic funds rather than rely on outside funders in the nation’s big cities for grant support. Messages like these have not been
By some estimates, there is as much as $40 to $50 trillion dollars
that retiring Baby Boomers will pass on to their heirs between now and
the year 2050, with a good chunk of that wealth harbored in farmland and other small town assets.
similar Nebraska initiative – and the Kansas Entre- prenurial Communities Initiative. The HomeTown Prosperity program focuses on de-
veloping and mobilizing leadership capacity; captur- ing wealth transfer through charitable giving; energizing entrepreneurship; and attracting and en- gaging young people. The Kansas Entrepreneurial Communities Initiative focuses on growth-oriented entrepreneurs and enhanced opportunities for at- tracting people and growing businesses. Results in communities like Atwood show that the effort is paying off, according to KFB. New families
” CONTINUED ON PAGE 11
lost on people like Harry Watts, Man- aging Director-Governmental Rela- tions at Kansas Farm Bureau, and one of the driving forces on rural de- velopment in his state. With initial funding from USDA
Rural Development and the Small Business Administration, Watts helped launch two rural development efforts, the Kansas HomeTown Pros- perity Initiative – based in part on a
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