1. 11a. WHAT ARE THE KEY RURAL POLICY ISSUES?
Larry D. Sanders
Fall 2005
Dept. of Ag Economics Oklahoma State University

2. 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.

3. TRADITIONAL VIEW OF FARMING & RURAL LIFE
WELL-BEING
RURAL
COMMUNITY
WELL-BEING

4. ALTERNATIVE MODEL OF FARMING & RURAL LIFE
WELL-BEING
RURAL
COMMUNITY
WELL-BEING
RURAL
NONFARM
ECONOMY

5. 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

6. 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.

7. Ag & Mining Counties on the Decline . . .
High proportion of older people (deaths > 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

8. Disturbing Trends for Rural/Ag OK*
Total personal income from farming >6% <1%
Off-farm income as % of total
personal income <94% >99%
Per farm net income $5,000 $6,500
Direct govt. payments as % of total
cash receipts <1% >7%
*Woods, Sanders, et al., research in progress, 2000.

9. “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

10. “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)

11. Rural Policy Options Business/Job Development Education Rural Health
Rural Poverty
Farm Labor
Development Planning/Financing

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

13. 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

14. Sources
C. Beale, “Changes in Population Characteristics: Implications for What’s 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.