DES MOINES, Iowa, May 18, 2005 (PRIMEZONE) -- Rural America needs to rediscover its economic value and use it to build a new economy, according to a study just released by the Federal Home Loan Bank of Des Moines.
Conducted for the Bank by SRI International's Center for Science, Technology, and Economic Development, the wide-ranging study found that the focus, both in rural America and in Washington, is generally on problems rather than solutions.
The study further revealed that the rural economy has become much more diverse than agriculture, while policy and funding have not kept pace.
The study is unique in that SRI reviewed thousands of pages of existing data, reports, and papers on rural America; studied an array of federal programs and policies, and organized the information into a forward looking report for the advancement of rural America.
Authors of the study suggest there must be a shift in focus to assets and opportunities for rural America to reclaim its prosperity.
The study also identifies policy and program steps that can be taken to enable economic growth in rural areas of the nation. These include reducing duplication and consolidation of programs to make them easier to find and use; greater flexibility in terms of assistance and timeframes, and co-investment by rural communities, businesses, and institutions.
"It is time for a fresh start in formulating strategies to strengthen rural America," said Pat Conway, president of the Federal Home Loan Bank of Des Moines. "As the Home Loan Bank that serves hundreds of Main Street banks in small towns, it is important that we support and stimulate economic growth in rural America. The study can serve as a framework to develop new strategies."
Competitiveness in Rural America
A look at competitiveness in rural America is useful to determine strengths to build on. In the study, SRI uses its Competitiveness Web Model to demonstrate overall economic competitiveness in the Bank's five states - Iowa, Minnesota, Missouri, North Dakota, and South Dakota.
Minnesota is a highly competitive state according to the model, ranking fourth in the nation in competitiveness and highest among the Bank's states. The state is noteworthy for its strengths in quality of life and innovation.
The study places Missouri and Iowa in the middle of all states for competitiveness - both have strengths in quality of life and people resources. North Dakota and South Dakota fall just below average in competitiveness among the states with quality of life and low business costs in their favor.
On the whole, rural America has several assets on which to build. These include steadily improving education achievement, low cost of doing business, high quality of life, and increasingly high levels of entrepreneurship and small business development.
Among liabilities faced by rural areas are declining population, difficulty retaining educated residents, and lack of employment opportunities, particularly in growing economic sectors.
Federal Support for Rural America
While rural America is moving toward a more diverse economy and agriculture is declining in its share of that economy, the study shows the bulk of federal support remains primarily in direct subsidies to agriculture.
More than a quarter (30%) of the U.S. Department of Agriculture's 2003 budget was allocated to agricultural subsidies. Rural development accounted for 3.5% of the budget.
The study illustrates a need to review federal programs for rural America. A comprehensive chart of rural programs and funding identifies 337 "key" federal programs and a total of 1,399 programs in 20 federal agencies targeted to rural America.
The study found that the programs are fragmented among many departments and agencies, offer little flexibility to accommodate different circumstances among communities, and make accessing resources difficult.
For more information and to order a copy of the study, contact Angie Richards at 800.544.3452, ext. 1014 or arichards@fhlbdm.com.
The Federal Home Loan Bank of Des Moines is $50 billion wholesale bank with more than 1,200 members which include commercial banks, saving institutions, credit unions and insurance companies. The Bank is owned by its members and receives no taxpayer funding. The Des Moines-based Bank serves Iowa, Minnesota, Missouri, North Dakota, South Dakota, and is one of 12 regional banks that make up the Federal Home Loan Bank System.