Opportunities for Rural Economic Growth

by Patricia A. Barclay, Confidential Assistant for Under Secretary for Small Community and Rural Development, USDA, Washington, DC.

In 1890, two of every three Americans lived in rural areas, and 61 percent of these rural people lived on farms. They produced enough to feed themselves and the urban population as well. Now only 1 in every 50 Americans lives on a farm. They produce enough to feed themselves and the rest of the U.S. population, and they export huge amounts of food.

In the past, the traditional view of securing prosperity in rural America by increasing agricultural production and demand has been a focus of many Government policy decisions. If American farmers grow more crops that can be sold to an expanding number of markets worldwide, the population of rural America will prosper, the formula said.

In the 1990's, less than 2 percent of the population lives on a farm. Along with these changing demographics must come a new definition of rural prosperity a definition that includes more than simply higher prices for more crops.

It may be time to take another look at our definition of rural prosperity.

Smelterville and Bement

Take Smelterville, Idaho, a small rural town in the Coeur d'Alene Mountains where people traditionally either worked in the mines or operated businesses that sold products to the mine workers. Then the bottom dropped out of the lead market and the price of silver dropped below $4 an ounce. Shoshone County, where Smelterville is located, now has the highest unemployment in the State.

Or take Bement, Illinois. It's a railroad town in the east-central part of the State, typical of rural America, with small shops and businesses and the grain company by the railroad tracks. Until a few years ago, Bement followed the roller-coaster farm economy.

In response to the economic problems they were facing, these two rural communities found nontraditional solutions to rural economic development that combined work done by USDA scientists and the energy and creativity of private enterprise. They demonstrate that rural America need not be held hostage to the boom and bust cycles of the traditional agricultural sector.

In both cases, small companies applied research on cornstarch, performed by scientists at USDA's Agricultural Research Service, to create new product lines.

In Smelterville, Polysorb, Inc., produces and markets a super-absorbent that can be injected into the soil to make better use of water for trees, shrubs, and other plants. The company is designing the equipment used to inject the material. It has developed fuel filters to absorb water from hydrocarbon fuels, medical absorbents for treatment and therapy, kitty litter, and a cold gel pack for chilling a bottle of wine. Employment has increased from 15 to 50 people.

In Bement, Central Illinois Manufacturing Company employs 120 people and markets fuel filters based on the same cornstarch research, which developed "super slurper."

Now that's rural economic development.

A New Equation for Economic Revival in Rural America

Now we can attack rural economic problems from two sides: Grow more crops and manufacture products using those crops in factories close to the fields where the crops are grown.

Growing more of the traditional crops to sell at home and abroad has been the traditional approach to improving prospects for rural Americans. It is still a solid technique for bringing jobs into rural areas and making it profitable for a farmer to stay on the farm. It helps Main Street businesses, and means increased employment for the grocery store, the drug store, the local car dealer, and the insurance company. More farm jobs mean more Main Street jobs and more taxes for local government to provide better schools and parks, roads, law enforcement, and fire protection.

Highly absorbent Superslurper was developed from cornstarch by a team of ARS scientists. Today, it is found in body powders, absorbtion dressings, oil filters and soil additives, as well as diapers and batteries. Keith Weller/USDA 89BW1441-25

A Superslurper flake is swollen into a chunk that is over 99 percent water. Superslurper, which can be made as film, flakes, powder, or mat, absorbs about 1,400 times its own weight.

George Robinson USDA 92BWI142

But during the past decade America discovered that we are dealing with a global economy and global competition. While we can grow bumper crops of wheat, so can Australia and countries in South America. We all end up selling to the same customers. It becomes a matter of who has the lowest price whether because of economies of scale or because of government subsidies to the farmer. Therein lies the problem. Only an expanded private sector economy in rural America can guarantee the diversity of options that rural Americans must have to succeed economically.

So now comes the second technique, an important factor in the equation for economic revival in rural America: Manufacturing!