Swept Away: Chronic Hardship And Fresh Promise

SWEPT AWAY: CHRONIC HARDSHIP AND FRESH PROMISE
ON THE RURAL GREAT PLAINS

A poor man’s field may produce abundant food, but injustice sweeps it away.

Proverbs 13:23, (New International Version)

This report and its findings represent a modern day illustration of this passage from Proverbs – the people of the rural Great Plains are hard-working and abundant producers, but their livelihoods and communities are being swept away by the failures of public policy and a widening economic gulf between rural and urban areas of the region.

Swept Away is the third in a series of reports by the Center for Rural Affairs detailing the socio-economic conditions of the rural Great Plains covering the period from 1970 to 2000. In this period of time – roughly a generation – we have found the region’s rural communities, particularly its agriculturally-based communities, beset by poverty rates chronically higher than the metropolitan rates; incomes and earnings significantly less than those in metropolitan areas; and continued depopulation that has resulted in a return to the “frontier” in many areas.

The most disheartening aspect of these findings is that they have changed little over the 30 years encompassed by our reports – in general, the economic position of agriculturally-based communities of the region have remained the same in comparison to more urban areas of the region. State and federal policy toward these communities has been either indifferent or ineffectual, or in some cases, primarily in agriculture, harmful. To some the future of these communities is very much in doubt. Will this in effect be the last generation to inhabit the rural Great Plains? Will these demographic, economic and policy forces figuratively sweep communities off the map?

We think the future of these communities holds abundant promise if a new rural development paradigm is swept in. Policymakers and communities in the region must recognize the character of the region is based in entrepreneurial activity and must build rural development strategies around that character. Any rural development model for the region must recognize that cookie-cutter policies and strategies that work in metropolitan areas have not and will not work in most rural communities. Finally, and possibly most importantly, the region and its people must make the status of their agriculturally-based communities a priority and focus thought, strategies, initiatives and resources upon them.

Sweeping in such a new model of rural development will prevent the agriculturally-based communities of the region from being removed from the map in another 30 years. Then we can write a modern day Proverb – The field produces abundantly, and we value it justly.

EXECUTIVE SUMMARY

Swept Away: Chronic Hardship and Fresh Promise on the Rural Great Plains describes the economic conditions of agriculturally-based communities in the six-state region of Iowa, Kansas, Minnesota, Nebraska, North Dakota and South Dakota. We identified 182 counties (of 503) throughout this region as having an agriculturally-based economy (20 percent or more of county income from agriculture).

Of these counties, 149 counties are classified as the most rural counties of the region – small in population, with no population center of 2,500 or more. We have dubbed these counties “Rural Farm” counties. Another 33 counties are classified as “Urban Farm” counties, agriculturally-based with a population center of between 2,500 and 19,999.

Together, these agriculturally-based counties comprise over 36 percent of the counties in this six-state region and about 7 percent of the region’s population.

Based on United States Census data and annual data from the United States Bureau of Economic Analysis, Regional Economic Information System, the report finds the following characteristics of agriculturally-based counties in this region (with special emphasis on rural farm counties):

Population Decline. Together, the two classifications of agriculturally-based counties lost nearly 9 percent of their population from 1990 to 2000. Conversely, the region gained over 7 percent in population during that period, with nearly all the population gain in the 50 metropolitan counties of the region. Population decline was most acute in the smallest counties, which lost over 6 percent of their population during the period.

Greater Poverty. The percentage of people living below the poverty level in the smallest agriculturally-based counties is over 60 percent greater than in metropolitan counties (13 percent vs. 8 percent). Poverty rates in the larger agriculturally-based counties are also greater than in metropolitan counties.

Widespread Poverty. Poverty in the agriculturally-based counties of the region is not in isolated groups within these counties. Rather, it represents the tail end of a large group of low-income households. Over one-fifth of households in agriculturally-based counties have annual income less than $15,000 (21 percent in rural farm counties, 17 percent in urban farm counties). About one in eight metropolitan households have such low household incomes. Meanwhile, nearly twice as many metropolitan households as rural households have annual incomes of $50,000 or more.

Low Income and Earnings. Income and earnings in agriculturally-based counties are significantly lower than in metropolitan counties. The annual per capita income in rural farm counties is 73 percent of that in metropolitan counties. The gap increases when only earned income is considered. Annual per capita earnings in rural farm counties are barely half that in metropolitan counties; for the larger agriculturally-based counties, earnings are 60 percent of those in metropolitan counties.

Reliance on Unearned Income. Agriculturally-based counties have a significant dependence upon unearned income (e.g., Social Security). Over 40 percent of annual per capita income is from unearned sources (45 percent in rural farm counties, 41 percent in urban farm counties). In general, we found that as county population size increased the dependence on unearned sources of income decreased.

Persistent Low Earnings and Income. Despite volatility in the agricultural sector of the economy, earnings in agriculturally-based counties were persistently low. In every year from 1990 to 2000, earnings in rural farm and urban farm counties trailed those of other classifications of counties, while annual per capita incomes of rural farm, urban farm and nonfarm counties significantly trailed metropolitan incomes in every year. Agriculturally-based counties also did not follow the trend of steady upward earnings found in metropolitan counties and the less pronounced upward trend in nonfarm counties.

Entrepreneurial Character. We found agriculturally-based counties to be extraordinarily entrepreneurial in character. In rural farm counties, 42 percent of the jobs are proprietorships (34 percent in urban farm counties; only 14 percent in metropolitan counties). Of course, that is to be expected in counties where there are still a significant number of farmers and ranchers. Yet, it is important to note that nonfarm proprietors outnumber agricultural proprietors in both types of agriculturally-based counties. Nonfarm proprietorships are where much of the job growth is occurring in agriculturally-based counties. Despite population declines in agriculturally-based counties, nonfarm proprietorships grew at the same or greater rates in those counties as in metropolitan counties.

Two important caveats are in order. First, even though these counties are classified as “agriculturally-based,” they are not populated solely by farmers and ranchers. Despite the fact that the economies of these counties are largely dependent upon agriculture, 80 percent or more of their residents possess non-agricultural employment. Second, the data used for this report are for a period that ends in 2000. Any affects from the current recession and economic slowdown are not included.

While this report does not pretend to be a comprehensive review of either the economic development policies of each state of this region or the rural development policy of the federal government, we do offer the following implications and recommendations for pubic policy apparent from our work in agriculturally-based communities and from the data presented in this report:

States should develop comprehensive development policy for rural and agriculturally-based communities. This policy would include a paradigm shift from competitiveness to cooperation, greater regional collaboration, establishment of a specific public philosophy of sustaining these communities, and development of greater capacity of communities through inter-local cooperation.

Increased support, particularly by states of “New Generation Agriculture,” a model of agriculture rooted in family-scale farming and ranching, and that includes strategies and activities seeking to re-establish the link between farmers and ranchers and consumers by providing food and fiber more directly to consumers through cooperatives, community-based value-added activities, and direct marketing.

Cultivation of a new generation of farmers and ranchers through federal and state initiatives that provide incentives to people to enter farming and ranching and that provide beginning farmers and ranchers access to agricultural assets.

Increased support, particularly by states, of programs that provide lending capital and technical assistance to microenterprises and small businesses.

Integration of conservation programs and community development to provide an opportunity for communities and land owners to realize economic advantage from a resource advantage.

Realize economic advantages from the large amount of passive income in
agriculturally-based communities by providing incentives to private investment in those communities.

Federal rural development policy should be regionally based rather than nationally based so as to address the unique issues, challenges and opportunities in the agriculturally-based communities of this six-state region.

Economic development of agriculturally-based communities must be accompanied by
the building of human and organizational resources.