It's Time for a Rural Renaissance
Almost a century ago, the Rural Electrification Act of 1936, enacted on May 20, 1936, provided federal loans for the installation of electrical distribution systems to serve isolated rural areas of the United States. The funding was channeled through cooperative electric power companies, hundreds of which still exist today.
It was one of many New Deal proposals by President Franklin D. Roosevelt and helped bring rural America into the modern era. It was a sterling example of how the federal government can spark investment within the private sector in places that might not ordinarily get it.
Another example of a federal program making a difference in rural America was Title V of the Housing Act of 1949. It authorized the Department of Agriculture to make loans to farmers to enable them to construct, improve, repair, or replace dwellings and other farm buildings to provide decent living conditions for themselves or their tenants.
USDA made grants and combinations of loans and grants to those farmers who could not qualify to repay the full amount of a loan. While the law initially targeted farmers, it was amended to enable USDA to make housing loans and grants to rural residents in general.
Today, we have more than 400 federal programs available ostensibly dedicated to rural development, but navigating that maze is a high bar for anybody, let alone the part-time volunteer elected officials and the bare-bones staffs that make up many local rural governments and economic development organizations.
"That leaves most rural communities starved for investment. Very few can get the type and level of resources necessary to reinvent their economy or unleash the full potential of their human, intellectual, and natural capital as they face rapid change," wrote Tony Pipa, a senior fellow at the Brookings Institution, in an opinion piece in The New York Times in December.
"We need a renaissance of rural policy to enable a renaissance of rural America," he wrote.
Perhaps we may see it. A bipartisan consensus within Congress resulted in $65 billion in the Infrastructure Investment and Jobs Act to address the lack of strong and stable internet service in large swaths of rural America.
Rural small businesses and farmers are eligible to apply for $1 billion in U.S. Department of Agriculture grants to invest in clean energy. The program went into effect on April 1.
The money, funded by the Inflation Reduction Act (IRA), is to be distributed through the USDA's Rural Energy for America Program (REAP) and is meant to further the Biden administration's efforts to cut climate-harming emissions by installing solar panels and wind turbines and/or investing in biomass projects to generate renewable fuels.
The IRA provided more than $2 billion for REAP, which the administration anticipates will fund projects for 41,500 farms and small businesses, according to the USDA website.
The Biden administration has also started the Rural Partners Network to embed federal staff members in rural communities to help them identify and secure federal resources, the program is limited to select communities in just 10 states and Puerto Rico.
Today, there are 46 million rural residents, which is just 14 percent of the U.S. total. This is the smallest percentage of the population to reside in rural areas in U.S. history.
Though population declines have been widespread -- only about a third of nonmetropolitan (rural) counties gained population between 2010 and 2020 -- rural America has become more racially and ethnically diverse.
From personal experience doing economic consulting work, I know that rural America is incredibly diverse and that different communities have different needs because they are so very different economically.
DeWitt, Arkansas, the rice capital of the U.S., is increasingly tied to hunting and fishing.
Tucked in the Allegheny Mountains, Thomas & Davis, West Virginia, has shifted from the coal and timber industries to a local economy driven by a vibrant arts community and outdoor recreation. Globe, Arizona still has active copper mining, and Eagle Butte, South Dakota has cattle ranches that stretch for miles.
For me to be effective, it's incumbent on me, an economic development consultant, to spend time in communities and ask the right questions of local stakeholders. It's a listening tour. It would be an act of sheer stupidity and audacity to come into the community thinking I had all the answers. But I do believe there are practical and tactical solutions out there. Understanding the dynamics of a community -- what makes it tick -- is paramount.
A common misperception equates rural America with agricultural America. That might be true in terms of land mass for many rural communities, but farming now accounts for just 7 percent of rural employment. Service jobs, retailing, manufacturing, and government employment all outweigh agriculture.
Final thoughts: Economic development is hard, especially in rural communities, some of which clearly have this left behind aura to them. Treasury Secretary Janet Yellen has spoken of “modern supply-side economics” — expanding economic capacity by investing in our human capital and public infrastructure.
For underserved communities outside of metropolitan statistical areas, I'm afraid that it is the only way for them to have a fighting chance for economic growth and survival. And I believe the federal government, partnering with state and local governments, can bring about positive change. We can look back in history and confirm it.
I'm no homer for the Biden administration. Far from it. But by placing more of an emphasis on bringing broadband internet to rural places, this administration has shown a willingness to bring opportunities to regions that have long faced barriers to full economic participation.
And that is what economic development is ultimately about -- giving people opportunities to better their lives.
Hey, if you would like to read the entire edition, seven additional stories, I will gladly comp you. Write to me at dbarber@barberadvisors.com Or better yet become a Tide Insider. Subscribe here.
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