| WILLMAR - A Federal Reserve Bank official says another farm bill will
not reverse years of economic decline and population loss in the rural
agricultural mid-section of the United States.
"In the 1990s, we spent $104 billion on direct government
payments,'' said Mark Drabenstott, vice president and director of the
Center for the Study of Rural America at the Federal Reserve Bank in
Kansas City.
"Yet in the counties that depend on agriculture as the leading
source of income, three of four had sub-par economies, and one out of two
(counties) lost people,'' Drabenstott told participants at a rural
economic development conference on Monday in Willmar.
"Rural America adds a lot of value to the nation, but it's got
some big challenges ahead of it. We don't think all of those challenges
are going to be met with yet one more farm bill,'' he said. "We think
it's probably going to take a fairly new framework to think about rural
policy, ask ourselves what the goals are and think about some new
programs.''
In talking about "new rural policies for Woebegon,'' Drabenstott
said a better economic future will not come about in the same kind of
business model where farmers take their corn to the elevator, weigh it and
go home.
He said farm policy for the past 70 years was geared to provide a safe
and abundant food supply, conserve resources and financially assist
farmers. But he said the one-size-fits-all policy will not help the
diverse regions of the United States.
"We can't focus on just helping farmers,'' said Drabenstott, whose
grandparents lived in Hector. "Our assumption was if we helped
agriculture from coast to coast, rural America would take care of
itself.''
Although traditional crops will continue to be grown, Drabenstott said
farmers will need to look at growing value-added products such as corn for
the pharmaceutical industry and forming networks to sell crops directly to
consumers.
Drabenstott said the new business model "will require
collaboration by producers, and producers and processors, and communities
and processors and farmers. It will be a very, very different business
model.''
"We think there are some huge challenges facing rural America, and
it may be time to think about a very serious look at how we deal with
those, and we're not sure what the institutional innovations might be, but
perhaps they might be on that order,'' he said.
The focus must also shift to improving medical care and entertainment
and cultural amenities in communities, helping farmers work together, and
making regions more competitive.
"In the future, agricultural policy cannot be rural policy,'' he
said. It is very different now because the regions of the United States
are highly diverse, he said.
Drabenstott was among the speakers at the Agriculture and Rural
Development Community Growth and Investment Conference at the Willmar
Conference Center.
The event brought together about 100 political leaders, economic
developers, producers, bankers and others to share ideas for rural
economic development and diversification.
"Rural economic diversification is certainly a long-term
process,'' said Rebecca Yanisch, Minnesota commissioner of trade and
economic development. "We have to be focused, to keep plugging away
at the major issues facing rural Minnesota and at the same time be
flexible enough to change if we discover better ways to get things done.''
"I think it's essential that we start harnessing the agricultural
engine to the other engines of the state so that we can get out of this
recession a little bit sooner,'' said Harold Stanislawski of Fergus Falls,
agricultural development specialist for the Minnesota Department of
Agriculture. "If we don't do that, there's going to be other
industries that are going to suffer, particularly the renewable fuel
industry.''
One way to spur economic development might be with tax-free renaissance
zones. Robert Craig, director of the Agriculture Development Division of
the Michigan Department of Agriculture, said the zones have helped create
400 jobs and a $400 million investment by agriculture and food-processing
companies during the past several years.
In South Dakota, the state and leaders of 14 eastern counties bordering
Minnesota developed a marketing plan to increase the number of livestock
and dairy cattle along the I-29 corridor, and attracted a $50 million
cheese plant to the state, said Roger Schiebe, South Dakota agriculture
development director.
Wilt Croonquist, director of the Kandiyohi County Economic Development
Partnership, described the conference as a team-building event.
"The community has to be behind it and the business people,'' he
said. "We need to look at renaissance zones, it's clear-cut to me, to
see if they make sense for our area.'' |