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Farm States Planting Seeds of National Recovery? Farm States Planting Seeds of National Recovery?

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Economy / ECONOMY

Farm States Planting Seeds of National Recovery?

Rural areas are healthier than most, but they still need help.

People listen as President Obama speaks during the opening session of the Rural Economic Forum at Northeast Iowa Community College in Peosta, Iowa, on Tuesday.(Joe Raedle/Getty Images)

August 16, 2011

The unemployment rate sits at 5.6 percent in Dubuque County, Iowa, where President Obama stopped his bus tour on Tuesday for a forum on the state of America’s rural economy. That’s the county’s highest rate for a summer month in 15 years. It’s also nearly 4 percentage points below the nationwide average.

In a corn husk, that’s the rub of Obama’s three-day farm-state swing this week: He’s promising more help to residents who haven’t seen times this hard in a while – but who still wake up every morning to a brighter job situation than most of the country.

Rural America, like the rest of the country, is “trying to recover for the most part” at the moment, said Robert Gibbs, chief of the Farm and Rural Household Well-Being Branch in the Agriculture Department’s Economic Research Service. He added. “If you looked at a big national map, it’s not like you’d say, ‘Wow. There’s hot, rapid growth in big areas.’ ”

 

On the positive side for farm country, consider these statistics, several of which the White House touted in a report issued shortly before Obama flew to the Midwest: Job creation in rural areas grew faster over the last two years, as a share of jobs lost during the Great Recession, than it did elsewhere.

Boosted by high food prices, farm-sector income rose 27 percent last year and is projected to jump another 20 percent this year. Agricultural exports increased by more than 10 percent from 2009 to 2010.

The unemployment rate is falling relatively quickly in Minnesota (6.7 percent), Kansas (6.6 percent), and Nebraska (4.1 percent). Iowa, at 6.0 percent, has held steady for the past two years.

There’s plenty of reason to believe that those numbers will only improve in the coming years, because rural America is quietly cultivating serious, job-creating innovations in agriculture and biosciences. A study out this month from research giant Battelle details how rural innovators – particularly from land-grant colleges – are pioneering new and marketable advancements in bio-energy, health care, and crop production.

“Science is really allowing us now, on the back of advancements in genetics, to really take agriculture biosciences and agriculture to a new level. The U.S. is the leader in that,” Battelle’s Simon Tripp, the lead author of the study, said in an interview.

A related Battelle study found that two of Iowa’s largest economic-development drivers since 2005 have come from factories churning out agricultural equipment and from plants converting bio-materials into advanced oils, fuels, and other products. “It’s a manufacturing industry,” Tripp said, “where the U.S. is the leader and poised to be a leader out into the future.”

America's economic "comeback," Obama told a crowd in Iowa on Tuesday, is “going to start on the ranch lands and farms of the Midwest, in the workshops of basement inventors, in the storefronts of small-business owners.”

But the president must be mindful that Iowa has yet to make up all the jobs it lost during the financial crash that ran through the first half of 2009 – and that the state has lost jobs, on net, since he was inaugurated.

As Obama went on to say, “A lot of folks are looking for work. Even if you have a job or a small business or a farm, you’re maybe getting by with fewer customers or making do with fewer shifts or less money in tips. And for a lot of families in rural parts of the country, these challenges aren’t new.”

The administration has stressed connectivity in its efforts, rolled out this week, to boost rural growth.

The White House announced new partnership on Tuesday between the the Labor and Agriculture departments to increase access to job-search and training information for rural job-seekers. USDA field offices will be deployed to provide Labor Department job-search employment information to cut down on the distance rural Americans have to travel to access that material.

In addition, the USDA and the Small Business Administration will open a dialogue with investors who work with businesses in rural areas, SBA Administrator Karen Mills said in a conference call on Monday.

Charles Fluharty, president and CEO of the Rural Policy Research Institute, praised the White House’s strategy. “This is the first time that a president has committed to thinking about rural-policy dynamics … that cross sectors,” Fluharty said. “We’ve had far too many programs without a vision or an outcome, without any alignment” with other federal agencies, he said.

Other analysts are more skeptical. “The secretary of Agriculture has had the responsibility to coordinate rural policy for decades,” said Maureen Kilkenny, a senior fellow at the National Center for Food and Agricultural Policy, in an e-mail interview. “Same menu, new name?”

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