[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
HEARING TO REVIEW INNOVATIVE
APPROACHES TO RURAL DEVELOPMENT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON RURAL DEVELOPMENT,
BIOTECHNOLOGY, SPECIALTY CROPS,
AND FOREIGN AGRICULTURE
OF THE
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
MARCH 31, 2009
__________
Serial No. 111-6
Printed for the use of the Committee on Agriculture
agriculture.house.gov
----------
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COMMITTEE ON AGRICULTURE
COLLIN C. PETERSON, Minnesota, Chairman
TIM HOLDEN, Pennsylvania, FRANK D. LUCAS, Oklahoma, Ranking
Vice Chairman Minority Member
MIKE McINTYRE, North Carolina BOB GOODLATTE, Virginia
LEONARD L. BOSWELL, Iowa JERRY MORAN, Kansas
JOE BACA, California TIMOTHY V. JOHNSON, Illinois
DENNIS A. CARDOZA, California SAM GRAVES, Missouri
DAVID SCOTT, Georgia MIKE ROGERS, Alabama
JIM MARSHALL, Georgia STEVE KING, Iowa
STEPHANIE HERSETH SANDLIN, South RANDY NEUGEBAUER, Texas
Dakota K. MICHAEL CONAWAY, Texas
HENRY CUELLAR, Texas JEFF FORTENBERRY, Nebraska
JIM COSTA, California JEAN SCHMIDT, Ohio
BRAD ELLSWORTH, Indiana ADRIAN SMITH, Nebraska
TIMOTHY J. WALZ, Minnesota ROBERT E. LATTA, Ohio
STEVE KAGEN, Wisconsin DAVID P. ROE, Tennessee
KURT SCHRADER, Oregon BLAINE LUETKEMEYER, Missouri
DEBORAH L. HALVORSON, Illinois GLENN THOMPSON, Pennsylvania
KATHLEEN A. DAHLKEMPER, BILL CASSIDY, Louisiana
Pennsylvania CYNTHIA M. LUMMIS, Wyoming
ERIC J.J. MASSA, New York
BOBBY BRIGHT, Alabama
BETSY MARKEY, Colorado
FRANK KRATOVIL, Jr., Maryland
MARK H. SCHAUER, Michigan
LARRY KISSELL, North Carolina
JOHN A. BOCCIERI, Ohio
EARL POMEROY, North Dakota
TRAVIS W. CHILDERS, Mississippi
WALT MINNICK, Idaho
-- --
______
Professional Staff
Robert L. Larew, Chief of Staff
Andrew W. Baker, Chief Counsel
April Slayton, Communications Director
Nicole Scott, Minority Staff Director
______
Subcommittee on Rural Development, Biotechnology, Specialty Crops, and
Foreign Agriculture
MIKE McINTYRE, North Carolina, Chairman
BOBBY BRIGHT, Alabama K. MICHAEL CONAWAY, Texas, Ranking
JIM MARSHALL, Georgia Minority Member
HENRY CUELLAR, Texas DAVID P. ROE, Tennessee
LARRY KISSELL, North Carolina GLENN THOMPSON, Pennsylvania
WALT MINNICK, Idaho BILL CASSIDY, Louisiana
Aleta Botts, Subcommittee Staff Director
(ii)
C O N T E N T S
----------
Page
Conaway, Hon. K. Michael, a Representative in Congress from
Texas, opening statement....................................... 3
Lucas, Hon. Frank D., a Representative in Congress from Oklahoma,
opening statement.............................................. 5
Prepared statement........................................... 6
McIntyre, Hon. Mike, a Representative in Congress from North
Carolina, opening statement.................................... 1
Peterson, Hon. Collin C., a Representative in Congress from
Minnesota, opening statement................................... 4
Prepared statement........................................... 5
Witnesses
Lambe, William, Associate Director, Community and Economic
Development Program, University of North Carolina ay Chapel
Hill School of Government, Chapel Hill, North Carolina......... 7
Prepared statement........................................... 8
Dr. Markley, Deborah M., Managing Director and Director of
Research, RUPRI Center for Rural Entrepreneurship, Chapel Hill,
North Carolina................................................. 12
Prepared statement........................................... 14
Yost, Jeff, President and CEO, Nebraska Community Foundation,
Lincoln, Nebraska.............................................. 18
Prepared statement........................................... 19
Supplemental material........................................ 33
Supplemental material........................................ 55
Thompson, Robert J., Executive Director Of The Androscoggin
Valley Council Of Governments and Vice-Chair, Rural Development
Task Force of the National Association of Development
Organizations (NADO), Auburn, Main............................. 21
Prepared statement........................................... 23
Smith, Randy, President, Rural Community College Alliance Altus,
Oklahoma....................................................... 26
Prepared statement........................................... 28
Submitted Material
Submitted questions.............................................. 63
HEARING TO REVIEW INNOVATIVE APPROACHES TO RURAL DEVELOPMENT
----------
TUESDAY, MARCH 31, 2009
House of Representatives,
Subcommittee on Rural Development,
Biotechnology, Specialty Crops,
and Foreign Agriculture,
Committee on Agriculture,
Washington, DC.
The Subcommittee met, pursuant to call, at 1:00 p.m., in
Room 1300, Longworth House Office Building, Hon. Mike McIntyre
[Chairman of the Subcommittee] presiding.
Members Present: Representatives McIntyre, Bright, Minnick,
Peterson (ex officio), Conaway, Roe, Thompson, Cassidy and
Lucas (ex officio).
Staff Present: Aleta Botts, Claiborn Crain, Tyler Jameson,
John Konya, Rebekah Solem, Kristin Sosanie, Jamie Mitchell,
Patricia Barr, Mike Dunlap, and Nicole Scott
STATEMENT OF THE HON. MIKE McINTYRE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NORTH CAROLINA
Mr. McIntyre. This hearing of the Subcommittee on Rural
Development, Biotechnology, Specialty Crops, and Foreign
Agriculture to review innovative approaches to rural
development will now come to order. We want to start on time to
honor your time and also the unpredictable voting schedule that
we sometimes have.
Good afternoon. Welcome to today's hearing. I am
Congressman Mike McIntyre, Chairman of the Subcommittee from
North Carolina. Welcome, all of you who are with us today. I
want to thank all of you for coming here to examine this
important topic, and I especially thank our witnesses for the
travel that they have incurred to be able to join us today.
At the beginning of this year, in this very room, the day
after our new Congress was sworn in, I had the opportunity to
convene folks from all over this country to talk about the
impact of a potential stimulus package, as it was generically
called and now as it is known as the American Recovery and
Reinvestment Act. To our great alarm, rural areas were not
readily included in that stimulus package and as time went on
after that very important roundtable discussion, I was
especially concerned about water and wastewater projects and
other issues that affect rural America. We heard from the
National Association of Counties that day, from public water
groups and others. We sounded the alarm. Also my good friend
Jim Clyburn, the Majority Whip, raised similar issues among the
leadership. He is from the neighboring State of South Carolina,
just south of where I actually live, near the North Carolina/
South Carolina border. Indeed, before that package came out and
was submitted as potential legislation, it did include rural
areas.
We realized that folks that live in rural areas are just as
much taxpaying citizens as people that live in urban and
suburban areas, and that rural areas should not be
discriminated against when it comes to opportunities for
economic advancement and economic development. So we had a
historic discussion in this room going back to the very first
full day of the new Congress. Subsequent to that, I have had
several roundtable discussions in nine different counties back
home in southeastern North Carolina about that issue. When we
look at other concerns, such as rural broadband and community
facilities, we realize how important they are to helping rural
America not get the short end of the stick.
In fact, KThe New York Times contacted me before the
passage of the stimulus package, as it was known at the time,
and wondered out loud whether rural broadband would ever make
it, whether it could ever survive in the Senate, whether it was
worth it, whether there was the infrastructure to support it.
We had quite an interesting discussion and it made the front
page of The New York Times the next day. It was an amazing
story to be on the front page of The New York Times about rural
broadband.
Thankfully, the Senate did include it, as you know, and the
rest became history because, in the final package, we had rural
broadband. We are excited about the difference that that can
make in rural America. I still remember when President Clinton
came to the communities of Brunswick and Whiteville, North
Carolina, in April of 2000. And here we are 9 years later still
wanting to, as President Clinton once said, bridge the digital
divide. It is high time that that be done, and I am very
thankful that we had rural broadband in the American Recovery
and Reinvestment Act. Even with this infusion of funds rural
areas still face a tough struggle as they evaluate how to
strengthen their local economies, secure and retain employers
and provide sufficient services for their citizens to ensure
that rural communities grow and thrive.
Just last week a report was released from one of the
entities represented here today, the Rural Policy Research
Institute entitled, ``Rural America in Deep Downturn.'' As I am
sure we may hear from one of our witnesses, this report
indicates the rural economy and I quote, ``is now losing jobs
at a faster rate than the rest of the nation.'' Data from the
Bureau of Labor Statistics show that nonmetropolitan counties
lost 3.4 percent of their jobs in the 12 months ending in
January of 2009 while metro counties saw a 2.8 percent drop for
the same period. There are other stark numbers that show what
many of us have heard as we visit with rural constituents. They
tell us the heartbreaking stories of employers shutting down,
jobs leaving their local area and the difficult situation that
creates, most seriously, in areas without many alternatives for
employment--just as I discussed with a group of businessmen
back home in Lumberton, North Carolina, yesterday. We are
hearing today how rural communities can use this time of
challenges to work together to increase opportunities, find
ways to develop homegrown economic drivers that will put jobs
in these communities and keep them there. While we know rural
areas have challenges, let no one ever doubt the ingenuity and
hard work present in our rural areas and the potential for what
these qualities can bring to our nation.
I am pleased today to welcome several individuals from the
Tar Heel state to our witness panel. Mr. Will Lambe is the
Associate Director of the Community and Economic Development
program at my alma mater, The University of North Carolina at
Chapel Hilland, and we wish them well in the Final Four this
weekend and I am glad the President feels the same way about
that. Mr. Lambe's most recent publication, called ``Small
Towns, Big Ideas: Case Studies in Small-Town Economic
Development,'' was released in 2008. He has also authored
several studies prior to his work at Chapel Hill relevant to
our discussion today, including ``Back on Track, Promising
Practices to Help Dislocated Workers, Businesses, and
Communities,'' which he wrote for the North Carolina Rural
Economic Development Center; and also wrote the article,
``Business Retention and Expansion, Synergizing Service
Delivery in North Carolina.''
Based out of Chapel Hill as well, Dr. Deborah Markley is
Managing Director and Director of Research for the Rural Policy
Research Institute's Center For Rural Entrepreneurship, a
national research and policy center that is actually based in
Missouri. So, I also want to welcome her from Tar Heel land and
Chapel Hill and I also thank her institute for taking the time
to focus with us today on the concerns of rural America. Dr.
Markley's focus with the center is on the best models for
entrepreneurship development and rural places. Her research has
also included case studies of entrepreneurial support
organizations.
I want to welcome our other witnesses as well, and you will
be introduced as we get ready to have our panel introduction in
just a moment.
Let me encourage all witnesses to use the 5 minutes
provided for your statements to highlight the most important
points in your testimony. Do not read your testimony, unless
you can complete it within the allotted 5 minutes, or if you
can read the highlights within those 5 minutes.
Pursuant to our Committee rules, testimony by witnesses
along with questions and answers by Members of the witnesses,
will be stopped at 5 minutes. But don't worry, your complete
written statement will be submitted in its entirety in the
record.
At this time, I would like to call upon the Ranking Member,
Mr. Mike Conaway, for any comments that he might have here at
the opening.
STATEMENT OF THE HON. K. MICHAEL CONAWAY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Conaway. Well, thank you, Mr. Chairman.
I appreciate you calling this hearing. I also want to thank
our witnesses for taking the time to be with us today, for the
work that you are doing throughout rural America, and for your
willingness to share your insights with our Subcommittee today.
The 2008 Farm Bill reauthorized programs created to address
the needs of rural communities. These programs are geared
toward the creation of new and improved facilities and
infrastructure, broadband access and developing value-added
products through grants, loans and technical assistance. It has
also created new opportunities for small business owners,
farmers and ranchers to grow and expand their operations in a
changing economic landscape.
Rural development programs fall under the jurisdiction of
several different agencies, which often complicates economic
development assistance. I hope our panel will be able to
provide some insight on how the activities and funding of these
programs can best be coordinated among the relevant areas.
Increased funding has been provided over the past few months
that will assist USDA in working through applications for
community facilities, utilities, business development and
broadband programs. I am interested to hear how the
participating communities plan to utilize these Federal funds.
I would also like comments, if you would, we have a myriad
of individual programs of varying sizes, comments from the
witnesses as to what the impact would be to consolidate or
bring those under a more common umbrella of guidance. Would
that be valuable? Would we save taxpayer dollars that would
otherwise be spent? Is that money we could then put back into
the programs?
I am looking forward to hearing the testimony of our
witnesses and learning more about how they believe these
programs can best be implemented to assist rural America. The
ideas presented here will be useful as we monitor
implementation of the farm bill and the stimulus bill. I
appreciate your time and willingness to share your thoughts
with us today.
And I yield back.
Mr. McIntyre. Thank you very much.
I would like to now recognize the Chairman of the full
Committee on Agriculture, Chairman Peterson, for any remarks he
would like to make.
STATEMENT OF THE HON. COLLIN C. PETERSON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MINNESOTA
Mr. Peterson. Thank you, Mr. Chairman; and thank you,
Ranking Member, for your leadership.
I want to welcome the witnesses today to the hearing. We
have a distinguished panel of witnesses who are going to talk
about their approaches to rural development that have led to
successes in their areas.
In farm policy, I know we have recognized the emergence and
importance of being homegrown, a new market that is being
developed in that area, also producing domestic renewable
energy for America. I think we can apply that term to rural
development as well by assisting local leaders who take
initiative in their own communities and work together to grow
and keep jobs in rural America.
Therefore, I appreciate the Subcommittee's work on this
issue and look forward to hearing the witnesses' testimony.
Mr. McIntyre. Thank you, Mr. Chairman.
We are also pleased to be joined by the Ranking Member of
the full Committee on Agriculture, Mr. Lucas.
Any comments you would like to make, sir.
[The prepared statement of Mr. Peterson follows:]
Submitted Statement of Hon. Collin C. Peterson, a Representative in
Congress from Minnesota
Thank you, Chairman McIntyre and Ranking Member Conaway for your
attention to this issue.
Today the Subcommittee will look at innovative approaches to rural
development. Given the challenges that America's rural communities
face--be it the need for infrastructure, the struggle to provide
services for citizens, or the current state of the economy, this is an
important topic and I thank the Chairman for calling this hearing.
Today we will hear from a distinguished panel of witnesses about
what approaches to rural development have led to success in communities
around the country. These authors and researchers have seen first-hand
how entrepreneurship, cooperation, and education can shore up the
foundation of rural economies and cause dramatic improvements.
One thing we often talk about in farm policy is the emergence and
importance of being home-grown--whether it be in eating locally-grown
foods or producing a domestic renewable energy supply to fuel America.
We can apply that term to rural development as well, by assisting local
leaders who take initiative in their own communities and work together
to grow and keep jobs in rural America.
I appreciate the Subcommittee's work on this issue and look forward
to hearing the witnesses' testimony.
STATEMENT OF THE HON. FRANK D. LUCAS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OKLAHOMA
Mr. Lucas. Thank you, Mr. Chairman, for holding this
hearing today.
First, I would like to welcome Dr. Randy Smith from Altus,
Oklahoma. I am glad he is here today representing not only the
Third District of Oklahoma but also rural community colleges in
his role as President of the Rural Community College Alliance,
a national organization of rural colleges with over 150 members
in the U.S. Those insights will provide a great benefit to many
across the country.
I appreciate the timeliness of this hearing, as USDA works
to implement the 2008 Farm Bill, including several new rural
development programs. I look forward to hearing from
individuals, businesses, associations and community colleges as
to how they are working to bring new opportunities to small
communities across the country. Every town and city has before
them the task of developing economic opportunities in the face
of a global downturn.
For rural communities, this task is especially challenging,
even in prosperous times. But in the circumstances we are in
right now, with lower commodity prices combined with higher
input costs, rural areas have less with which to provide
critical services and to reinvest in their communities.
In addition, the shift in populations to urban areas means
fewer people to remain to operate the farms and services and to
start small businesses. These are the challenges rural America
faces, and it is why I take very seriously our charge to create
programs that will give rural communities the tools and
resources they need to expand economic opportunities.
Again, I want to thank Dr. Smith, as well as our other
panel witnesses for their time and insights today. And I am
pleased we have an opportunity to learn more about how we can
improve economic opportunities in small towns and rural
communities.
Thank you, Mr. Chairman.
Thank you, Mr. Ranking Member.
[The prepared statement of Mr. Scott follows:]
Submitted Statement of Hon. Frank Lucas, a Representative in Congress
from Oklahoma
Good afternoon, and welcome to today's hearing to review innovative
approaches to rural development. I want to thank all of you for being
here as we examine this important topic, and I want to especially thank
our witnesses who will be testifying before us today.
A couple of months ago in this very hearing room I held a
roundtable to discuss the needs of rural areas. At this roundtable,
several organizations working with rural communities pointed out the
significant infrastructure needs faced by these communities and how
rural areas were faring in the current difficult economic environment.
Fortunately, we were able to secure funds within the stimulus package
to address some of the needs for rural water systems, rural broadband,
and essential community facilities. Later this year, once USDA has had
an opportunity to implement these programs, we will be holding hearings
to evaluate the effects of that funding.
Even with this infusion of funds, however, rural areas still face a
tough struggle as they evaluate how to shore up their local economies,
secure and retain employers, and provide sufficient services for their
citizens to ensure that their rural communities grow and thrive. Just
last week, a report was released from one of the entities represented
here today, the Rural Policy Research Institute (RUPRI), entitled
``Rural America in Deep Downturn.'' The report indicates that ``The
rural economy is now losing jobs at a faster rate than the rest of the
nation.'' Data from the Bureau of Labor Statistics show that
nonmetropolitan counties lost 3.4 percent of their jobs in the 12
months ending January 2009 while metro countries saw a 2.8 percent drop
for the same period. This report shows in stark numbers what many of us
have been hearing as we visit with rural constituents who tell us
heart-breaking stories of employers shutting down, jobs leaving their
local area, and the difficult situation that creates most seriously in
areas without many alternatives for employment.
We are having this hearing today to hear how rural communities can
use this time of challenges to work together to increase opportunities
and find ways to develop homegrown economic drivers that will put jobs
in these communities and keep them there. While rural areas have
challenges, let no one ever doubt the ingenuity and hard work present
in our rural areas and the potential for what those qualities can bring
our nation.
I am pleased to welcome individuals from North Carolina to our
witness list today.
Mr. Will Lambe is the Associate Director of the Community and
Economic Development Program at the University of North Carolina at
Chapel Hill. His most recent publication, Small Towns, Big Ideas: Case
Studies in Small Town Economic Development, was released in 2008. He
has also authored several studies prior to his work at Chapel Hill
relevant to our discussion today, including ``Back on Track: Promising
Practices to Help Dislocated Workers, Businesses and Communities'' for
the North Carolina Rural Economic Development Center and ``Business
Retention and Expansion: Synergizing Service Delivery in North
Carolina.''
While based out of Chapel Hill as well, Dr. Deborah Markley is
Managing Director and Director of Research for the Rural Policy
Research Institute's Center for Rural Entrepreneurship, a national
research and policy center based in Missouri. Her focus within the
Center is evaluation of best models for entrepreneurship development in
rural places. Her research has also included case studies of
entrepreneurial support organizations.
Mr. McIntyre. Thank you so much, Mr. Lucas.
The Chair would request that other Members submit their
opening statements for the record so that witnesses would be
able to begin their testimony and we are sure there is ample
time for questions.
We have also, obviously, been called to votes.
Let me mention this, we have already described and welcomed
Mr. Lambe, Dr. Markley, and now Dr. Smith. Our other two
panelists are Mr. Jeff Yost, president and CEO of Nebraska
Community Foundation from Lincoln, Nebraska.
We welcome you today.
We also have with us Robert J. Thompson, Executive Director
of Androscoggin Valley Council of Governments and Vice Chairman
of the Rural Development Task Force of the National Association
of Development Organizations, known as NADO.
Thank you for the great work that you all do and continue
to do with councils of government and regional planning groups
throughout the nation.
Mr. Thompson is from Auburn, Maine.
In addition, we want to make sure that our witnesses are
prepared to proceed with testimony as soon as we return.
We have three votes, and when we come back, we will begin
with you, Mr. Lambe.
So, right now, the Committee will be in recess for the
duration of these votes, and then we will resume immediately
following.
[Recess.]
Mr. McIntyre. We will now come back into session and start
with our panel of witnesses.
Mr. Lambe.
STATEMENT OF WILLIAM LAMBE, ASSOCIATE DIRECTOR, COMMUNITY AND
ECONOMIC DEVELOPMENT PROGRAM, UNIVERSITY OF NORTH CAROLINA AT
CHAPEL HILL SCHOOL OF GOVERNMENT, CHAPEL HILL, NORTH CAROLINA
Mr. Lambe. Thank you, Mr. Chairman and Members of the
Subcommittee, for this opportunity to speak with you today
about innovation in rural development.
My name is Will Lambe, and I am from the University of
North Carolina at Chapel Hill, where I am the Associate
Director for Community and Economic Development at our school
of government. My job involves working with public officials in
North Carolina on issues related to community and economic
development. And I recently completed a book entitled, ``Small
Towns, Big Ideas.'' The book profiles 45 small towns from
across the country that are surviving and thriving in today's
economy. It includes detailed case studies of small communities
that are planning and implementing community and economic
development strategies with fewer than 10,000 people in their
jurisdictions.
My testimony today draws from that experience, visiting,
studying and writing about innovative small communities having
some success in economic development. Innovation, in my view,
in rural development is really a moving target because an
innovative or a new practice in one place may not be innovative
in another. There are, however, I think several general
characteristics of rural innovation that I discovered in my
experience studying small towns. These characteristics, which
address more the process than the substance of innovation,
might be considered what I call local ingredients for rural
innovation.
Rural innovation is more likely to occur when a community
has proactive and future-oriented leaders who will embrace
change and assume risk. Rural innovation is more likely to
occur when a community has a widely-shared vision for
development and a plan to achieve results. Rural innovation is
more likely to occur, in my view, when a community has a broad
understanding of its assets and opportunities.
Mr. Chairman, these are the general characteristics of
innovation, and there are others in my written testimony that
are under the control of local officials and civic leaders in
rural communities. And my experience studying small towns leads
me to conclude that a majority of the responsibility really for
initiating innovative practices in rural development lies
squarely in the hands of those local leaders. They know their
circumstances, and they are really the ones who are best
equipped to make those strategic decisions about development in
their communities. But in my view, the Federal institutions
have an equally important role in terms of encouraging,
incenting, or seeding innovation at the local level.
My colleague, Al Delia, from North Carolina, who was before
a Subcommittee of this Chamber 2 years ago said that, in those
parts of the rural South, where resources and opportunities
converge, we have seen economic success emerge. However, in too
many places, we continue to lack the resources to take full
advantage of the opportunities.
The stories in my book are about exactly those places. I
had the opportunity to tell the story of places where resources
and opportunities converge.
The flip side of that is this, Mr. Chairman, what about
those rural communities, like far too many in eastern North
Carolina, where persistent poverty handicaps rural innovation?
The untold story of my experience is that far too few success
stories of rural innovation come from the persistent poverty
communities stretching from southeastern Virginia through
eastern North Carolina, South Carolina, Georgia, and along into
Mississippi. The southeastern crescent region is quite
underrepresented in my sample of success stories.
I am not trying to imply that good things aren't happening
in pockets. There are absolutely success stories in this part
of the country. Scotland Neck, for example, in Halifax County,
eastern North Carolina, has had some success in terms of
attracting tourists through outdoor recreational activities and
a spruced up Main Street with outdoor guide services,
restaurants and retailers.
With Federal support for tourism planning and program
development in the southeast, more persistent poverty
communities might have the opportunity to innovate like
Scotland Neck. I appreciate the opportunity to speak with you
today. I have other examples of rural innovation in my written
testimony. And I would be glad to answer any questions from the
Subcommittee.
[The prepared statement of Mr. Lambe follows:]
Prepared Statement of William Lambe, Associate Director, Community and
Economic Development Program, University of North Carolina at Chapel
Hill School of Government, Chapel Hill, North Carolina
Mr. Chairman, thank you for the opportunity to address the
Subcommittee on Rural Development, Biotechnology, Specialty Crops, and
Foreign Agriculture. My name is William Lambe and I am the Associate
Director for the Community and Economic Development Program at the
School of Government, University of North Carolina at Chapel Hill.
My job involves working with public officials in North Carolina on
issues related to community and economic development. I also direct
several programs designed to focus our University's faculty, student
and staff resources on the challenges facing economically distressed
communities in North Carolina.
I recently completed a book, ``Small Towns, Big Ideas: Case Studies
in Small Town Community and Economic Development''. The book profiles
forty-five small towns from across the country that are surviving, and
in many cases thriving, in today's economy. It includes detailed case
studies about planning and implementing economic development strategies
in small towns with fewer than 10,000 residents. The project took me to
dozens of rural communities that are responding to the challenges
associated with globalization, geographic isolation, urban sprawl,
aging populations and natural disasters. The case studies cover a wide
variety of economic development strategies, including industrial
development, tourism, downtown development, entrepreneurship, and
arts--and cluster-based development. They also describe a range of
strategies for building local capacity for economic development:
organizational structures, partnerships, leadership development, and
more.
My testimony today, which will focus on innovation in rural
development, will draw from my experience visiting and writing about a
national sample of small towns implementing innovative or distinctive
development practices. I will describe briefly six characteristics of
innovation in rural development that I discovered in my work and I will
provide several examples to illustrate each characteristic. I will
conclude with some general comments about encouraging and incenting
innovation in rural development.
Local Ingredients for Rural Innovation
Innovation in rural development is a moving target. An innovative
(or new) practice in one place may not be innovative in another. For
example, the widespread use of local philanthropy to finance economic
development--a tool in the strategic portfolio of many communities
across Nebraska and other Midwestern states-would be considered quite
innovative in Eastern North Carolina. What makes a particular approach
to development innovative depends on the context in which the practice
is being implemented. There are, however, several general
characteristics of rural innovation that I discovered in my experience
studying small towns. These characteristics, which address more the
process than the substance of innovation, might be considered ``local
ingredients for rural innovation.''
Proactive and future-oriented leaders who will embrace change and
assume risk
Leaders in rural communities are the facilitators of, or the
barriers to, innovation. Without local leaders to push and implement
new ways of doing things, innovative practices, in whatever form they
take, will fall short. These characteristics of innovative leadership
in rural communities-proactive, future oriented and risk-taking--
perhaps relate to the fact that innovation often results when
communities ``hit the bottom,'' forcing local leaders to try new things
and take new risks.
For example, consider Helena, Ark., where the community's
collective sense of hitting bottom presented local leaders with an
opportunity to step up, to initiate a new way of planning and
implementing development efforts and to convince local residents to
participate in the process. Similarly, in Scotland Neck, N.C.,
difficult economic and civic circumstances in the late 1990s presented
an opportunity for a strong mayor and other civic leaders to look
inward for new ideas and angles on old problems.
Being proactive (as opposed to reactive) can be measured by a
community's willingness and ability to act on a particular challenge
before it becomes a problem. In Tennessee, for example, Etowah's
proactive approach to building and occupying its industrial park, as
opposed to reacting to trolling industries, has paid major dividends in
terms of maintaining a diverse array of living wage jobs in town. In
Ord, Neb., proactive meant preparing the community's residents and
institutions for unknown opportunities in the future. Ord's economic
development leaders tackled a number of small-scale challenges in the
community and, in the process, seeded the roots of teamwork around
development activities. In 2003, when a major economic development
project arrived from state developers, Ord was prepared to act.
Embracing change and assuming risk is another characteristic of
innovative leadership in rural communities. For example, Fairfield,
Iowa, has taken an approach to development in which the entire strategy
of building an entrepreneurial culture is based on the natural business
cycle of success and failure. According to a local leader, ``there was
a lot of trial and error and failures to get to where we are today, but
the failures of some companies have provided cheap space, office
furniture and equipment for another round of start-ups. Failure has
freed up talented people who again ask what new concepts and companies
can we start here in Fairfield.''
Widely shared local vision
Innovative rural communities establish and maintain a broadly held
vision, including goals for all manner of development activities with
measurable objectives. In rural development people (as opposed to money
or other resources) are the one absolutely necessary ingredient to
implementing and sustaining innovative practices. A committed group of
local residents who are willing to work hard to support the community's
vision can change the fate of an otherwise hopeless community. A widely
shared vision provides local innovators with a common understanding of
the road ahead.
This idea is perhaps illustrated most dramatically by Helena, Ark.,
where the inclusiveness of the community's planning and visioning
process was crucial. In this case, the process included representatives
from government, community organizations, for-profit and nonprofit
interests, resource providers and average citizens of the community. In
fact, anybody could join the effort, and this perception of an
inclusive and open-door process was widespread across Helena.
Similarly in Ord, Neb., a significant amount of the momentum for
economic development comes from one-on-one conversations. In Ord, local
leaders take the time to meet individually with members of the
community, sometimes going door to door, to ensure that opposition to
development efforts does not take root for lack of understanding the
larger vision that drives local development. In terms of maintaining
momentum behind a community's vision, Douglas, Ga., demonstrates how a
local Chamber of Commerce can take responsibility for calling
stakeholders together on a regular basis to recommit themselves to the
community's shared vision.
Broad definition of assets and opportunities
In most communities shell buildings, low tax rates, limited
regulation, and access to trained workers, highways, railroads, or
professional services are considered economic development assets and
justifiably so. Innovative rural communities, however, define economic
development assets in a much broader framework.
For example, Allendale, S.C., capitalized on a regional university
to create a local leadership development program that, in turn, trained
new economic development leaders for the entire region. Brevard, N.C.,
demonstrates that retirees within a community can be economic
development assets. The Retiree Resource Network is a group of retirees
with private sector experience who mentor local entrepreneurs. In
Columbia, N.C., local leaders recognized that their region's natural
beauty was an asset that could drive an ecotourism strategy. In an
ironic twist on small town development, the arrival of Wal-Mart became
an asset for the small community of Oakland, M.D., when local leaders
took the opportunity to help Main Street retailers diversify their
product lines. Assets for innovative rural development might include
individual people, nonprofit organizations, businesses, open space,
farms, parks, landfills (biomass), museums, schools, historic
architecture, local attitudes, or any number of other things.
Another trend in innovative rural development is the recognition of
rural assets in terms of environment-friendly development or clean
energy. In Dillsboro, N.C., the town turned an environmental challenge,
in this case methane gas migrating from the community landfill, into an
opportunity to create jobs and provide space for entrepreneurs. The
Jackson County Clean Energy Park (in Dillsboro) is using methane gas
from a nearby landfill to power the studios of local artisans. In Cape
Charles, Va., the town's investment in an eco-friendly industrial park
was an innovative strategy to bridge the dual challenges of
environmental degradation and job creation. And, in the most extreme
case, Reynolds, Ind., is capitalizing on latent energy contained
agricultural waste from 150,000 hogs to become BioTown, USA, the
nation's first energy-independent community.
Creative regional governance, partnerships, and organizations
Historically, development in rural communities has been practiced
as a zero--sum game. If one jurisdiction successfully attracted an
investment or new employer, the implication has been that the other
jurisdiction (perhaps a neighbor) lost. Innovative rural communities
move beyond this notion to a regional or collaborative approach. Cross-
jurisdictional partnerships can help rural communities to pool
resources toward shared development objectives.
Strategies in Ord, Neb., and in Davidson, Oxford, and Hillsborough,
N.C., each involve commitments to interlocal revenue--and
responsibility-sharing among varying jurisdictions. Davidson and Oxford
are partnering with neighboring communities in industrial development
efforts, while Hillsborough is partnering with the county to manage
growth beyond the town's municipal boundaries. Ord joined with the
county and the Chamber of Commerce to share costs and revenues from a
wide range of development activities.
In addition to regional partnerships and opportunities, innovative
rural communities tend to have local leaders who connect with higher-
level policy makers and business leaders. The mayor in Scotland Neck,
N.C., and several key leaders in Helena, Ark., made explicit efforts to
link the interests of their individual communities to policy makers in
their respective state capitals. Further, as demonstrated by Douglas,
Ga., leaders in small towns must forge partnerships with state-level
developers, bankers, and power companies, each a critical player in
state economic development. Innovative rural development is pursued
through dense networks of personal contacts.
Finally, public-private (including not-for-profit) partnerships are
emerging as the prominent organizational model for innovative rural
development. In Siler City, N.C., for example, the successful
establishment of an incubator was the product of a partnership among
the community college, local government, and a state-level nonprofit
organization. In Spruce Pine, N.C., the town's approach to supporting
local entrepreneurs requires that the Chamber of Commerce and the craft
community work closely together for the first time, to ensure
successful marketing and branding.
Measuring progress and evaluating success
Given the long-term nature of rural development, and the fact that
measurable results from a particular project may be decades in the
making, leaders in rural communities must repeatedly make the case for
the importance of their efforts. Making the case is important to
maintain momentum, invigorate volunteers and donors, to convince
skeptics and, most importantly, to keep the focus of development on the
vision or the goals established in a community's strategic plan.
Innovative rural communities recognize that making the case is an
ongoing and continuous effort.
For example, in Ord, Neb., impacts of the community's development
programs are monitored and have become useful for both external and
internal audiences. Data are used to attract additional investment from
outside sources. Moreover, by demonstrating a reasonable return on
investment, these data also may be used to convince a community's
naysayers to join the efforts. In Hollandale, Miss., an analysis of
local data helped the community to convince outside grant-makers that a
rural transportation network was a smart investment. In addition, it
helped to convince policy-makers that rural transportation was a viable
(if incremental) strategy for alleviating a range of economic
challenges.
Comprehensive approach to development
Successful rural development is always multi-faceted. There is no
universally applicable formula for determining the right way or the
most innovative way to do rural development. Innovation is context-
specific, and rural communities should take nothing off the table in
selecting strategies to pursue. Decisions about what to do and why to
do it must be based on local conditions, context, and capacity.
Successful communities tend to have evolved to the point where they
have a comprehensive approach that is aligned with the core assets,
challenges, and opportunities within their regional context.
Encouraging Innovation in Rural Development
My experience studying innovative rural communities leads me to
conclude that a majority of the responsibility for initiating
innovative practices in rural development lies squarely in the hands of
local leadership. Leaders in municipal, county, and multi-
jurisdictional institutions at the local level know their circumstances
and are best equipped to make strategic decisions about development.
However, given the ingredients for rural innovation described
above, state and federal institutions have an important role in terms
of encouraging or incenting innovation at the local level. For example,
state and federal grant programs could be designed to require multi-
jurisdictional partnerships as a criterion for funding. Research on
rural innovation and program evaluation, including best practice case
studies, could be ramped up and consolidated in a federal data
clearinghouse. Additional resources could be made available to colleges
and universities for rural leadership development. These are a few
examples of the types of policies or programs that could encourage
rural innovation.
Determining the specific design and structure of policy incentives,
as well as the responsibility for testing new ideas and evaluating
their impact is an important role for research institutions in North
Carolina and elsewhere; and it is one that we take very seriously at
UNC. In December, I joined researchers from North Carolina, South
Carolina and from RTI International, as well as local, state and
federal leaders in Chapel Hill to discuss the growing interest in the
Southeast Crescent, the coastal plain of the South, and how the
research community can support the proposed Southeastern Crescent
Regional Commission. A research agenda to support the commission is
being developed.
In addition, the UNC System President and the Chancellor at UNC-
Chapel Hill have made firm commitments to testing new ways of focusing
university resources on the challenges facing our state's most
economically distressed communities. Next month, UNC-Chapel Hill will
roll out our Community-Campus Partnership for Tomorrow (CCPT)
initiative to form long-term partnerships with rural communities in our
state in which faculty, staff, and students from Carolina will work
closely with local community leaders to help with their most pressing
challenges and opportunities.
We at the University of North Carolina are committed to
discovering, testing and evaluating innovative development practices in
rural communities--and doing so in close partnership with local
leaders.
Thank you again for the opportunity to testify. I would be glad to
answer questions.
Mr. McIntyre. Thank you very much, Mr. Lambe. And we look
forward to that.
Dr. Markley.
STATEMENT OF DEBORAH M. MARKLEY, MANAGING
DIRECTOR AND DIRECTOR OF RESEARCH, RUPRI, CENTER FOR RURAL
ENTREPRENEURSHIP
Mr. Markley. Chairman McIntyre, Ranking Member Conaway and
Members of the Subcommittee, it is an honor to appear before
you today.
I am Deborah Markley. I am Managing Director of the RUPRI
Center for Rural Entrepreneurship. Our work over the past 7
years has taken us to communities and regions across rural
America where we have witnessed a wave of innovation in rural
development that is by its very nature entrepreneurial. I
provide more detailed information on the work of the center and
what we have learned about entrepreneurship development in my
written testimony.
I want to use my time here now to highlight a few of the
lessons we have learned from our work and some of the policy
recommendations that we really see as imperative. We believe
that entrepreneurship development is the most promising
strategy for rural places, and there is evidence that
entrepreneurship is working, helping entrepreneurs start and
grow their businesses and create jobs and wealth.
There are four key lessons that we see for successful
entrepreneurship development. The first, which echoes some of
Will's comments, is the necessity for entrepreneurial
leadership. Successful entrepreneurship development is rooted
in leaders who recognize opportunities and can identify the
resources needed to create a supportive environment for
entrepreneurs. Those leaders come from many different
organizations, universities, community colleges, nonprofit
organizations, private companies. But what they have in common
is a strong commitment to place and to building an
entrepreneurial environment that in turn creates a sustainable,
economically viable region with high quality of life.
Lesson number two is the importance of regional and
organizational collaboration. Innovative practices are
intentionally regional in nature like the outstanding work that
is happening in northeastern Minnesota. They also reach out to
organizations that serve diverse populations, like the work of
Oweesta in working with Native Americans. The power of their
collaboration rests in bringing together a much broader and
more diverse set of resources than any single community or
organization could provide.
The third lesson is the value of a systems approach. The
truly pioneering feature of the innovative entrepreneurship
development work that is going on is people recognizing that
this work is about more than just focusing services on
entrepreneurs. It is also about engaging communities in
building an entrepreneurial environment and creating a systems
approach that brings the various service providers together in
a coordinated and seamless way. We refer to that as connecting
the dots.
The final lesson is the importance of recognizing and
building on assets, again, a similar theme to one that Will
mentioned. Whether we are talking about the regional
entrepreneurship development efforts in eastern North Carolina
or the heritage-based efforts in the Arkansas Delta,
entrepreneurship development begins with an assessment of those
assets both unique and commonplace and builds on those assets
to create a systems approach.
The innovation we found working across rural America is
worthy of support by the Federal Government. And I would like
to offer a few policy recommendations. While not the purview of
this Subcommittee, I would be remiss if I did not suggest three
issues that impact entrepreneurs across rural America. Lack of
access to affordable health care; inadequate infrastructure,
particularly broadband; and the lack of capacity on the part of
small communities to effectively engage in development efforts.
Attention to these issues really gets at the heart of
policy change that can impact the ability of entrepreneurs to
grow their businesses and in turn create the economic
opportunities and wealth that can drive rural development.
But there are four recommendations that are closer to the
heart of this Subcommittee's work. One, as Federal resources
flow to the newly created regional authorities and commissions,
entrepreneurship should be a part of their strategic plans. The
lessons from the Appalachian Regional Commission's
entrepreneurship and other innovative entrepreneurial
development demonstrate the value of this approach and also can
be a guide to the process.
Two, the lessons from entrepreneurship development should
be emphasized in the design of entrepreneurship initiatives
that seek funding from USDA's Rural Development Programs as
well as other Federal agencies. Funding to support
collaborative processes, one of the lessons that we have
learned through the vehicle of the Rural Collaborative
Investment Program would help to ensure that these lessons are
built into future entrepreneurship development initiatives.
Three, USDA Rural Development Programs should put greater
emphasis on the design and implementation of stronger
measurement systems at the beginning of the funding process so
that grantees gather appropriate measures to be able to assess
and report on their performance.
And finally, continued support for programs that really
build the support infrastructure for rural entrepreneurs,
programs like the Rural Microenterprise Assistance Program and
the Rural Business Enterprise Grant Program among them, are
critical. These programs provide the seed capital for
entrepreneurs as well as their communities.
In closing, the center remains committed to learning from
key rural innovators and sharing this learning with leaders
across rural America. We are happy to serve as a resource to
the Subcommittee and to connect you with this growing body of
innovation and research.
I welcome your questions and comments.
I thank you again, Mr. Chairman and Members of the
Subcommittee for the opportunity to testify before you today.
Your continued leadership in bringing the lessons from those
who are at the forefront of rural development innovation to the
rural policymaking process is really critical. Thank you.
[The prepared statement of Ms. Markley follows:]
Prepared Statement of Dr. Deborah M. Markley, Managing Director and
Director of Research, RUPRI Center for Rural Entrepreneurship
Chairman McIntyre, Ranking Member Conaway, and members of the
Subcommittee, it is an honor to appear before you today. I applaud your
leadership in shining light on innovative approaches to rural
development that are providing communities and regions across rural
America with new economic opportunities and hope for a better future.
Background
I am Deborah Markley, Managing Director and Director of Research
for the RUPRI Center for Rural Entrepreneurship in Chapel Hill, NC. In
2001, the RUPRI Center for Rural Entrepreneurship was established with
founding support from the Kauffman Foundation and the Rural Policy
Research Institute (RUPRI). The Center strives to be the source of
information and learning about the practice of entrepreneurship in
rural America. Our work includes practice-driven evaluation of
innovations in entrepreneurship development, the development and
sharing of tools and training to help leaders build more effective
development strategies, and on-the-ground engagement in communities and
regions that are ready and committed to moving forward with
entrepreneurship development.
The Center's work over the past seven years has taken us to
communities and regions in all parts of rural America. We have had the
opportunity to witness first hand the economic challenges that rural
leaders face every day--failure of past strategies and the loss of
economic mainstays, like the textile mills and tobacco farms in my home
state of North Carolina; resource and infrastructure constraints; an
erosion of leadership; and isolation from markets and necessary
services.
At the same time, we are witnessing a wave of innovation in rural
development that is by its very nature entrepreneurial. Rural America
is recognizing new opportunities associated with the development of
alternative energy, new generation agriculture, and asset-based
entrepreneurship. Rural community and regional leaders are embracing a
new approach to economic development. Creating a supportive environment
for entrepreneurs is viewed as the foundation that must be in place for
more traditional economic development activities like industrial
recruitment and retention and expansion of existing industry to occur.
Communities and regions across the country are figuring out ways to
provide more support for existing entrepreneurs and to encourage the
business creation dreams of community residents, young and old. These
strategies are generating positive results, rebuilding economies and
hope in communities that have lost factories, people and even community
institutions like schools.
Our experience has informed three core beliefs that guide our
vision for the future of rural America:
Entrepreneurship development is a necessary component of
rural economic development--it may be the most promising strategy for
rural places.
Creating an entrepreneurial environment requires culture
change--replacing ``waiting to be saved'' with ``growing our own''
mentality in rural communities across the country.
Entrepreneurship development requires a systems
approach--a collaborative, regional approach of ``connecting the dots''
among resource providers, within the public, private and non-profit
sectors, between communities and schools, and from practitioners to
policy makers.
These core beliefs have been upheld by a growing body of both
research and innovative entrepreneurship development practice. In 1997,
the Appalachian Regional Commission (ARC) began an innovative multi-
year initiative to invest in projects designed to build entrepreneurial
economies across the region--the Entrepreneurship Initiative. Through
2005, ARC had invested almost $43 million in various entrepreneurship
development projects that created jobs and businesses, supported
partnerships and collaborations, and helped leaders at the community
and state levels recognize the value of entrepreneurship as an economic
development strategy. The Center, along with several partners,
completed an evaluation of this significant federal investment in
entrepreneurship development in 2007--Creating an Entrepreneurial
Region: Findings and Lessons from an Evaluation of the Appalachian
Regional Commission's Entrepreneurship Initiative 1997-2005.
In 2003, CFED (Corporation for Enterprise Development), with
funding from the W.K. Kellogg Foundation, completed Mapping Rural
Entrepreneurship, a study of the current practice and context for
entrepreneurship in rural America. This groundbreaking study served as
the foundation for a significant effort on the part of the Kellogg
Foundation to support innovation in entrepreneurship development -- the
Rural Entrepreneurship Development Systems initiative launched in 2004.
With investments in six demonstration collaboratives across rural
America, the Foundation supported efforts to build systems of support
for entrepreneurs -- through a focus on entrepreneurship education,
technical assistance, and financial capital -- and to create a culture
of entrepreneurship and supportive policy that would sustain these
efforts into the future. The key learning from this effort has been
recently published by The Aspen Institute's FIELD program--Revitalizing
Rural Economies through Entrepreneurship Development Systems.
At the same time, the Center completed a series of case studies of
innovative entrepreneurship practice in the northwest region, with
funding from the Northwest Area Foundation--Innovative Approaches to
Entrepreneurial Development in the Northwest Region.
Lessons from Innovative Entrepreneurship Development Strategies
I provide this background information to suggest to members of the
Subcommittee that there is a wealth of innovative entrepreneurship
development practice across rural America and a concerted effort on the
part of the Center and many partner organizations to capture what is
working well and what has been achieved in rural communities and
regions as a result of this innovative work. At the same time, these
formal investigations do not begin to capture the entrepreneurial
energy being applied to rural development strategies in all corners of
rural America.
The body of work referenced above shows that entrepreneurship
development is working. Our work in the Appalachian region found that
ARC's Entrepreneurship Initiative had an impact by creating more
entrepreneurs in the pipeline, better informed and better skilled
entrepreneurs, and stronger, more job-creating businesses (ARC study,
p. 1). The collaboratives involved in the Kellogg funded initiative
have created systems that use entrepreneurial coaching and networking,
for example, to build the skills of entrepreneurs who are, in turn,
creating new businesses and jobs (FIELD study, p. 19). Both of these
efforts also resulted in a wide range of qualitative impacts, such as
elevating the importance of entrepreneurship and engaging more youth in
the process. While we can point to these impacts, organizations
committed to understanding entrepreneurship development, and the
organizations and funders supporting the implementation of these
innovative approaches, must do a better job of measuring the outcomes
of these efforts and communicating the value of entrepreneurship
development to a broader audience of economic development
practitioners, local and state elected officials, and policy makers at
all levels of government.
What we have taken from this collective work and experience is a
set of themes or lessons that can inform future efforts of rural
development practitioners to design and implement entrepreneurship
strategies on the ground and of policymakers at the local, state and
federal levels who are designing policies in support of
entrepreneurship as a core rural economic development strategy.
Lesson #1 -- Necessity of Entrepreneurial Leadership
Successful entrepreneurship development practice is rooted in
entrepreneurial leadership--leaders who recognize opportunities to take
a different economic development approach and identify the resources
needed to create an environment that is supportive of entrepreneurial
development. These leaders come from different organizations--private
companies, educational institutions, nonprofit service providers--but
they all have entrepreneurial and leadership skills that are used in
the service of economic development. They are as diverse as an
entrepreneur in Fairfield Iowa, the president of a non-profit
enterprise development organization in northeastern Minnesota, the
mayor of Hertford North Carolina, and the leader of a collaborative in
New Mexico. These civic entrepreneurs also have a strong commitment to
place and to building an entrepreneurial environment that, in turn,
creates a sustainable, economically viable region with a high quality
of life.
Lesson #2 -- Importance of Regional and Organizational Collaboration
Individual leadership is not sufficient to create successful
practice. Examples of innovative practices demonstrate the importance
of collaboration across diverse organizations and communities. The
collaborative partners engaged in entrepreneurship development include
service providers, higher education institutions, local units of
government, traditional economic development organizations, social
service organizations, individual entrepreneurs, foundations, K-12
educational institutions, state agencies and others. Successful
entrepreneurship development activities are focused on more than an
individual community. They are intentionally regional efforts and also
reach out to diverse communities such as Native Americans, limited
resource entrepreneurs, immigrant populations and more remote rural
communities. The power of their collaboration rests in bringing
together a broader and more diverse set of resources than any one
organization or community could provide, and in creating a dynamic
assistance network for service providers and entrepreneurs.
Lesson #3 -- Value of a Systems Approach
Many organizations across rural America are engaged in some way in
supporting entrepreneurs. The truly pioneering feature of the most
innovative efforts is the recognition that entrepreneurship development
requires more than focusing services on entrepreneurs. Engaging
communities in building an entrepreneurial environment--one with a
supportive cultural and policy milieu--and creating a systems approach
that organizes services in a more effective and seamless way are both
essential.
Lesson #4 -- Recognizing and Building on Assets
A community's or region's assets come in many different forms.
Innovative approaches to entrepreneurship development are built on
identification and recognition of local assets, and the development of
the system components that best complement those assets. In North
Carolina, the strong capacity and convening power of the North Carolina
Rural Center is serving as a catalyst for entrepreneurship development
in regions across the state. In Northeast Minnesota, the well-networked
and collaborative economic development organizations provide the
foundation on which a system is being built. In northern Iowa, the
existing infrastructure created by philanthropist Pappajohn is the
springboard for additional efforts to transform the regional economy.
In the Arkansas Delta, the preservation of iconic assets and the
identification of entrepreneurial opportunities is being encouraged and
supported by a regional collaborative with support from the National
Trust for Historic Preservation. In all cases, entrepreneurship
development is proceeding from an assessment of assets, both unique and
more commonplace, and from calculated efforts to build on those assets
to create an entrepreneurship development system.
Two Sets of Recommendations
The work of the Center and a wide range of partner organizations
suggests several areas where Federal policy can be broadly supportive
of entrepreneurship development. These recommendations get at the heart
of policy change that can impact the ability of entrepreneurs to create
and grow businesses and, in turn, create the economic opportunities and
wealth that can drive the development of rural communities.
Recommendations for Building a Foundation for Entrepreneurship
Entrepreneurs across rural America continue to be
constrained by inadequate infrastructure, particularly access to
Broadband. While in theory many entrepreneurs can locate or build their
businesses anywhere, that location decision is often predicated on high
speed Internet access that remains elusive in many parts of rural
America. Federal investment in rural Broadband remains a priority for
rural entrepreneurship development.
Rural entrepreneurs--often small, perhaps self-employed--
are constrained in starting or growing their businesses because of the
lack of access to affordable health care. Making progress on health
care reform could serve as a stimulus to entrepreneurial development
across rural America.
Finding leaders and building capacity to engage in
entrepreneurship development remains a constraint for many small rural
communities and even regions. Providing the means to build this
capacity and to encourage multi-community collaboration across rural
regions is one way that Federal support could help more rural
communities learn from and embrace the lessons learned from the
innovative entrepreneurship development practices underway across the
country.
In addition to these broad recommendations, there are a number of
specific recommendations that directly relate to the programs of
interest to this Subcommittee. These recommendations are designed to
bring the lessons of innovative entrepreneurship development reflected
in this testimony to bear on rural development policy going forward.
Recommendations Specific to Rural Development Programs
Following the successful lead of the Appalachian Regional
Commission, entrepreneurship development should be a priority for the
newly established regional authorities and commissions. The ten year
history of investment demonstrated by ARC provides important evidence
of the impact on the region, in terms of job and business creation,
attracting private sector investment, and beginning to create a more
supportive culture of entrepreneurship in the region. As new Federal
resources flow to these regional organizations, the lessons from ARC
and other innovative entrepreneurship development initiatives should be
used to guide the development of strategic plans around
entrepreneurship development.
The set of common lessons from entrepreneurship
development should be incorporated into the guidelines for USDA Rural
Development programs, and those of other agencies. These lessons from
effective practice, such as the importance of cross-organizational and
cross-regional collaborations, should be emphasized in the design of
entrepreneurship initiatives that seek Federal Rural Development
funding, and effective partnerships should be rewarded as part of the
funding process. In addition, providing funding to support the
development of these collaborative processes, through the vehicle of
the Rural Collaborative Investment Program, would help to ensure that
these lessons are built into the design of future entrepreneurship
initiatives.
Performance measurement should be viewed as an integral
part of program development from the perspective of Federal funding
agencies like USDA's Rural Development. One of the first steps in any
entrepreneurship development initiative needs to be an articulation of
program goals--what are you trying to achieve--followed by
identification of how success or performance will be measured. Rural
Development programs should put greater emphasis on the design and
implementation of strong measurement systems from the start so that
grantees gather appropriate measures to report on the performance of
their initiatives. These efforts could then be linked, for example,
with the pioneering work being done at the University of Missouri to
assess the socio-economic benefits of Federal investments in rural
development.
Continued support for programs that are used to help
build the support infrastructure for rural entrepreneurs, such as the
Rural Microenterprise Assistance Program and the Rural Business
Enterprise Grant program among others, is also critical. These programs
provide the seed capital both for rural entrepreneurs who are starting
or growing their businesses and for rural communities that have
developed and are implementing innovative approaches to entrepreneurial
development.
Closing
The Center remains passionately committed to learning from the key
innovators in the field of entrepreneurship development and sharing
this learning with rural leaders across the country who are searching
for new, more effective approaches to economic development. We are also
committed to building strong partnerships with other regional and
national organizations with a focus on entrepreneurship and rural
development so that we can bring stronger and broader capacity to our
work. We are happy to serve as a resource to members of this
Subcommittee and to connect you with this growing body of innovative
practice and research. I welcome your questions and comments. I thank
you, again, Mr. Chairman and members of the Subcommittee, for the
opportunity to testify before you today. Your continuing leadership in
bringing the lessons from those who are at the forefront of rural
development innovation to the rural policy making process is critical,
and we look forward to working with you in the future.
Mr. McIntyre. Thank you, Dr. Markley.
Mr. Yost.
STATEMENT OF JEFF YOST, PRESIDENT AND CEO, NEBRASKA COMMUNITY
FOUNDATION
Mr. Yost. Mr. Chairman, Members of the Subcommittee, my
name is Jeff Yost. I am President and CEO of the Nebraska
Community Foundation. In addition to my testimony, I am
supplying the Committee Members with two reports which should
be in your packet of materials.
The Nebraska Community Foundation is a community
development institution that uses philanthropy as a tool. We
are not a charity. We are a decentralized system of 200
affiliated funds located in 71 of Nebraska's 93 counties. I get
many requests from people across the nation who want to learn
about the innovative nature of our work. Actually, what we are
doing is overlaying a framework, one that has been used in
countless urban neighborhoods and our rural environment. It is
a bottoms-up approach that builds on community strengths by
identifying local assets rather than focussing on deficiencies.
In struggling rural communities, local assets can be hard
to find. For decades, consolidation has destroyed the diversity
of our rural economy. Out-migration of middle-class youth has
crippled communities and shrunk the local tax base. The result
is fewer career opportunities and severe underemployment.
Despite these trends, NCF has identified an enormous asset
in our rural communities that our rural communities can build
on. In land-rich, cash-poor Nebraska, that asset is the
transfer of wealth. In 2002, we completed a county-by-county
analysis of how much wealth will transfer from one generation
to the next during the first half of this century. We estimate
that $94 billion will transfer in rural Nebraska alone. That is
about $125,000 per person.
More important is the timing. Because of our aging
population, most rural counties are experiencing their peak
years of transfer now or in the next three decades. If out-
migration continues, most of that wealth will pass to heirs who
no longer live where the wealth was built.
Our goal is ambitious. We ask our affiliated fund leaders
to build permanent unrestricted endowment funds equal to 5
percent of the projected 10&ar transfer of wealth in their
community. We coach these community leaders to send out a clear
message to their family and friends, ``When you plan for the
future, consider your hometown as another child.''
Now, in rural Nebraska, you don't talk about how many acres
somebody owns or how many cattle they have. So the thought of
speaking directly to a potential benefactor about leaving a
legacy gift is beyond imagination for most of our new
affiliated fund leaders. But they are learning.
Today 88 community-based affiliated funds have raised $38
million in endowed assets and planed gifts, most of this in the
past 5 years. Over 2,000 residents are leading these affiliated
funds. Last year, NCF and its affiliated funds received over
8,000 individual gifts; 49 of these funds already have $100,000
in endowed assets and planned gifts.
Capitalizing community endowments, however, is just a tool
for achieving our ultimate goal, which is building communities
where young people will choose to live, work, and raise their
families. Building endowments creates local funding streams to
leverage the kind of community investments required to attract
young families back to their rural roots. This is a leap of
faith for people who are used to giving their kids luggage for
graduation.
Today young people can choose to live and work wherever
they want. What surprises many adults is that, in surveys we
have conducted with over 5,000 rural youth, more than half of
the young people say they would prefer to return home to raise
their families if career opportunities were available. More
than 40 percent say they would be interested in taking an
entrepreneurship class or owning their own business some day.
Only 12 percent say their community is too small.
We are combining this youth optimism and the transfer-of-
wealth opportunity to catalyze a development framework called
Hometown Competitiveness or HTC. HTC is an intensive community
intervention based on four strategies we call pillars: Building
local leadership; energizing entrepreneurship; engaging young
people; and capitalizing community endowments to support these
capacity-building efforts.
Every community no matter how small has some potential for
these four core capacities. Because it is locally driven, HTC
evolves differently in each of the 16 multi-community sites
located in Nebraska and in the other 14 states where HTC is
underway. But similar impacts are occurring: more business
expansions and transitions; more jobs created or retained;
increasing diversity in new leadership; and more young people
returning home.
The Nebraska Community Foundation and HTC are steeped in
the principle that communities can only be built from the
inside out. No outside expert, no one industry, no government
program, for that matter, can sustain a community. It takes
local leadership and locally controlled assets to develop and
move communities to prosperity. The role of all external
forces, including the Federal Government, is to provide
technical assistance and flexible funding streams to empower
local leaders to take advantage of these unprecedented
opportunities.
Thank you. I would be happy to take questions.
[The prepared statement of Mr. Yost follows:]
Prepared Statement of Jeff Yost, President and CEO, Nebraska Community
Foundation
Re: Innovative approaches to rural development
Chairman McIntyre and Members of the Subcommittee, my name is Jeff
Yost. I am President and CEO of the Nebraska Community Foundation. In
addition to this testimony, I am supplying the Subcommittee with these
two reports for the hearing record.
The Nebraska Community Foundation is a community development
institution that uses philanthropy as a tool; we are not a charity. We
are a decentralized system of 200 affiliated funds located in 71 of
Nebraska's 93 counties.
I get many requests from people across the nation who want to learn
about the innovative nature of our work. Actually, what we are doing is
overlaying a framework--one that has been used in countless urban
neighborhoods--in our rural environment. It's a bottoms-up approach
that builds on community strengths by identifying local assets rather
than focusing on deficiencies.
In struggling rural communities, local assets can be hard to find.
For decades, consolidation has destroyed the diversity of our rural
economy. Out-migration of middle-class youth has crippled communities
and shrunk the local tax base. The result is fewer career opportunities
and severe underemployment.
Despite these trends, NCF has identified an enormous asset that our
rural communities can build on. In land-rich, cash-poor Nebraska, that
asset is the transfer of wealth. In 2002 we completed a county by
county analysis of how much wealth will transfer from one generation to
the next during the first half of this century.
We estimate that $94 billion will transfer in rural Nebraska alone;
about $125,000 per person. More important is the timing: Because of our
aging population, most rural counties are experiencing their peak years
of transfer now or in the next three decades. If out-migration
continues, most of that wealth will pass to heirs who no longer live
where the wealth was built.
Our goal is ambitious. We ask our affiliated fund leaders to build
permanent unrestricted community endowments equal to five percent of
the projected 10&ar transfer of wealth for their community. We coach
these community leaders to send out a clear message to their family and
friends. ``When you plan for the future, consider your hometown as
another child!''
Now in rural Nebraska, you don't talk about how many acres somebody
owns or how many cattle they have. So the thought of speaking directly
to a potential benefactor about leaving a legacy gift is beyond
imagination for most of our new affiliated fund leaders.
But they are learning.
Today 88 community-based funds have raised $38 million in endowed
assets and planned gifts, most of it in the past five years. Over 2,000
local residents are leading these affiliated funds. Last year NCF and
its affiliated funds received over 8,000 gifts. Forty-nine of these
funds already have over $100,000 in endowed assets and planned gifts.
Capitalizing community endowments, however, is just a tool for
achieving our ultimate goal, which is building communities where young
people will choose to live, work and raise their families. Building
endowments creates local funding streams to leverage the kind of
community investments required to attract young families back to their
rural roots.
This is a leap of faith for people who are used to giving their
kids luggage for graduation.
Today, young people can choose to live and work wherever they want.
What surprises many adults is that in surveys we've conducted with over
5,000 rural youth, more than half of the young people say they would
prefer to return home to raise their families if career opportunities
were available. More than 40 percent say they're interested in taking
an entrepreneurship class and owning their own business someday. Only
12 percent say that their community is ``too small.''
We're combining this youth optimism and the transfer of wealth
opportunity to catalyze a development framework called Hometown
Competitiveness, or HTC. HTC is an intensive community intervention
based on four strategies we call ``pillars.'' They are:
Building Local Leadership,
Energizing Entrepreneurship,
Engaging Young People, and
Capitalizing Community Endowments to support these
capacity-building efforts.
Every community, no matter how small, has some level of potential
in these four core capacities.
Because it is locally driven, HTC evolves differently in each of
the 16 multi-community sites located in Nebraska, and in the 14 other
states where HTC is underway. But similar impacts are occurring. More
business expansions and transitions; more jobs created or retained;
increasing diversity in new leadership; and more young people returning
home.
The Nebraska Community Foundation and HTC are steeped in the
principle that communities can only be built from the inside out. No
outside expert, no one industry--no government program, for that
matter, can sustain a community. It takes local leadership and locally-
controlled assets to develop and move communities to prosperity.
The role of all external forces, including the federal government,
is to provide technical assistance and flexible funding streams to
empower local leaders to take advantage of these unprecedented
opportunities.
Thank you. I would be happy to answer any questions you may have.
Mr. McIntyre. Thank you Mr. Yost.
Mr. Thompson.
STATEMENT OF ROBERT J. THOMPSON, EXECUTIVE
DIRECTOR OF THE ANDROSCOGGIN VALLEY COUNCIL OF GOVERNMENTS, AND
VICE CHAIR, RURAL DEVELOPMENT TASK FORCE OF THE NATIONAL
ASSOCIATION OF DEVELOPMENT ORGANIZATIONS, NADO
Mr. Thompson. Good afternoon, Chairman McIntyre, Ranking
Member Conaway and Members of the Subcommittee.
My name is Bob Thompson. I serve as the Executive Director
for the Androscoggin Valley Council of Governments, the
regional planning and development district in the western parts
of the State of Maine. I also serve as a Board Member on the
National Association of Development Organizations. Thank you
for the opportunity to testify today on U.S. rural development
programs and the assistance that they provide to rural
entrepreneurs and businesses.
But before I begin, let me first thank the Subcommittee for
your leadership and your support of the Rural Development
Programs as part of the 2008 Farm Bill.
And Chairman McIntyre, the members of NADO are also
appreciative of your persistence and vision on the issue of the
Federal-state-regional commissions, such as the Northern Border
Commission, the Southeast Regional Commission and Southwest
Border Regional Commission.
First, USDA Rural Development is an essential partner and
funding source for rural regions and communities as they work
to develop the fundamental building blocks for community and
economic competitiveness. With USDA's assistance, rural
communities across the nation are now in a better position to
pursue innovative development strategies that are resulting in
new jobs and wealth-generating opportunities.
Fifty years ago, one out of every two jobs in Maine was
concentrated in the manufacturing sector. By comparison, that
figure is now 1 in 10. In the past year, the western Maine
region has seen its unemployment rate double from 5 to 10
percent. This mass exodus of the state's manufacturing sector
has left behind large and small industrial complexes and a very
aging infrastructure. The flexible nature of the USDA Rural
Development Programs has been vital to our ability to respond
to the evolving nature of our region's economy.
Second, the USDA's Rural Development Business Enterprise
Grant Program, RBEG, and the Intermediary Relending Program,
IRP, are highly effective resources that allow intermediaries
such as ours to assist rural entrepreneurs, business leaders
and local officials as they pursue innovative development
strategies and business opportunities. Early in the 1990s, my
board recognized that our dependence on major employers in
rural communities was a risk factor that we could no longer
tolerate. As a result, an aggressive effort was initiated to
establish lending and technical assistance resources,
particularly for small--and medium-sized businesses.
In 1995, we secured a USDA Rural Business Enterprise Grant
of $500,000. As one of the smaller USDA initiatives, the RBEG
program is often overlooked. However, we found it to be broad,
flexible in nature, and it makes the program an indispensable
tool. To date we have lent over $900,000 from that program, and
we have leveraged an additional $14.8 million in owner equity
and private funds, and we have helped to create or retain 350
jobs in our rural area.
USDA's Rural Intermediary Relending Program is another
valuable tool. We have been awarded three IRP loans totaling
$3.5 million. In total, we have lent now $8.4 million from that
pool and have leveraged $43.7 million in additional capital
investment from private and other equity sources.
As we gained success with these programs and our lending,
it became evident that we could have additional community
impact in our rural communities, and we decided to put a
portion of our IRP pool into a Community Reinvestment Program.
We decided to make the funds available at reduced interest
rates and flexible terms to encourage private-sector
investment.
We have made three such incentive deals to date, including
the Bass Wilson Mill, which is an example. In 1998, G.H. Bass
announced its intention to halt shoe production in Maine. The
Wilson mill was vacated. Bass offered the building to the town.
Local leaders turned to AVCOG and our business lending programs
for assistance. We worked with the community, assisted in
soliciting a proposal to rehabilitate the property, and
ultimately the property was transferred to a private developer,
and we lent $250,000 from our IRP community program. This is
just one example of the innovative nature of the USDA Rural
Development Business Programs.
Before tapping into our technical assistance capacity along
with the successful USDA loan portfolio, the Town of Wilton
lacked the staff and the financial resources to accomplish this
deal. Today the property is fully renovated, has five
businesses, and 100 employees.
Finally, Mr. Chairman, I would like to discuss the
innovative asset-based rural development strategy that the
economic development districts in Maine are working on. This is
a collaborative model that we feel will fit the goals of the
Regional Collaborative Investment Program, and it calls for a
new public-private partnership, a new statewide effort that
will be called Mobilize Maine.
The initiative changes the model for rural economic
development in Maine by addressing our disconnected and
fragmented system. It focuses our work on producing results and
improving the personal income of Maine workers.
In closing, I urge your continued support of USDA Rural
Development Programs. Rural development is an essential partner
and funding source for our rural regions, a vital tool for
organizations such as AVCOG, and we strive to provide
assistance and build capacity in communities. Thank you again
for the time and the opportunity. And I will welcome any
questions.
[The prepared statement of Mr. Thompson follows:]
Prepared Statement of Robert J.Thompson, Executive Director Of The
Androscoggin Valley Council Of Governments and Vice-Chair, Rural
Development Task Force Of The National Association Of Development
Organizations (NADO)
Thank you, Chairman McIntyre, Ranking Member Conaway and members of
the Subcommittee, for the opportunity to testify today on USDA Rural
Development programs and the important role they play in helping
regional and local organizations provide financial and technical
assistance to rural entrepreneurs and businesses.
My name is Bob Thompson. I serve as the Executive Director of the
Androscoggin Valley Council of Governments (AVCOG), a multi-
disciplinary regional planning and development organization serving 56
organized communities, and numerous townships and plantations in
Western Maine. We are the Economic Development District (EDD)
designated by the U.S. Economic Development Administration for our
region. In addition, we provide the primary management and staffing
support for the Maine Lakes and Mountains Tourism Council, the
Androscoggin Transportation Resource Center, a federally-designated
Metropolitan Planning Organization (MPO) serving the urbanized area in
and around our central cities of Lewiston and Auburn, and a Rural
Transportation Planning Organization.
I also serve as a Board Member of the National Association of
Development Organizations (NADO) and Vice-Chair of the NADO Rural
Development Task Force.
Before I begin, let me first thank the Subcommittee for your
leadership and support of rural development programs as part of the
2008 Farm Bill. The broad portfolio of USDA Rural Development programs
for business development, infrastructure, value-added agriculture
production and marketing, regional strategic planning and broadband
deployment are essential to the long-term economic competitiveness of
our nation's small urban and rural communities.
Chairman McIntyre, the members of NADO are also very appreciative
of your persistence and vision on the issue of federal-state regional
commissions, such as the Northern Border Regional Commission, the
Southeast Crescent Regional Commission and the Southwest Border
Regional Commission authorized in the 2008 Farm Bill. These federal-
state entities, which are targeted at multi-state, rural regions
suffering from persistent poverty, are structured to be complementary
partners with existing programs such as USDA Rural Development and the
U.S. Economic Development Administration. We strongly believe that the
successful implementation of the Northern Border Regional Commission
will help address the community and economic development needs of the
most severely distressed portions of the Northeastern United States.
This afternoon, Mr. Chairman, I will focus my remarks on three key
areas:
1. USDA Rural Development is an essential partner and funding
source for rural regions as they work to develop the
fundamental building blocks for community and economic
competitiveness. These include resources for basic
infrastructure, as well as business development finance tools
for entrepreneurs and businesses to create new employment and
wealth opportunities in rural areas.
2. USDA's Rural Business Enterprise Grant (RBEG) program and
Intermediary Relending Program (IRP) are highly effective
resources that allow intermediaries, such as AVCOG, to assist
rural entrepreneurs, business leaders and local officials as
they pursue innovative development strategies and business
opportunities.
3. USDA Rural Development should provide new and more aggressive
incentives, rewards and flexibility for rural communities to
work together on a regional basis to pursue innovative regional
development strategies, as envisioned in the 2008 Farm Bill's
Regional Collaborative Investment Program (RCIP). This is
essential for rural communities to compete in today's global
marketplace where we need the economies of scale, knowledge
clusters, and physical and human infrastructure necessary to
remain competitive. In Maine, the statewide network of Economic
Development Districts have begun working with state and local
officials, private sector leaders and nonprofit partners on an
exciting and innovative asset-based rural development strategy
that offers a great case study on the potential of USDA Rural
Development's RCIP program.
First, Mr. Chairman, USDA Rural Development is an essential partner
and funding source for rural regions and communities as they work to
develop the fundamental building blocks for community and economic
competitiveness. With USDA's assistance, rural communities across the
nation are now in a better position to pursue innovative development
strategies that are resulting in new job and wealth--generating
opportunities, whether in traditional sectors such as agriculture and
natural-resource based industries or emerging science and technology
fields.
Fifty years ago, one out of every two jobs in Maine was
concentrated in the manufacturing sector. By comparison, approximately
one in ten jobs is tied to manufacturing today. During the 1990's,
Western Maine was still very highly concentrated in the traditional,
manufacturing industries such as leather, textiles, apparel and wood
products, with 25 -35 percent of our job base in these very industries
being hardest hit by global competition. In the past year, our
unemployment rate has doubled, increasing from approximately 5 to 10
percent.
Western Maine exhibits many of the same characteristics as other
areas along the Canadian border from New York to Maine. We are faced
with poverty rates above the national average, median household incomes
nearly $7,500 below the national average, and stagnant or declining
populations. We also have many communities and areas of our region with
persistent unemployment problems.
The mass exodus of the state's manufacturing sector has left behind
large and small industrial complexes that often dominate our rural and
small urban centers. It has also left behind aging and decaying
infrastructure systems--primarily water and sewer systems that now need
costly upgrades, yet we have a dwindling tax and employment base to
finance these essential investments. The flexible nature of USDA Rural
Development infrastructure and community facility programs, combined
with the agency's continued support of small towns and rural areas, has
been vital to our ability to respond to the evolving nature of our
region's economy.
Second, Mr. Chairman, USDA Rural Development's Rural Business
Enterprise Grant (RBEG) program and Intermediary Relending Program
(IRP) are highly effective resources that allow intermediaries, such as
AVCOG, to assist rural entrepreneurs, business leaders and local
officials as they pursue innovative development strategies and business
opportunities. We encourage the committee to look at ways to increase
funding resources for these small yet invaluable programs.
Androscoggin Valley COG's region covers over 4,200 square miles of
forested mountains and fields carved by pristine lakes and rivers. The
majority of our region's population of 188,000 is scattered over 75
small towns, townships, plantations and unorganized territories. Our
two largest cities, Lewiston and Auburn, are located in the southern
portion of the region, sharing a combined population of only 58,893
residents. Early in the 1990s, AVCOG's policy board of local elected
officials and community leaders recognized that our dependence upon
major employers was a risk factor that could not be sustained.
As a result, an aggressive effort was initiated to establish
lending and technical assistance resources to help in the retention and
development of small-- to medium-sized businesses. Our strategy was not
simply to retain our existing entrepreneurs and firms, but to help them
grow and prosper. This required us to develop the lending capacity and
technical assistance resources needed to assist start-up companies and
existing firms with seed capital, gap financing and business planning.
In 1995, we secured a USDA Rural Business Enterprise Grant of
$500,000. Of this total, $425,000 was for microlending and $75,000 was
dedicated for technical assistance. As one of the smaller USDA
initiatives, the RBEG program is often overlooked. However, we have
found that the broad, flexible nature of RBEG assistance, combined with
its focus on small business development, makes the program an
indispensable tool in our region.
To date, we have lent over $900,000 that has leveraged an
additional $14.8 million in owner equity and private funds. The average
RBEG loan amount is approximately $27,000, and the program has helped
AVCOG and its partners create or retain 350 jobs in our rural region.
In addition, we used approximately $75,000 in earnings from our
RBEG investments to access an additional $1.15 million in Small
Business Administration (SBA) funds. Utilizing the SBA assistance, we
have generated over $1.3 million in loans that have leveraged nearly
$700,000 in additional capital investment and created or retained 275
jobs.
Ultimately, the initial $500,000 RBEG investment has enabled us to
create a lending pool of approximately $1.58 million that has generated
over $2.2 million in loans and leveraged an additional $15.5 million in
business capital. More importantly, these investments have helped
create or retain 631 jobs with a highly efficient cost ratio between
$2,500 -$4,500 per job.
USDA Rural Development's Intermediary Relending Program (IRP) is
another invaluable and often overlooked resource for rural regions.
This program was created with the primary intent of providing gap
financing to enable our regional and local banks to write debt in
conformance with national standards.
Our organization has been awarded three IRP loans for a total of
$3.5 million. To date, the AVCOG IRP program has lent nearly $8.4
million that has leveraged over $43.7 million in other capital
investment. Of the $43.7 million total, $3.6 million is in owner
equity, $33.3 million is in bank debt and $6.8 million is in other
public funds. Our loan loss rate is currently 3.2 percent.
As we gained success and impact with our lending it became evident
that additional community impact could be created if we utilized a
portion of the IRP funding to invest in private, qualified, community-
sponsored redevelopment projects. We decided to make funds available
with reduced interests rates and flexible terms to encourage
reinvestment by the private sector into our downtowns and village
centers. To date, we have made three such incentive deals, including
the Bass Wilson Mill project.
The Bass Wilson Mill, located in the heart of Wilton, a town of
4,100 people in Southwest Maine, is the original G. H. Bass Shoe
production facility. It is an imposing four-story, wood-frame structure
that dominates a small picturesque community of one--and two-story
shops and homes.
In 1998, as G. H. Bass announced its intention to halt shoe
production in Maine in favor of off-shore operations, the Wilson Mill
was vacated. Bass offered the building to the Town of Wilton for a
minimal amount, along with a commitment to mitigate any environmental
issues.
When faced with the prospect of a vacant, deteriorating wood frame
structure in the center of the community, the Town of Wilton was
initially at a loss on how to proceed. Local leaders turned to AVCOG
and our business lending programs for assistance. AVCOG staff worked
with the community, and it was determined the best course of action was
to re-establish the local development corporation to take on the
project. AVCOG staff assisted in soliciting a proposal for a master
development agreement to rehabilitate the property. Ultimately, the
property was transferred to a private developer for one dollar, and we
lent $250,000 from our IRP community reinvestment pool to the
developer.
Initial private investment was also $250,000 and the pool funds
were lent at 5 percent, interest-only accrued, for the rehabilitation
period. The term was 60 months with the conversion of any remaining
balance to 8 percent for a new five&ar term. The intent was to ease
costs during the rent-up period and to create incentives for repayment
at the end of the initial term to replenish our lending pool. In fact,
this was the result.
This is just one example of the innovative nature of USDA Rural
Development business programs and their potential impact in rural and
small urban communities. Before tapping into the technical capacity of
AVCOG, along with our successful USDA loan portfolio, the town of
Wilton lacked the staff and financial resources to accomplish this
deal. Today, the Bass Wilson Mill property is fully renovated, houses
five businesses with 100 employees and pays $14,200 in taxes each year.
In addition, community leaders have secured financing for facade
rehabilitation and off-street parking to complement the mill
renovation.
The success of the project also gave community leaders the
confidence to repeat this deal structure when G. H. Bass proposed
turning over its primary production facility, a 300,000 square-foot
property composed of several connected buildings on the edge of the
village. This project, another AVCOG/IRP investment, is progressing
quickly with the hopes of becoming a commercially viable deal in the
near future.
Finally, Mr. Chairman, I would like to briefly discuss an exciting
and innovative asset-based rural development strategy that the Economic
Development Districts (EDDs) in Maine are working on with state and
local officials, private sector leaders and nonprofit partners that
could be a model for USDA Rural Development's Regional Collaborative
Investment Program (RCIP).
In 2006, following a thorough assessment of Maine's economy, the
Brookings Institution published An Action Plan for Promoting
Sustainable Prosperity and Quality Places. Our Governor embraced many
of the report findings and, with additional recommendations from
Governor-appointed task forces, has called for a new public-private
partnership that will help refocus our economic development activities
through regionally led, asset-based development.
The new statewide effort, Mobilize Maine, will be launched next
month and is funded jointly by the private, public and nonprofit
sectors throughout Maine. It is organized at the grassroots level
through the leadership of Maine's six EDDs, providing the first
systematic and consistent approach to planning statewide economic
development.
Most prominently, the initiative changes the model for rural
economic development in Maine by addressing our disconnected,
fragmented and, often times, ineffective system. It focuses our work on
producing results that improve the personal income of Maine workers.
It acknowledges that the quality, size and availability of our
workforce must be improved even in the context of our state's
challenging demographics. It acknowledges that Maine's quality of place
is our most significant competitive asset in the global competition for
skill-based employment and workers. It also attempts to change the way
we think about producing positive changes to our economy by leveraging
the elements that make our regions unique-our assets.
In the first year, this initiative aims to accomplish two broad
goals. First, our partners will engage collaborative private, public
and nonprofit sector investors and leaders who are committed to
continuous development and implementation of community and economic
development strategies and action plans that rise above political
administrations. Second, we will create a sense of urgency at the
regional and state level for the need to transform Maine's economic
performance as a foundation for sustainable economic growth.
In closing, I urge your continued support of USDA Rural Development
programs, especially vital business lending and regional innovation
programs such as IRP, RBEG and RCIP. USDA Rural Development is an
essential partner and funding source for rural regions. It is also a
vital tool for regional development organizations, such as AVCOG, as we
strive to provide assistance and build capacity for the rural
communities that rely on us for expertise and assistance.
Thank you again, Mr. Chairman and members of the Subcommittee, for
the opportunity to testify today. I would welcome any questions.
Mr. McIntyre. Thank you, Mr. Thompson.
Dr. Smith.
STATEMENT OF RANDY SMITH, PRESIDENT, RURAL COMMUNITY COLLEGE
ALLIANCE, ALTUS, OKLAHOMA
Mr. Smith. Good afternoon, Chairman McIntyre, Ranking
Member Conaway and Members of the Subcommittee.
I am Randy Smith from Altus, Oklahoma. I am president of
the Rural Community College Alliance, an affiliated council of
the American Association of Community Colleges.
The American Association of Community Colleges serves as a
national voice for the country's nearly 1,200 community
colleges. These colleges enroll more than 11.6 million students
annually. More than half of the nation's 2&ar colleges are
rural-serving with a combined enrollment of over 3.2 million
students annually.
The Rural Community College Alliance represents 150 rural-
serving colleges in four States, including all the nation's
tribal colleges. Rural 2&ar colleges have the ability to
respond quickly to the needs of the communities they serve.
When a new or existing business needs a trained workforce, they
turn to their local 2&ar college for assistance.
Rural colleges are on the frontline of workforce
development. They make a daily impact on the development of the
services in their service area and regions. Due to time
constraints, I am going to summarize my written testimony and
touch on four key areas of economic development: energy,
biotechnology, rural health, and emergency services.
Rural community and technical colleges are stepping up to
provide workforce training to the energy industry. Many of the
industry jobs are high-skilled high-wage positions. Bismarck
State College in North Dakota, Somerset Community College in
Kentucky and many others work closely with industry to train
individuals in the field of electrical transmission system
technology, training a much needed workforce contributing to
the overall economic health of their regions.
The Kentucky Coal Academy is comprised of four community
and technical colleges located throughout Kentucky. Since the
creation of the academy in 2005, these colleges have trained
25,000 students and incumbent workers in the mining profession.
These jobs accounted for $1.34 billion in wages in the State of
Kentucky in 2006.
Numerous other community colleges have developed programs
in renewable and alternative energy sources.
Mr. Chairman, as you know, biotechnology has become a
growing field in your home state, and rural 2&ar colleges are
leading the way in this important industry. Southeastern
Community College in North Carolina has the distinction of
being the first agricultural biotechnology associate degree
program in the U.S. Their program concentrates on the
propagation of plants using tissue culture techniques. This
allows trained technicians to produce a large quantity of
plants from a very small amount of mother stock, resulting in
plants that are pest--and disease-free.
Access to quality health care is essential for attracting
and retaining businesses and prospective workers to a
community. Rural community colleges educate more than half of
the nurses and the majority of other allied health care
professionals nationally. The cost of educating and training
students in these disciplines is high.
Indian Hills Community College in Iowa recently looked at
ways to increase the number of health occupation graduates and
to address the shortage of health care workers in the region.
They organized a rural health care education partnership to
address the issue. The education and industry partnership
recommended things such as technology and more distance
education to increase the number of graduates. They have since
implemented these ideas and have seen their enrollment in many
of their health occupation programs double in size. They have
successfully addressed the shortage of health care workers in
their rural area through partnerships and the use of
technology.
Nationally, 80 percent of law enforcement officers, fire
fighters and EMS professionals are educated at community
colleges. In February of 2008, a refinery in Big Spring, Texas,
suffered a major explosion. The resulting massive damage to
both the refinery itself and the business operation required
first responders from within the area to arrive on the scene.
There was a huge fire to fight, hazardous conditions to monitor
and a major interstate diversion to address. Emergency workers
trained by Howard Community College were on hand to protect
life and property and assist during the cleanup and rebuilding
process.
Alabama Southern, East Central Mississippi, and Meridian
Mississippi Community Colleges have joined forces to form the
Mississippi Entrepreneurial Alliance and promote
entrepreneurship in rural communities. This partnership of
rural colleges has successfully assisted many businesses to
start and grow in the two state rural areas of this region.
In summary, the examples I have spoken of are just a few of
the hundreds of innovative economic development projects
currently underway at America's rural 2 year colleges. Our
rural colleges are a critical component to the economic
development and strength of their regions. Rural 2&ar colleges
are all about training people for jobs and growing the local
economy in collaboration with a wide variety of partners.
Truly, rural community colleges create an opportunity in place.
Chairman McIntyre, Ranking Member Conaway and Members of
the Committee, I thank you for the opportunity to testify
before the Subcommittee and share with you the vital and
outstanding work that our rural community colleges are doing.
Thank you.
[The prepared statement of Mr. Smith follows:]
Prepared Statement of Dr. Randy Smith, President, Rural Community
College Alliance Altus, Oklahoma
Good afternoon, Chairman McIntyre, Ranking Member Conaway, and
members of the Subcommittee on Rural Development, Biotechnology,
Specialty Crops, and Foreign Agriculture. It is an honor and privilege
to testify before your Subcommittee today. My name is Randy Smith, and
I am President of the Rural Community College Alliance, an affiliated
council of the American Association of Community Colleges.The American
Association of Community Colleges serves as the national voice for the
country's nearly 1,200 community colleges. Community colleges enroll
more than 11.6 million students annually. Forty-four percent of all
U.S. undergraduates attend community colleges. The colleges enroll a
higher percentage of minority students than any other sector of higher
education. 52% of Hispanic, 43% of Black, 45% of Asian/Pacific
Islander, and 52% of the country's Native American undergraduates are
attending community colleges, where the average student age is 29.
More than half of the nation's 2&ar colleges are rural-serving,
with an estimated combined enrollment of 3.2 million students annually.
The Rural Community College Alliance (RCCA) represents more than 150
rural-serving colleges in 34 states.
Rural community colleges, like their suburban and urban
counterparts, rely on state and local funding to maintain low tuition
and open-door access for individuals seeking postsecondary education
and workforce training. The average annual tuition and fees for a full-
time student at public community colleges is about $2,400, which is
considerably less than that of 4&ar public colleges or private
universities. The majority (60%) of students who enroll at community
colleges, however, are part-time students. Most of these students are
employed at least part-time and many juggle work and family
responsibilities while attending college.
America's rural community and tribal colleges offer an affordable,
quality education that assists students in meeting their immediate and
long-term educational and career goals. Their comprehensive missions,
coupled with open admissions, provide a wide variety of opportunities
for both students and businesses to access services and educational
programs designed to help secure their future success. In addition to
direct academic programs, community colleges play an important role in
economic development, especially in rural areas.
Community colleges share two primary missions. First, they are
dedicated to serving their students through excellent teaching and
learning. Community colleges excel in delivering instruction and
technical training. Second, community colleges exist to help their
communities with economic development. They serve as the local catalyst
for job training and development. Community colleges have the ability
to respond quickly to the needs of the communities they serve. When a
new or existing business needs a trained workforce, they often turn to
their local two-year college for assistance. Rural community colleges
truly create opportunities in place for their students, for their
communities, and for local and regional business and industry.
Rural community colleges help their communities with economic
development by:
Providing expert faculty to educate, train or re-train
workers.
Providing technology assistance and training to new and
established businesses to help them reduce costs and improve
productivity.
Partnering with city and county authorities to help
recruit new industries.
Teaching students on the latest high-tech equipment used
by industry and offering flexible schedules and curricula beneficial to
employers.
Offering both short-term and long-term training for
multiple shifts and on the job site, if needed.
Providing temporary space for new companies interested in
moving to the community, while facilities are under construction.
Providing space for start-up businesses, i.e., business
incubators.
Providing online training opportunities for employees
seeking to upgrade their skills.
Providing entrepreneurship certificates and degrees.
Providing specialized courses in a modular format
designed to meet the specific needs of a particular industry.
Creating training programs to upgrade technical skills
for potential employees required by a specific industry.
Administering State and regional incentive programs to
maximize economic development opportunities for new and existing
business and industry.
Community colleges are on the frontline of workforce development.
Some specific examples of rural-serving community colleges making an
impact on the economic development of their communities are listed
below.
Alternative, Renewable, and Traditional Energy
Community colleges have an important role in helping people qualify
for ``green jobs.'' Rural America continues to provide much of the
energy for the rest of the nation, whether it is petroleum, coal, or
one of the newer energy sources. As the demand for alternative and
renewable energy increases, the need for more skilled workers grows.
Community colleges produce highly qualified energy technicians that
help with the fabrication, installation, and maintenance of turbines,
solar panels, and other key elements needed for wind, solar,
geothermal, and biomass energy sources.
A few examples of the many community colleges providing training
for alternative and renewable energy technicians include Columbia Gorge
Community College (OR), Iowa Lakes Community College (IA), Mesalands
Community College (NM), and Lane Community College (OR).
Community colleges such as Bismarck State College (ND) work closely
with industry to train individuals in the field of electrical
transmission systems technology. With funding from the National Science
Foundation's Advanced Technological Education (ATE) program, Bismarck
State College and its industry partners created an associate degree
program for electrical transmission system operators.
The Kentucky Coal Academy (KCA), comprised of four community and
technical colleges located in the eastern and western Kentucky
coalfields, provides career and technical education and training for
students interested in mining careers. The colleges ---- Big Sandy
Community and Technical College, Hazard Community and Technical
College, Madisonville Community College, and Southeast Kentucky
Community and Technical College ---- through the Kentucky Coal Academy
have trained more than 25,000 students and incumbent workers in the
mining profession since KCA's creation in 2005. These jobs accounted
for $1,034,834,951 in wages in the state of Kentucky in 2006. The $4.97
billion in receipts from coal produced and processed in Kentucky in
2006 generated additional economic activity totaling $588 billion and
accounted for 55,301 jobs in 2006.
Somerset Community College in rural Kentucky has been successful in
establishing a lineman training program to prepare new employees for
the energy industry. The college partnered with the local rural
electric cooperative, the area economic development district, and city
and county officials to create this needed program. To date, 42 linemen
have graduated from the program, supplying a much needed technical
worker to the local industry. Through extensive partnerships the
college has been the catalyst for establishing an important workforce
training program to provide technical workers who will earn a high wage
and contribute to the local economic base.
Agriculture
Community colleges in rural America have a longstanding role in
agriculture, educating future farmers and providing technical training
for those interested in learning the latest farming technologies.
Several colleges have launched new viticulture programs, including
Northeast Iowa Community College (IA), Shawnee Community College (IL),
and Redlands Community College (OK). Faculty members from these
community colleges have a program, the Viticulture and Enology Science
and Technology Alliance (VESTA), which utilizes Missouri State
University's expertise in grape research and education. Using distance
education as well as classroom instruction and hands-on experience in
the vineyards, VESTA's program provides students and employees in the
wine industry with the latest industry-validated programs.
Biotechnology
In addition to partnering with industry, community colleges often
work with consortia of colleges and universities to deliver high-tech
programs to meet the needs of their students and communities. For
example, the Robeson Regional Biotech Education Consortium (RRBEC)
promotes agricultural biotechnology in southeastern North Carolina.
Robeson Community College in Lumberton, NC, has an articulation
agreement with the University of North Carolina to provide
biotechnology courses and works with local public schools and industry
partners to provide educational programs to spur economic growth for
the region.
Southeastern Community College in North Carolina has the
distinction of being the first agricultural biotechnology associate
degree program in the United States. SCC's program concentrates on the
propagation of plants using tissue culture techniques (micro-
propagation). This allows a technician to produce large quantities of
plants from a very small amount of mother stock resulting in plants
that are pest and disease free.
Rural Health
Access to good health care is essential for attracting and
retaining businesses and prospective workers to a community. Community
colleges educate more than half (59%) of the new nurses and the
majority of other new health-care workers nationally. For rural
communities, educating and retaining skilled nurses, dental hygienists,
lab technicians, respiratory therapists, radiology technicians,
paramedics, and other health care providers is particularly
challenging. The cost of educating and training individuals in these
disciplines is high. The cost of specialized equipment, laboratories
and clinical facilities, and expert faculty members is daunting.
Retention of skilled health care personnel is also challenging,
especially given the higher salaries offered in large urban medical
centers.
Western Oklahoma State College has been successful in educating a
higher number of nurses in a very rural area through the use of
technology. Through the use of interactive television and on-line
courses, Western has been able to open three additional sites where
nurses are trained. These rural communities would have continued to
have a shortage of nurses had it not been for the innovative use of
technology in order to deliver curriculum to several satellite sites at
one time. The use of technology has allowed Western to double its
number of nursing program graduates in just five years.
Approximately six years ago, the faculty in the Health Occupations
Department along with college administration at Indian Hills Community
College in Iowa identified a need for a stronger relationship between
the health care facilities and the education programs that were
preparing future workers. An initial survey of future workforce needs
resulted in the creation of the Rural Health Education Partnership
(RHEP). This organization is focused on delivering easily accessible
high-quality programming to meet the ongoing educational needs of the
health care professionals and first responders in the ten county area
served by the college. Currently the RHEP has 79 members. The
membership includes critical access hospitals, long term care
facilities, emergency medical services and fire departments.
Indian Hills Community College is located in rural southeast Iowa.
Discussions with members of the RHEP revealed a critical need for
health care workers coupled with the difficulty of attracting and
keeping health care professionals in this rural area. It became clear
that the best solution was to ``grow our own''. The college had a
variety of education programs available. One of the challenges was
getting place-bound individuals to education programs. This has become
more critical as transportation costs have increased. In 2004 a
decision was made to take the programs to the students via the
Internet. By 2005 the Health Information Technology Program had been
reinvented in an online format. In the next two years the remaining
programs in the Health Informatics Cluster--Medical Transcription,
Medical Insurance Coding and Health Unit Coordinator were redesigned
for online learning. Enrollment in these programs more than doubled. As
a result of the success of the Health Informatics programs, the
Associate Degree Nursing Completion and Pharmacy Technology Programs
are being revised for delivery using web based technology.
Emergency Services
Nationally, close to 80% of law enforcement, fire fighters, and EMS
professionals are educated at community colleges.
On February 18, 2008, a refinery in Big Spring, Texas, located
along I-20 suffered a major explosion that received national news
coverage. The explosion resulted in massive damage to both the refinery
itself and the business operation. First responders from the community
and the region were on-site within minutes. Miraculously, there were no
deaths and a low number of injuries suffered. There was a huge fire to
fight, hazardous conditions to monitor and a major interstate diversion
to address. Emergency workers trained at rural community colleges were
on hand to protect life and property.
The possible death of a major business was at stake and the
resultant economic loss to a community weighed heavily on the area. The
battle with the explosion was won. Next the battle to recover would
begin. From the first responders to the recovery process, partnerships
and the relationship between the refinery and Howard College in Big
Spring, Texas, would factor into the success of the company to resume
its business operations by summer and to celebrate its 80th anniversary
on February 18, 2009.
Partnerships / Entrepreneurial Pursuits
Alabama Southern Community College, East Central Mississippi
Community College, and Meridian Mississippi Community College secured a
WIRED grant which is now in its final stages. The Mississippi
Entrepreneurial Alliance (MEA) was formed to promote entrepreneurism in
rural communities. This group of rural community colleges has been
striving to identify and empower local champions to promote small
businesses to start and grow in the rural areas of the two-state
region.
Miles Community College in Montana is facilitating a community
vision-building project with the area economic development council and
the chamber of commerce. This program will determine what the citizens
and business community want their area to look like in the year 2015.
Through the use of focus groups which include high school students,
senior citizens, church groups, area ranchers and business owners,
specific goals will be identified and implemented. The college will
host a series of meetings where community members can vote on the
activities they want to see implemented.
North Iowa Area Community College (NIACC) located in rural North
Iowa has been instrumental in developing an economic development
strategic plan for the region. NIACC has been nationally recognized for
its John Pappajohn Entrepreneurial Center (JPEC) and additional
regional economic development efforts. NIACC underwrites the cost of
supporting economic development through its Lean Training (companies
reported over $273 million in savings or increased profits as a
result).
The NIACC JPEC has been recognized nationally for its exceptional
efforts in business start up, growth and retention efforts. Through its
programs, over 290 new businesses have been started and over 70% of
those are still in business at the end of 2008, attesting to the value
of the initial and ongoing services provided. The NIACC JPEC supports
business from birth to rebirth, and was instrumental in an 80+ person
company making a transition that enabled it to remain in the rural
community and retain the jobs there. The NIACC JPEC has the mission of
entrepreneurial education (traditional and nontraditional), business
support, and partnerships to stimulate entrepreneurship. More than $100
million in capital and loans have been generated through this project
to help fund 12 businesses. This helps drive rural economic development
in North Iowa through investing in new and expanding businesses.
Summary
The examples listed in this document are just a few of the hundreds
of economic development projects currently underway at America's rural
community and tribal colleges. Rural community colleges are a major
contributor to the economic development of the communities they serve.
Rural community colleges are providing innovative strategies all
across the nation to spur and enhance economic development. Community
colleges often serve as the catalyst for this important development,
and they are a vital component to the economic prosperity of the
regions they serve, as evidenced by the many examples listed above.
Please consider the importance of rural community colleges as a
major contributor to the overall economic health of rural communities.
Community colleges are all about training people for jobs and growing
the local economy in collaboration with a wide variety of partners.
Truly, rural community colleges create opportunities in place.
Chairman McIntyre, Ranking Member Conaway, members of the
Subcommittee, I thank you for the opportunity to testify before the
Subcommittee on Rural Development, Biotechnology, Specialty Crops, and
Foreign Agriculture today.
Mr. McIntyre. Thank you.
Thanks to each of you for excellent testimony. The
Committee will suspend for just a moment. We have a set of
votes we are trying to deal with.
Given the fact that we have once again been interrupted by
votes, as afternoon hearings are prone to have happen, and in
an effort not to unduly tie up the witnesses and others who are
involved in today's hearing and to allow for other commitments
that I know many of you have, we are going to ask the Members
of the panel to submit their questions in writing and to ask
the members of our panel to submit them to the testifying
panel.
Members of the Subcommittee, in other words, please submit
your questions in writing to the panel. Panel, once you have
received those questions, if you would respond, please,
immediately, no later than 10 calendar days after you receive
them, so that we can complete our record.
Also, I would like to remind the witnesses today that the
record will remain open 10 days from today for any additional
testimony you might like to submit or any other supplementary
material that you would like to forward to us.
We thank each of you for attending today. In closing, I
would like to ask Mr. Lambe, if he considers the Southeast
Crescent Regional Economic Commission, which you spoke about
persistent poverty, how such regional commissions can help
local communities innovate. If you would please go ahead think
about preparing a response to that question.
In addition, Dr. Markley, also the rural
microentrepreneurial assistance program that you referenced and
that this Subcommittee included in the farm bill, as that
program is getting ready to be implemented for the first time
by USDA, we would ask for your advice as to what would ensure
that we are able to assist the most microentrepreneurs in rural
areas.
Those two questions, if you all would take under
consideration. All remaining questions will be submitted in
writing to you, and we do ask for your response within 10 days.
With that, we want to thank each of you for your testimony
today.
I want to thank the Subcommittee Members for their patience
in light of the unusual circumstances.
And this hearing now of the Subcommittee on Rural
Development, Biotechnology, Specialty Crops, and Foreign
Agriculture is adjourned.
God bless you all. Godspeed in your travels.
[Whereupon, at 2:30 p.m., the Subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Supplemental Material Submitted By Jeff Yost, President and CEO,
Nebraska Community Foundation, Lincoln, Nebraska
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Question 1. You mention ``creative regional governance,
partnerships, and organizations'' as an essential characteristic for
success for rural communities. We were successful in including the
creation of several new regional commissions, including the Southeast
Crescent Authority, in the 2008 Farm Bill. How do such regional
commissions help local communities innovate?
Answer. I think the key is to provide flexible and strategic
resources aimed at building the capacity of rural communities. As I
mentioned in my testimony, in order for these rural communities to
innovate, there has to be a certain level of capacity within the local
community. Helping to build that local capacity through leadership
development, workforce training and assistance, accurate data for
community leaders on their particular opportunities and most
importantly, through flexible investments in promising ideas will go a
long way toward helping local communities innovate.
Question 2. You mention in your testimony the importance of
evaluating success while also acknowledging that measurable results
from a project may be decades in the making. What advice would you give
to rural leaders attempting to collect the data that will show whether
or not a particular project is succeeding? Who in the community usually
takes on that role?
Answer. The notion of success in rural development is a slippery
one. Success in the mind of a local elected official might not be the
same as success in mind of the local preacher. The first and most
important thing about evaluating success is to decide, up front, what
success looks like and to ensure that the key stakeholders in the
community agree. Once there is broad agreement on what success looks
like, then I would advise rural leaders to seek assistance from
community colleges, universities, colleges, regional Councils of
Government, state or federal agencies, or other institutions to help
come up with realistic metrics for evaluating progress. The first step
is to reach local consensus on a vision of success. The second step is
to seek expert assistance on the development of metrics. Good
evaluation experts will help community leaders come up with ways to
measure and assess short--, medium--, and long-term outcomes. As for
the organization or institution within the community that usually
assumes this role, I would say it varies. In some cases it's the
chamber of commerce, in others it's the local government, in others
it's the local community college. The most important thing is that
somebody does assume the responsibility and that they have the
resources and expertise to continually monitor success and communicate
progress to the community's decision-makers.
Questions Submitted by Hon. K. Michael Conaway a Representative in
Congress from Texas
Question 1. More than 88 programs administered by 16 different
federal agencies target rural economic development. USDA Rural
Development administers most of these programs and is designated as the
lead federal agency. In your experience, does this divided approach
among so many agencies present additional challenges and would it be
more effective to consolidate the leadership and funding into just a
few major programs under USDA?
Answer. In my experience, the confusing nature of federal programs
for rural development does cause confusion at the local level. It is a
daunting task to negotiate opportunities among so many agencies and
programs and rural communities rarely have the staff capacity and
expertise to take on the task.
Questions Submitted by Hon. William ``Bill'' Cassidy a Representative
in Congress from Louisiana
Question 1. By your testimony we hear each community is unique in
its challenges and available resources. What are the core, critical
resources necessary for small, rural communities to succeed in economic
development? Or, if resources tend to vary widely among communities,
then how can a community effectively determine its strongest resources?
Do you have a metric to predict results with a given set of resources?
Answer.As I mentioned in my testimony, I believe that the critical
ingredients for ``success'' in rural development are leadership, local
vision, a broad understanding of local assets, creative governance,
measures to evaluate progress and a comprehensive notion of
development. I understand that none of those ingredients speak to a
specific resource, but in my experience there is not a core critical
resource that's absolutely necessary across rural communities. Some
communities have figured out ways to thrive on pig waste, others on
oil, others on community theater, and others on a combination of
resources. The second part of the question, in terms of how a community
can determine its strongest resources, is I think the key here. There
are lots of ways to assess assets and opportunities, but what's most
important is that the assessment is done with an open mind. I've seen
this done best when somebody or an organization from outside the
community facilitates the process with a fresh perspective on the
community's opportunities. I do not have a metric to predict results
with a given set of resources. In my experience, there are far too many
context specific circumstances to predict results generically.
Response from Dr. Deborah M. Markley, Managing Director and Director of
Research, RUPRI Center for Rural Entrepreneurship
Questions Submitted by Hon. Mike McIntyre a Representative in Congress
from North Carolina
Question 1. The Rural Microentrepreneur Assistance Program is also
a new rural development program established in the 2008 Farm Bill. As
USDA prepares to implement this program for the first time, what advice
would you give them to ensure that we are able to assist the most
microentrepreneurs in rural areas?
Answer. Reaching as many microentrepreneurs as possible in rural
America regarding the new USDA Rural Microentrepreneur Assistance
Program can happen through a number of channels. For 20+ years, the
U.S. field of microenterprise practitioners has brought technical
assistance and access to capital to entrepreneurs throughout the land.
Over half of these are dedicated in whole or in part to serving rural
regions. Such practitioner organizations predominantly offer technical
assistance--assisting startup and emerging (potential for growth)
entrepreneurs with feasibility studies, business plan development,
strategic market analysis and access, human resource management, and
more. Some couple this help with access to hard-to-find capital through
a wide range of revolving loan funds, often funded by US Department of
Agriculture, Small Business Administration, or Community Development
Block Grant monies.
Newer model technical assistance techniques that are gaining good
results include entrepreneurial coaching, access-to-market strategies,
entrepreneurial networks, regional flavor, economic gardening, and
HomeTown Competitiveness, to name a few. Each focuses on building an
entrepreneurship development system of supports and connections for
entrepreneurs based on their skill set levels, the life stage of their
businesses, the best market intelligence that can be provided, and the
assets of the surrounding community. Deploying these new USDA
microenterprise funds primarily for technical assistance services could
result in assisting thousands of very small business owners and their
families each year. The microenterprise field has had a long-term need
for technical assistance funding, especially in rural areas, and this
type of allocation will be a significant benefit to many.
Recommendations
Rural Practitioner Task Force. In short order, convene a task force
of ``consumers'' --rural microenterprise practitioners--in order to
advise on the design of a program that is the most responsive to rural
microentrepreneurs' needs, with a strong focus on encompassing
technical assistance approaches. Practitioners can be identified
through the organizations identified below in the Communications
recommendation. The task force could also be utilized in creating and
monitoring an evaluation system to identify the most effective ways in
which this funding is being deployed.
Broad Dissemination of Information about the Program. The targeted
dissemination of information about the USDA Rural Microentrepreneur
Assistance Program and its related Request for Proposals will be
essential to widespread participation in this effort. This could be
shared through the RUPRI Center for Rural Entrepreneurship's
newsletter, as well as on its website
(www.energizingentrepreneurs.org). Its newsletter circulation is
greater than 4,000 and is read by a variety of rural practitioners who
are working with entrepreneurs throughout the countryside. As well, the
news from the e-newsletter is picked up by several other newsletters
and listservs to further extend its rural reach. In addition, the
Center would collaborate with other rural organizations (both national
and regional) to make sure that the announcement of the program was
widely broadcast through their websites and newsletters.
Secondly, there is a directory of microenterprise practitioners
that has been created by FIELD at the Economic Opportunities Program of
the Aspen Institute. The directory could be used to supply every
microenterprise practitioner with the knowledge to utilize the program
with its rural clients. Over 550 practitioner programs are listed in
the 2002 Directory of Microenterprise Programs, and at least half of
them have served rural areas in some part. The directory can be found
at http://fieldus.org/Publications/index.html#2002Dir.
Third, there are networks for microenterprise development in about
25 states. These are statewide coalitions that concern themselves with
helping startup and existing microenterprises to thrive, and all of
them address the rural areas of their states. Most are memberships
composed of microenterprise practitioner organizations that work
directly with the entrepreneurs, and thus provide the most direct route
for getting services from the new rural program to the end user. There
is a Statewide Microenterprise Association (SMA) that is managed by
CFED, and connections to the various statewide coalitions can be made
by going to http://www.cfed.org/focus.m?parentid=32&siteid=40&id=40 or
contacting Kimberly Pate, Vice President for Strategic and Public
Partnerships, [REDACTED].
Finally, the national trade association for microenterprise, while
not specializing in rural microenterprise, has the ability to broadcast
information about new programs to its 300+ members through its website,
www.microenterpriseworks.org, or via teleconferences and webinars. A
former Rural Committee composed of member practitioner organizations
followed the development of this program closely and is poised to
assist in its implementation as called upon.
Questions Submitted by Hon. K. Michael Conaway a Representative in
Congress from Texas
Question 1. More than 88 programs administered by 16 different
federal agencies target rural economic development. USDA Rural
Development administers most of these programs and is designated as the
lead federal agency. In your experience, does this divided approach
among so many agencies present additional challenges and would it be
more effective to consolidate the leadership and funding into just a
few major programs under USDA?
Answer. Rural America faces a variety of challenges, including lack
of trained health care professionals, lack of access to Broadband,
lower rates of college enrollment, more limited access to business
support services. All of these challenges make rural economic
development more difficult for rural communities and regions. And, the
challenges offered here can be most effectively addressed by different
agencies of the Federal government--Health and Human Services,
Agriculture, Commerce, Education. However, to be most effective, these
various agencies should be guided by a common vision for rural
development. This vision should address several questions. Why do we
allocate funds to rural development? What goals are we trying to
achieve? How can we move, at the Federal level, from a rural
development strategy that focuses on spending in rural regions to one
that emphasizes investing in rural regions?
What is most critical for rural economic development is not
consolidation but coordination of Federal programs. In a recent speech
before the Rural Community Economic Development Conference sponsored by
the Illinois Institute for Rural Affairs at Western Illinois
University, Dr. Sam Cordes, Associate Vice Provost for Engagement, Co-
Director of the Center for Regional Development, and Assistant Director
of the Cooperative Extension Service, suggested the need for a White
House Office of Rural Policy that would work in a similar fashion to
the White House Office of Urban Affairs established by Executive Order
on February 20, 2009. Such an office could provide leadership for rural
policy and help to coordinate the economic development efforts of
agencies throughout the Federal government. The suggestion of a White
House Office is not a new concept and is not the only approach to
achieving the desired level of coordination. Another option would be to
create an inter-departmental working group, at the secretary level,
that works to align departmental investments in support of the unified
rural development strategy or vision described above.
The Regional Collaborative Investment Program (RCIP) also plays an
important role in support of a more coordinated Federal response to
rural development challenges. RCIP provides a mechanism for regions to
build a more collaborative approach to rural development--an approach
that moves from a focus on program spending to a focus on investing in
innovation. If RCIP guidelines are tied to a more collaborative and
coordinated approach to making Federal investments in rural
development, rural regions would have an opportunity to develop their
competitive advantages in a way that is comparable to the regional
approach taken in most urban and suburban areas. RCIP can be a tool for
identifying appropriate investments in rural regions that can be most
effective in creating this competitive advantage.
Questions Submitted by Hon. Glenn Thompson a Representative in Congress
from Pennsylvania
Question 1. You talked about how energy-related jobs could
significantly contribute to rural economic development. I couldn't
agree more. Oil and gas has been the dominant economic force in the
northwestern part of my district for over 150 years. However, large
areas of my rural district have gone further into recession as oil and
gas production has declined -- and I would not hesitate to blame
overregulation as one of the reasons for this decline. How do you view
the role of traditional energy sources as a way to rejuvenate rural
America?
AnswerRural America is well positioned to participate in the
country's drive toward energy independence. Traditional energy sources
will continue to play a role in some parts of rural America--the Center
is working in western North Dakota where a boom in traditional energy
production is protecting that region and many of its residents from the
harshest effects of the current economic downturn. However, to the
extent that traditional energy resources are non-renewable, a rural
economic development strategy built solely around these supplies is not
likely to produce sustained rural growth. Rural communities and regions
are likely to benefit from development strategies that capture a
broader range of energy opportunities including renewable fuels such as
wind, solar, and biofuels. These alternatives also represent fertile
ground for rural entrepreneurs who can create business opportunities by
building on regional energy assets.
Entrepreneurial support organizations are rising to this challenge
and creating new products and services to support entrepreneurs in
``green'' and renewable energy fields. For example, Appalachian
Community Enterprises, a microenterprise program in northern Georgia,
has launched a Green Loan program to support the capital and technical
assistance needs of entrepreneurs (http://www.georgiagreenloanfund.org/
).
Question 2. For a several reasons, there are areas within my
district that have inadequate access to high speed internet and cell
phone coverage. Dr. Markley, do you have any advice on how communities
without broadband and inadequate cell phone service can adapt?
Answer. Inadequate access to high speed Internet and cell phone
coverage presents a number of significant challenges to rural
communities. Internet and cell service are basic elements of the
infrastructure necessary for rural communities to be competitive in a
global economy and to provide a high quality of life. Without these
services, rural school children are at a disadvantage in accessing web-
based learning, rural entrepreneurs cannot reach distant markets, rural
doctors cannot use telemedicine to benefit their patients and rural
youth migrate to more tech-savvy communities.
This infrastructure challenge, however, is not insurmountable.
There are examples of communities and states that have made investments
in this vital infrastructure, recognizing that overcoming the rural
differential in Internet access was necessary to successful rural
economic development. North Carolina's e-NC Authority was established
by the legislature in 2000 (originally named the Rural Internet Access
Authority) as an effort to link all rural communities in the state to
the Internet. The initiative has focused on advocacy for private sector
expansion of service into rural communities and has helped to build
dedicated telecenters to bring services into rural communities, if not
into every rural home. e-NC represents one model for state level action
to advance rural Internet access (www.e-nc.org).
Northern Minnesota provides an example of a community or regional
response to the lack of Internet access. Boreal Access is a
cooperatively-owned, non-profit Internet Service Provider established
in northeast Minnesota to provide community residents and businesses
with access to the Internet as well as a ``community commons'' for
sharing information about events and issues in the region. Boreal also
offers services to businesses that allow them to become e-commerce
capable. Over its 13 year history, the provider has built its capacity
to serve residents, first in the more populous parts of the region
(www.boreal.org).
The Rural Policy Research Institute (RUPRI) has provided input into
the rural Broadband discussion consistently in the past, including
early work on the Universal Service Fund and the work of its
Telecommunications panel. Two recent reports focus specifically on the
Broadband challenge in rural America--Rural Broadband--A RUPRI Policy
Brief (Dabson and Keller, 2008, www.rupri.org) and comments to the US
Department of Commerce and US Department of Agriculture on the American
Recovery and Reinvestment Act of 2009 Broadband initiatives prepared by
RUPRI President and CEO, Brian Dabson, in April 2009
(www.ntia.doc.gov).
Questions Submitted by Hon. William ``Bill'' Cassidy a Representative
in Congress from Louisiana
Question 1.By your testimony we hear each community is unique in
its challenges and available resources. What are the core, critical
resources necessary for small, rural communities to succeed in economic
development? Or, if resources tend to vary widely among communities,
then how can a community effectively determine its strongest resources?
Do you have a metric to predict results with a given set of resources?
Answer. There is tremendous diversity in rural America and no two
rural communities or regions bring the same set of assets to economic
development. There is no single economic development approach that will
work best in all rural places. In recent work done in partnership with
the American Farm Bureau Federation and the Kansas Farm Bureau, the
Center produced a white paper entitled 21st Century Rural Development.
In that paper, we identify five keys to success for rural communities
engaged in designing and implementing an economic development strategy,
based on our work with rural communities across the country:
Starting with the ``right'' game plan--Rural communities
need to recognize that the opportunities for doing things the way they
have done in the past, i.e., focusing on industrial recruitment and
emphasizing cheap, low cost resources, have diminished or disappeared.
Rural communities need to take an asset-based approach to development--
focusing on the resources and entrepreneurs that are located in rural
regions already. The Center (among others) have developed tools that
community and regional leaders can use to identify the assets that can
serve as the foundation for economic development
(www.energizingentrepreneurs.org).
Investing in developmentToo many rural communities try to
conduct the business of economic development with limited resources and
volunteers. To be most successful, rural communities need to invest in
their economic development capacity--staff and resources devoted to
designing and implementing a strategy for development. For example,
rural communities using the HomeTown Competitiveness framework
developed by the RUPRI Center for Rural Entrepreneurship, the Nebraska
Community Foundation and the Heartland Center for Leadership
Development, voted for local option sales taxes to raise funds
dedicated to economic development (www.htccommunity.org). These same
communities are also building community foundations to endow economic
development efforts into the future (a topic addressed in great detail
by Jeff Yost, President, Nebraska Community Foundation, at the
Subcommittee hearing on March 31, 2009.)
Taking a systems approach-- To be successful, rural
communities must recognize that economic development is a shared
responsibility. It takes the efforts of organizations and leaders in
the public, private and non-profit sectors. It requires bringing
together key players in economic development so that they can align the
work of their separate organizations with a broader vision for rural
development. The northern Minnesota region has been taking this systems
approach for some time--bringing together individual public and private
economic development organizations into a Regional Economic Development
group. This history of working together has translated into a new
initiative to create a systems approach to entrepreneurship development
in the region (www.greenstonegroup.org).
Reaching scale through regionalism and collaboration--
Scale does matter in our globally competitive economy. But, the
solution is not for rural communities to get big, but rather to partner
with neighboring communities and to reach out to regional development
organizations that can tap a broader set of resources than any one
community can tap on its own. A recent report on the outcomes of the
Kellogg Foundation's multi-year effort to support collaborative rural
entrepreneurship development systems provides some important lessons
learned about the challenges, costs, and benefits of regional
collaboration (http://fieldus.org/Publications/EDS2008.html).
Valuing heritage-- A key to successful rural development
is to embrace a new path for economic development while maintaining a
strong sense of the heritage and culture that makes rural places
unique. One of the most innovative approaches to rural development that
exemplifies this key is Regional Flavor Strategies. These regional
development efforts focus on identifying the unique ``flavor'' of a
region and creating a brand based on the unique assets in the region.
The primary resource for learning more about Regional Flavor is Natalie
Woodroofe [REDACTED].
While these keys focus on building capacity for economic
development, it is also important to recognize that rural development
is place based and, as a result, the assets and health of rural
communities and regions is important for economic success. Investing in
strong rural schools (K&12), rural community colleges, and regional
universities is an important prerequisite for economic development.
Economic development is also advanced by ensuring that rural
communities are ``healthy communities'' through appropriate investments
in health and human services. Better coordination and collaboration
across Federal agencies, such as between US Department of Agriculture
and US Department of Health and Human Services, would reflect the
multi-dimensional nature of economic development in rural America and
create greater alignment of investments that help rural communities and
regions more effectively engage in economic development.
Response from Jeff Yost, President and CEO, Nebraska Community
Foundation
Chairman McIntyre and Members of the Subcommittee:
Thank you again for the opportunity to provide testimony on March
31 re: the Nebraska Community Foundation, our HomeTown Competitiveness
(HTC) framework and the extraordinary opportunities available to
enhance and sustain rural America.
Questions Submitted by Hon. Mike McIntyre a Representative in Congress
from North Carolina
Question 1. In your testimony you mention that the Federal
government can play a role by providing technical assistance and
funding streams to empower local leaders, can you specify what types of
technical assistance and funding streams are most helpful?
Answer. We must appreciate that almost all other developed nations
(especially in Europe), whose regions are now our primary competitors
in the global marketplace, provide at least 3% of all federal funds to
support technical assistance and community asset building. This funding
ensures that local leaders are empowered with important decision
support mechanisms to increase the potential for successful outcomes
from federal investments.
The purpose of the Rural Collaborative Investment Program (RCIP) is
to help provide this type of customized technical assistance to build
local capacity. RCIP combines flexible, locally-controlled funding for
communities to work together to enhance their capacity for common
action and to achieve their desired futures.
In addition to flexible funding, it is also critical to focus on
what assistance is provided. A primary outcome should be to strengthen
community controlled, federally funded regional development
organizations (such as Rural Conservation and Development Districts,
Small Business Development Centers, Council's of Government, Economic
Development Districts, etc.). Many rural communities are too small and
have too little individual capacity to effectively access and use
external assistance. Regional development organizations can provide
coordination and facilitation to help small communities build both
economies of scale and economies of function to build greater place-
based opportunity.
Strengthening regional development organizations should occur in
two ways. First, federal funding should leverage state funding to
create super-regional organizations whereby different entities serving
the same region move towards integration and shared management and
governance. Second, efforts to build and sustain community capacity
should be robustly supported at the federal level.
Finally, if local funding streams can be built (such as community
endowments) these can be used to leverage state and federal investment
to build and sustain the locally-created, locally-driven community
economic development agenda.
Questions Submitted by Hon. K. Michael Conaway a Representative in
Congress from Texas
Question 1. More than 88 programs administered by 16 different
federal agencies target rural economic development. USDA Rural
Development administers most of these programs and is designated as the
lead federal agency. In your experience, does this divided approach
among so many agencies present additional challenges and would it be
more effective to consolidate the leadership and funding into just a
few major programs under USDA?
Answer. The federal government has many rural development programs,
but no all-encompassing vision for rural development. Why are we
allocating federal funds: Are they simply transfer payments or are they
long-term strategic investments? In most developed nations, there is a
deeply articulated rural development strategy for federal investments
in rural regions. Building such an approach provides an opportunity for
various departments to actively align investments, programs, and
evaluations.
At a minimum, better coordination of effort and investment is
critical. Most rural policy analysts, for at least two decades, have
recognized the importance of and requested establishment of a White
House Office of Rural Affairs. Or, if establishment of such an office
is not achievable, some type of interdepartmental rural coordinating
council could be established and given real authority to rationalize
the system. Such an entity, actually implemented, coupled with an
intentional effort to strengthen community owned and controlled
regional development organizations, would be a huge step forward.
Questions Submitted by Hon. Glenn Thompson a Representative in Congress
from Pennsylvania
Question 1. Mr. Yost mentioned that only a small number of young
adults do not consider returning to their hometown after college. This
very issue has been a reality in my district for many years. In your
view, what can rural areas do to provide greater economic development
in order to nurture local jobs?
Answer. With information technology and broadband available nearly
everywhere (or soon will be) in the U.S., many professionals can live
and work wherever they want. Therefore, place, and the quality of life,
amenities and culture of that place, are of paramount importance.
In most instances, new economic opportunity in rural America is not
going to occur through attraction or relocation of existing businesses
or industries. We believe that new economic opportunity in rural
America will primarily be driven by place-based entrepreneurs seeking
to balance their desire to build a business with their desire to live
in a particular community.
Therefore, rural communities and regions need to build a robust
programmatic support infrastructure to assist entrepreneurs in building
and evolving their businesses.
We believe our HomeTown Competitiveness (HTC) framework, referenced
in my testimony, clearly addresses all of the key issues in building
local capacity to allow entrepreneurs to thrive in place and allow
communities the opportunity to build out new leadership capacity,
opportunity capital and a positive self-fulfilling prophecy that will
encourage entrepreneurs to build their businesses at home.
Questions Submitted by Hon. William ``Bill'' Cassidy a Representative
in Congress from Louisiana
Question 1. By your testimony we hear each community is unique in
its challenges and available resources. What are the core, critical
resources necessary for small, rural communities to succeed in economic
development? Or, if resources tend to vary widely among communities,
then how can a community effectively determine its strongest resources?
Do you have a metric to predict results with a given set of resources?
Answer. The most important resource any community can have is a
cadre of leadership committed to the long-term health and prosperity of
everyone in their community. This cadre of leadership must be inclusive
and be continually evolving itself to remain motivated and connected to
community needs and opportunities.
NCF and HTC have several assessment tools we use to determine
readiness to engage in a range of community economic development
activities, ranging from business development services to youth
engagement to building a community foundation.
The most important actions this cadre of community leaders can take
are to identify their regional competitive advantage and build a plan
for mobilizing community assets to realize this opportunity.
Historically, regional competitive advantage was expressed solely in
terms of access to natural resources (timber, minerals, waterways,
farmland, etc.). But today, community leadership must assess all of
their assets (leadership, natural amenities, arts and culture,
entrepreneurial spirit) to determine how they can build an
interconnected community that people will want to live in.
Thank you again for the opportunity to provide testimony and to
respond to your questions.
Dr. Response from Randy Smith, President, Rural Community College
Alliance Altus, Oklahoma
Questions Submitted by Hon. Mike McIntyre a Representative in Congress
from North Carolina
Question 1. The need for greater collaboration among rural
communities is a constant theme. How do community colleges collaborate
with other educational institutions for the purposes of enhancing rural
development?
Answer. Representative McIntyre, I am pleased to report that rural
community colleges typically do an excellent job of collaboration and
partnership with other educational institutions. This includes two-year
colleges partnering with four-year universities, two-year colleges
partnering with small business development centers, and partnerships
with local chambers of commerce, technology centers, and local business
and industry. Rural community colleges realize the importance of these
partnerships to their students and to the communities they serve. It is
through these partnerships that the strengths of several organizations
are maximized for the benefit of an area's economic development.
In order to encourage these important partnerships, federal
agencies may want to consider awarding grants to partnerships and
consortiums instead of to single agencies. Community colleges should be
a part of any rural consortium that is involved in economic development
due to their important role in workforce development, expertise in
instruction, community resources and their existing connections with a
community. Federal agencies may want to consider providing incentives
for organizations that seek to collaborate.
Rural community colleges have long recognized the importance of
partnering with local hospitals and healthcare facilities in order to
effectively educate nurses and allied health care professionals. These
partnerships are a key component to successfully educating a quality
healthcare workforce. These collaborations often provide the necessary
clinical resources, equipment resources, and other means to educate and
grow the number of graduates from these important programs.
Many technical programs not only collaborate with other educational
institutions, but they organize advisory committees of local and
regional professionals who work directly in the industry. These
advisory committees provide valuable input on curriculum, trends in the
industry, and up-to-date training equipment.
The partnerships and collaboration discussed above provide a means
for rural communities to ``grow their own'' trained professionals.
Shortages of allied healthcare workers and skilled technical workers in
rural areas abound. Successful rural education programs and
partnerships as discussed above can be used to address the shortage of
a specialized workforce.
Questions Submitted by Hon. K. Michael Conaway a Representative in
Congress from Texas
Question 1. More than 88 programs administered by 16 different
federal agencies target rural economic development. USDA Rural
Development administers most of these programs and is designated as the
lead federal agency. In your experience, does this divided approach
among so many agencies present additional challenges and would it be
more effective to consolidate the leadership and funding into just a
few major programs under USDA?
Answer. Representative Conaway, thank you for your question and in
a word, the answer would be ``yes!'' Rural community colleges have
limited resources to search for, and write grants. It is difficult to
find, and be aware of, grant opportunities and it presents a challenge
when differing agencies have different requirements and may or may not
support the same goals. Administrative rules are particularly difficult
and burdensome. The bureaucracy can, at times, be daunting for colleges
with limited resources; and dedicating an employee to search for and
complete a grant application is often not feasible. Simply knowing
about the grant possibilities is often a challenge, as there are
multiple agencies that administer rural economic development grants. A
coordinated approach to ``rural'' would be a welcome change. A single
place to search for rural grants, and a streamlined application process
would allow more rural colleges to participate in the process, untimely
allowing them to more effectively serve their stakeholders. Community
colleges have business offices that can serve as fiscal agents, their
service areas are regional, and they have the necessary infrastructure
to track the use of funds and the results of the programs the funds
created.
Questions Submitted by Hon. William ``Bill'' Cassidy a Representative
in Congress from Louisiana
Question 1. By your testimony we hear each community is unique in
its challenges and available resources. What are the core, critical
resources necessary for small, rural communities to succeed in economic
development? Or, if resources tend to vary widely among communities,
then how can a community effectively determine its strongest resources?
Do you have a metric to predict results with a given set of resources?
Answer. Representative Cassidy, thank you for this important
question. You are correct that rural communities do vary widely. Often,
the core component rural communities need in order to become involved
in economic development is an office or person empowered with the
responsibility of leading and coordinating these efforts. Frequently,
this type of office is hosted and operated by the local community
college. Colleges have the infrastructure and facilities as well as a
staff that is usually already involved in the region's economic
development. Communities that do not have a rural community college can
partner with one in a neighboring community. Rural community colleges
can and will lead the effort to spur economic development in the
communities they serve. Local government agencies and businesses should
communicate and partner with the college that serves their community.
The core critical resources would be: the community college, local
government, business and industry, and the local chamber of commerce.
All of these groups should work together for the economic development
of a community. All of the partners discussed above are critical to the
success of any project. The best metric to predict results is the
consortium or partnership that was formed to address the economic
development project. Partnerships are far more effective than are
single entities. Although rural communities are very different, nearly
all will be served by a community college (even if not in the
community) and will have a chamber of commerce, as well as having local
elected representatives who are committed to economic development.
Rural community colleges can lead this effort as one of their main
missions is the support of local economic development. There is no need
to create another type of system. Collaborative groups could be
organized and empowered with some direct funding. A goal would be to
have a ``one-stop shop'' for an entire region when it comes to economic
development services. Working with each community is a necessity and it
is something that community colleges already do. New business starts,
their resultant jobs, and staying power are the things that community
colleges can track along with other metrics that predict local economic
development.
Questions Submitted by Hon. Glenn Thompson a Representative in Congress
from Pennsylvania
Question 1. Mr. Smith, you talked about how energy related jobs
could significantly contribute to rural economic development. I
couldn't agree more. Oil and gas has been the dominant economic force
in the northwestern part of my district for over 150 years. However,
large areas of my rural district have gone further into recession as
oil and gas production has declined--and I would not hesitate to blame
overregulation as one of the reasons for this decline. How do you view
the role of traditional energy sources as a way to rejuvenate rural
America?
Answer. Representative Thompson, thank you for your question on
energy. You are absolutely correct; the ``boom and bust'' phenomenon
has been, and will continue to be, an issue for rural communities.
Rural communities and their colleges have faced this issue in several
states. One thing colleges have done to deal with the ``boom and bust''
scenario is planning during the times of boom for the times of a
slowdown which will eventually occur. When the economy is strong and
employment is strong, rural communities and their colleges must prepare
for the predictable downturn, often not knowing when such a turn might
hit. This includes investing in additional or different types of
workforce and academic training programs, including renewable energy
programs. Workforce development in traditional energy production is
still a large training program at many rural community colleges and the
need for trained traditional energy workers is still great.
New energy jobs that rural community colleges should consider
preparing workers for are in renewable energy and energy efficiency.
The technology is here now and many two-year colleges across the nation
are offering programs in renewable energy. Wind energy technician
programs are being created in many areas. Rural America is where wind
farms are established. Rural America is where wind turbine
manufacturers are locating. Decentralized solar water heating and solar
technicians are growing industries that require a trained workforce.
Also, the demand for a commercial and residential energy auditing
workforce is enormous in both urban and rural areas. Several two-year
colleges are now offering programs in this specialized area as well.
As you know the need for trained workers in the traditional energy
field still exists, and rural community colleges are meeting this need
in many areas. However, rural communities and their colleges need to
consider new education programs in renewable energy as the demand for
these trained workers is high and industry experts predict that this
demand will continue well into the future.
Dr. Response from Robert J.Thompson, Executive Director Of The
Androscoggin Valley Council Of Governments
Questions Submitted by Hon. Mike McIntyre a Representative in Congress
from North Carolina
Question 1. In your testimony, you focus on the USDA Rural
Development programs, but mention other programs such as the Economic
Development Administration (EDA), Community Development Block Grants
(CDBG), and federal-state regional commissions. There is always a push
in Washington, DC not to have programs that appear to overlap in
mission and function. How does your experience reflect on the overlap
of these programs? Do they complement each other, overlap or interfere,
or meet different needs?
Answer. My experience with these programs is that they tend to be
targeted to a specific recipient base, problem or need. The programs
seldom overlap and are often very complimentary when one is
knowledgeable enough about the programs to maximize opportunity.
However, when there is the opportunity to mix and match programs
from various agencies, specific grant guidelines may rule out many
practical approaches.
For example, Community Development Block Grant (CDBG) funds may to
be used as local match for federal funds. In contrast, the CDBG Small
Cities Programs are typically state administered on a competitive basis
and funds may or may not be available to serve as required match, or as
a complimentary program to defray or eliminate costs for new or
upgraded service entrances, for eligible households, in combination
with a water system expansion or upgrade funded in part through USDA.
The real issue many rural regions face is the availability of
knowledgeable staff able to provide technical assistance to the
community or region to ensure the most suitable grant and loan options
are being pursued.
Questions Submitted by Hon. K. Michael Conaway a Representative in
Congress from Texas
Question 1. More than 88 programs administered by 16 different
federal agencies target rural economic development. USDA Rural
Development administers most of these programs and is designated as the
lead federal agency. In your experience, does this divided approach
among so many agencies present additional challenges and would it be
more effective to consolidate the leadership and funding into just a
few major programs under USDA?
Answer. My immediate reaction would be simpler is better; less
programs to keep track of, fewer variations in application and
compliance regulations. Upon further reflection, I would be concerned
that in an effort to simplify or consolidate programs we could lose
more than we have gained.
To ensure resources address a variety of challenges, needs and
opportunities, I believe we need to have some degree of targeting.
Legitimate planning at the local or regional level cannot be
appropriately carried out without some expectation of funding
availability.
A specific example is the USDA Rural Water and Wastewater Loan and
Grant program. Because the annual demand for these funds typically
exceeds available resources, project priority lists and multi-year
investment strategies are developed with the expectation that
additional funds will be available in subsequent years. Consolidated
programs may or may not preserve these individual funding streams.
It is also important to note that a consolidation or streamlining
effort at the federal level will not change the fact many rural
communities lack the staff capacity to navigate the bureaucracy of the
federal grant system. Without assistance from local and regional
technical assistance entities, such as regional development
organizations, many communities are simply unable to access rural
development funding--not matter what the program structure.
Dr. Response from Robert J.Thompson, Executive Director Of The
Androscoggin Valley Council Of Governments and Vice-Chair,
Rural Development Task Force of the national Association of
Development Organizations (NADO), Auburn, Main
Question 1. On the same subject, my district has a long history
with timber harvesting, where it remains a major job source in rural
Pennsylvania. It seems to me that we talk a lot about advancing
renewable energy, but don't do enough to push the most abundant form--
biomass. In your view, what kinds of steps can we take to increase and
encourage our use of timber for biomass?
Answer. I am a firm believer in the Forest Service and the role it
plays in providing stewardship and assistance in the management of our
forest resource base. I am also aware the parceling of this resource
deletes acreage from commercially manageable units.
The initial findings of work done in Maine indicates that meeting
the possible demand for potential forms of biomass for an alternative
energy supply would require expanded management to increase yield. We
would need to more aggressively manage current lands and bring other
lands back into active management. In addition, the Forest Service
would need to play a significant role in non-commercial landowner
assistance.
If the utilization of biomass for energy is not properly matched to
the sustainable yield and cost efficient harvesting, there could be an
unfavorable shift in the cost of supply to traditional consumers of the
forest resource. Biomass is currently part of the Maine energy plan and
it can be a more significant portion in future, but it will not replace
our need to have other energy supplies and to aggressively pursue
conservation.
Questions Submitted by Hon. William ``Bill'' Cassidy a Representative
in Congress from Louisiana
Question 1. By your testimony we hear each community is unique in
its challenges and available resources. What are the core, critical
resources necessary for small, rural communities to succeed in economic
development? Or, if resources tend to vary widely among communities,
then how can a community effectively determine its strongest resources?
Do you have a metric to predict results with a given set of resources?
Answer. The core need for most small rural communities is access to
local and regional planning and development technical assistance.
Consultants can be hired to develop plans and strategies and lead in
implementation activities, but do not replace the long term value of
having access to local and regional expertise with an established
working relationship with local decision makers.
Indigenous resources and assets do vary widely among rural
communities, but our task is to recognize those assets and effectively
utilize them to produce positive change for our communities and
regions. In my testimony I reference a new innovative asset-based rural
development strategy that the Economic Development Districts (EDDs) in
Maine are working with state and local officials, private sector
leaders and nonprofit partners. This model will identify the assets and
strengths of a region and help implement plans to leverage those
assets. Additional details can be provided upon request.
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