Extension Communications
3614 Administrative Services Building
Ames, Iowa 50011-3614
(515) 294-9915
10/25/99
Contacts:
Mark Edelman, Extension Economics, (515) 294-3000, x1edelma@exnet.iastate.edu
Del Marks, Extension Communication Systems, (515) 294-9807,
dkmarks@iastate.edu
PLAIN ECONOMIC SENSE
For release Nov. 1, 1999
Column 387
Economic Prospects for Farm-Dependent Counties
By Mark A. Edelman
Extension Public Policy Economist
Iowa State University Extension to Communities
One of the more interesting presentations at the recent "National Symposium on the Future of American Agriculture" held in Athens, Ga., was by Mark Drabenstott, vice president/director of the Kansas City Federal Reserve Bank's Center for the Study of Rural America.
One of the trends presented was the 1995-98 average annual percent change in job growth for various categories of nonmetro counties. Nonmetro counties as a whole averaged a little over 0.8 percent per year during this period. The rural counties with the fastest job growth were service-based and government-counties. Their job growth was about 1.2 percent per year. Non-specialized counties were growing a little under 1 percent per year. Mining-dependent counties were growing at about 0.7 percent. Job growth in manufacturing-dependent counties was at 0.5 percent per year.
What about the agricultural dependent counties? Jobs growth was about 0.25 percent per year in farming-dependent counties. Now remember this was during a relatively good period for agriculture. Net farm income was relatively high during 1995, 1996, 1997, and for the first half of 1998. Yet, the jobs growth in the agricultural dependent counties was about half of the rate in comparison to the next lowest category of nonmetro counties.
What does it mean? Well for one thing, if Drabenstott's numbers are borne out by other indicators and longer term data, it means that one of the longest held beliefs and cornerstones of farm policy is dead. Politicians and farm interests have espoused the belief that "the best way to help rural America was to pump more dollars into farm programs. If you solve agriculture's problems, the problems facing rural America would go away. What is good for agriculture is good for rural America."
While this notion may have been true in the days when 25 percent of the nation's population lived on farms and another 25 percent in rural communities, Drabenstott's numbers challenge the validity of this notion in today's economy. Why? Well, those communities that place their economic development resources primarily on agriculture alone show the slowest job growth.
In contrast to what many people may believe, rural America has made much progress in recent decades. In 1950, Drabenstott's national charts show that about two-thirds of the nation's nonmetro counties were agriculture dependent. Today, less than 15 percent are agricultural dependent counties. Agriculturally dependent counties are those that derive more than 20 percent of their economy from agriculture. However, the cause for concern is that most of these counties are located in the Great Plains states, Minnesota and Iowa. Drabenstott ended his comments by suggesting that the federal policy and states concerned about agriculturally dependent counties should look at the "One Georgia Plan" that was announced at the conference.
Sometimes it is good to get out and see a little of the rest of the world. The governor of Georgia earlier spoke to the Symposium audience and announced the formation of a $1 billion Georgia Rural Development Fund that is going to be targeted to 40 counties that constitute the more rural counties of Georgia--many of them agriculturally dependent. The purpose of the One Georgia Plan is to invest in rural infrastructure, economic diversification, workforce skills training, entrepreneurialism, value-added agriculture and other rural development endeavors. The goal is that rural Georgians will experience some of the income growth benefits that have been experienced around the Atlanta metro area, and that rural Georgia will contribute more to the state's overall economy. What a concept--investing something to earn a higher return.
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