Rural Development Extension in an Era of Economic Transition

Farm Business Management Update, August 2001

By David Lamie and Gary Larrowe

Rural communities have an incredible amount to offer. But it requires discovering and using the unique assets of the community to solve problems and exploit opportunities rather than spending time and energy searching for a "fix" from the outside. For instance, many small rural communities would likely be better off growing their own businesses or taking care of existing ones rather than hoping to attract a major new business from the outside. Rural local governments can serve as a catalyst in the process of community economic development by bringing together people interested in progressive strategic change, listening and responding to their ideas, and leveraging community level efforts through outside connections.

Rural communities need to find ways to cross between the "inside" of the community and the "outside" world, while at the same time utilizing the most important asset of the community, its people. Extension has made these connections very well in Virginia in the fields of Agriculture and Natural Resources, Youth Development and Family & Consumer Sciences. But, other fields are ripe for the harvest (information technology and community, economic, and educational development) that many Extension organizations around the country are embracing, for instance.

Below are a set of points that Virginia Cooperative Extension agents and Extension Leadership Councils might consider as they plan for the future. Today, more than ever, there is a place for Extension programs that will continue to build on the base of impacts to this point. Programs of the past and present will always be needed as well as the expansion of the model to provide opportunities in the future.

Point One: Virginia Cooperative Extension is not only interested in supporting farmers but in supporting farm families.

• For farm families, off-farm income is often more important than farm-based income. In 1998, an average of 88 percent of farm operator households' income came from off the farm. The dependence on off-farm income decreases as farm size increases. (USDA-ERS)

• Virginia agriculture is dominated by smaller farms. (VASS)

• Maintaining viable farm families in production agriculture relies upon their ability to secure good jobs off-farm. These jobs provide necessary income and non-income benefits like health insurance.

• Farms near metropolitan areas have substantially more opportunities for securing good off-farm employment while those in more remote rural areas have fewer opportunities.

• Even in regions where a viable industry exists, technological change will likely reduce the need for labor, releasing human capital for other activities. As the need for labor in rural areas shrinks, rational people will seek opportunities where they can find them.

• If it is desirable to maintain a population base in rural Virginia, attractive employment opportunities must be available within reasonable commuting distances.

Point Two: The new economic geography favors more densely populated (metro) areas.

• Many firms locate near each other to exploit the availability of producer services, modern infrastructure, and access to consumers.

• Rural counties have traditionally been more dependent upon agriculture, natural resource, and mining industries. Manufacturing plants that have located in rural areas have traditionally provided low-skill, low-wage jobs. Examples contrary to these patterns are rare.

• Global competition has put domestic rural low-skill, low-wage workers in direct competition with overseas competitors.

• Productivity increases in agriculture and manufacturing have decreased the need for employees in these sectors.

• The best jobs in the expanding service sector seem to favor metro areas.

• High-tech firms utilizing small-batch, flexible production techniques require greater proximity to skilled labor, markets, and information.

Point Three: Information Technology (IT) development in rural areas may not guarantee success, but perpetuation of the status quo will not work either.

• Developing IT infrastructure is a necessary, not sufficient, condition for the development of high-tech industry. If other quality of life factors are not present, developing IT capacity may only serve to increase the flow of residents (now with IT skills) out of the rural community.

• Information technology alone will not create viable rural communities. Other community attributes complementary to community success must be in place.

• Households with income of $75,000 and higher, in urban areas, are more than twenty times as likely to have Internet access than rural households at the lowest income level. (Towards Digital Equality: The U.S. Government Working Group on Electronic Commerce, 2nd Annual Report, 1999).

• High-speed data has the potential to make rural areas less isolated, and high-speed applications such as telemedicine can significantly improve rural quality of life.

• Some sources estimate that electronic commerce for agriculture will be $70 billion by 2003. This amount includes market participation from the largest agribusiness to the smallest family-owned orchard. (Rural America's Stake in the Digital Economy, Federal Reserve Bank of Kansas City, May 2000)

• Linking the human capital engine (the school system) with the IT development effort makes sense from the standpoint that the best jobs in the future will require IT skills. Like language acquisition, fundamental IT learning likely takes place at early stages of development.

• Enhancing rural communities' ability to engage in public discourse and deliberation of public issues can help them move forward. IT can be used to enhance community dialogue and to unleash the creative capacities of all citizens, which may be threatening to those who do not have IT skills...or those who want to hold onto personal power in the community. But, if the community is to transition, loosening the power grip may be necessary.

• Altering the culture of the community by creating more opportunities for civic discourse can make the community more attractive to professionals and may help to retain the youth of the community.

Point Four: Land Grant Institutions across the country have supported educational programs to help rural communities find and sustain their niche in the global economy.

• Economically viable niches continue to evolve. Extension educational programs must be continuously evolving to keep up with the changes.

In order for Extension to make this transition, we must create appropriate incentives within the Land Grant for the existing technology knowledge base to be applied to rural Virginia and to expand research on rural development problems. Programs designed to help rural communities develop the capacity to operate in the new economy must receive adequate attention.

New Publications

From REAP Cotton Pricing Guide by Julia Marsh and David Kenyon. This publication, like its companion publications, Wheat Pricing Guide, Corn Pricing Guide, and Soybean Pricing Guide, describes how producers can make pricing forecasts as data become available and price based on that information. To obtain copies of the Cotton Pricing Guide contact the REAP office at (540) 231-9443 or by email at karenm@vt.edu. All pricing guides are available the REAP website: www.reap.vt.edu then go to publications and click on "REAP Reports."

Contact the authors at lamie@vt.edu and glarue@vt.edu

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