Paths to a stronger rural economy

RURAL America is seeing much of its traditional livelihood contracting and its markets drying up. But across the country, new ideas are beginning to take root. For J. E. (Tex) Gates, it's computerizing the chicken house.

Since he couldn't afford modernizing, Mr. Gates got an insurance company to build the computerized operation and lease it to him. He plans eventually to buy it from them. ``It's a real future for a young person,'' he says, standing amid 22,000 bantering birds on the farm he runs with his son.

In Hibbing, Minn., it's selling chopsticks to Japan. Battered by the downturn in taconite mining, the community attracted an entrepreneur who built a $5.3 million chopsticks plant, which begins production this month. Six billion chopsticks have been presold to Japan for the next five years.

In Louisiana, it's tanning alligator hides. Instead of Louisianans shipping 21,000 untreated hides a year to Italy and France, state agriculture officials are trying to lure two Italian tanneries to the Louisiana swamps.

Faced with economic contraction, American communities that make their living from the land are shifting gears. Instead of shipping out raw materials, they are looking for new products to make and new places to sell them. The common thread: the discovery of a new niche in America and the world economy. ``It would be a depression if we didn't have solutions,'' sums up Mayor Richard A. Nordvald of Hibbing, which is pinched by the mining woes in Minnesota's Iron Range.

The question now facing US policymakers: Are these grassroots responses enough?

Arkansas may provide some clues. Once one of the poorest states in the United States, and still among its most rural (half of its people live in communities of 2,500 or less), Arkansas has diversified its farming base, developed tourism, and become a major destination for retiring Americans. After Florida, it now has the highest percentage of people over age 60.

That influx of senior citizens often revitalizes rural areas. ``We've never lost a school finance vote since Bella Vista came in,'' says Burton Stacy, president of the Bank of Bentonville. Bella Vista Village, a retirement community outside Bentonville, has 8,000 year-round residents. ``Those people believe in quality education, and that has long-term significance for our area.''

``Many of our residents get bored with retirement after a while, and end up tinkering in business or volunteering with local services or the schools,'' says Body Billingsley, Bella Vista's project director. That, he notes, also helps nearby towns attract new enterprises. ``That's part of what's moved this area up from one of the poorest in the state to the fastest growing.''

The state is also working to maintain and strengthen its diversity in agriculture. Farmers in the more depressed eastern part of the state, where traditional row crops are grown, are being encouraged to grow crops that can be used as chicken feed by the state's booming poultry producers. Some rice farmers, suffering from poor rice prices, have built ponds to grow catfish, another growing market as the nation consumes more fish and white meat (such a poultry).

There are indications that the business community is beginning to recognize its stake in a healthy rural economy. One of the most promising examples is Wal-Mart Stores' ``Buy American'' program. The Arkansas-based discount retailer, second in national sales to K mart, has pledged to buy US products whenever possible, in some cases giving domestic manufacturers more lead time in filling orders, or even shaving its own profit margins if it means replacing a foreign product with a domestically made equivalent.

The program was ``not designed with rural America in mind,'' says Wal-Mart spokesman Jim von Gremp, but many of the manufacturers the company has worked with are rural. The chain has replaced foreign-made flannel shirts with ones made in Brinkley, Ark.; foreign-manufactured file cabinets with equivalents from Fort Smith, Ark.; and foreign portable fans with some made in Franklin, Tenn.

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