C0MMENTARY



Putting our eggs in more than one basket

 Rural America is far less dependent upon production agriculture today than it was when I was a girl growing up on a farm in Indiana. In those days, when you graduated from high school, you had two basic life choices to make: A) take the steps that would eventually enable you to assume control of your family's farm, or B) kiss the farm goodbye and move to town to find your future. Today, for many rural people choices arc increasing. That's because every year, an increasing number of fight industry, high-tech and service industry firms are relocating all or some of their operations to rural communities. These businesses have found that rural America is not only a great place to five, but a great place to do business. A ready supply of highly motivated workers with a strong work ethic is one of the major attractions. These firms also have learned that many suburban and urban workers arc anxious to escape the "rat race" of city life.

Improvements in the rural infrastructure telecommunications, water and sewer, transportation, etc. are helping to fuel this movement. The programs of USDA Rural Development are playing a major role in accelerating the rate of business diversification in rural areas and in helping electric cooperatives and others to finance improvements in rural infrastructure. A little more than 65 years ago, President Franklin Delano Roosevelt set the stage for the transformation of rural life when he created USDA's Rural Electrification Administration. A series of articles in this issue (beginning on page 6) provide an overview that shows how important this act was to the nation, and how vital these programs remain for the future of the rural population.

Few in agriculture would deny that this trend of rural economic diversification is a healthy one. It can even help hold families together, as in die case where one child stays home to run die family farm while her brother buys a nearby house and takes a job at an Internet service provider that located in the county seat. Even if the trend toward fewer, larger farms stops tomorrow (and few believe that it will), we need this type of economic diversification to prevent many rural areas from becoming de-populated. But does this mean that the rural economy is no longer heavily dependent on the farm economy? Absolutely not! Without a strong, thriving farm sector, the overall rural economy will suffer severely in most regions. The fate of farmers and farmworkers is inexorably linked with the general fiscal health of rural America.

Value-added processing cooperatives are another vital link in this chain of economic diversification. They represent a way to achieve diversification and vertical integration within die fanning industry. These cooperatives have the power to transform a community from one that is solely a producer of raw commodities into a producer of finished, or partially finished, goods. These cooperatives not only generate higher income for farmers, they create jobs and boost the local tax base. They also help attract "spinoff" businesses, new housing, schools and community facilities to rural communities.

I hope you'll read the article in this issue (page 16) based on five case studies, funded under a cooperative research agreement from die Rural Business-Cooperative Service of USDA Rural Development. It provides insight into how cooperatives benefit rural communities. These studies include a look at how South Dakota soybean growers tired of shipping their raw crop out of town and then buying back the soymeal that was processed from it in other states opened their own soybean processing plant. You'll also learn why Missouri corn growers decided to go into the ethanol business and how changes in pork production methods are helping an Iowa farm supply co-op gain new economic strength. In each of these and the other cases cited, the researchers found that the rural communities have benefited greatly from these new business ventures.

So let's continue placing our economic eggs in more than one basket, without ever forgetting that agriculture is still the foundation of the rural economy and will be for a long, long time to come.






Jill Long Thompson,
Under Secretary, USDA Rural Development



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