When Mike Korth was growing up in Randolph, Neb., students filled the schools, clothing stores and other businesses lined Main Street and three car dealerships flourished.
Today, the car dealers are gone, Main Street is largely boarded up and there are only about 15 students in the lower school grades. Those residents who remain drive to North Fork, or even farther away, to shop, but many of the younger people are moving on in search of better opportunities.
“I don't think anyone can comprehend the decay in rural America when people move off the farms,” says Korth, who began farming with his father 28 years ago. “There's no youth left in my area. What our school enrollment will look like in eight or 10 years is scary. A lot of towns feel that when their school closes, the town really dies.”
Across America's heartland, rural communities are disappearing, the victims of ruined economies and aging populations. Indeed, many members of Congress cited the sagging rural economy as an important reason to reauthorize the farm bill.
“There really is a crisis in rural America,” said Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, urging his colleagues to approve massive increases in farm subsidies.
But many economists, as well as rural leaders and even some farmers, say that instead of providing farms with billions of dollars in subsidies, Congress should pursue a broad-based rural-development strategy that would encourage entrepreneurship and emphasize improved education and health care.
“What we have now is a program that I would argue is bad rural-development policy,” says Karl Stauber, president of the St. Paul, Minn.-based Northwest Area Foundation, which fights rural poverty in an eight-state region. “Ideally, this would be a time to reposition those billions of dollars that are being spent to directly benefit [only] 2 percent of rural Americans in ways that would do fundamental good for rural communities as a whole.”
Although poverty is often associated with inner cities, farming regions actually rank among the most impoverished in the nation. Chuck Hassebrook, director of the Center for Rural Affairs, in Walthill, Neb., notes that Nebraska and the Dakotas account for more than half the nation's poorest 20 counties. Small towns that once revolved around a church, a school and a few stores have become virtual ghost towns, as family farms have dwindled and merchants have set out in search of better business opportunities.
Hassebrook partly blames Congress for the decline in rural America because it steers most subsidy payments to large farms, enabling them to bid up land prices and outcompete their smaller neighbors, ultimately driving them out of business.
“When there were four families living on every square mile, it certainly benefited these communities,” says Mark Leonard, a small farmer in western Iowa. “Now, there's probably less than one family per square mile.”
Then there's Stuttgart, Ark., (pop. 10,000) known as the rice capital of America. Even though the Stuttgart area has received a higher concentration of farm subsidies than anyplace else — Riceland Foods, Tyler Farms and Producers Rice Mill received $105.9 million in subsidies in the last six years — it ranks near the bottom in the nation for such health and economic indicators as infant mortality, housing starts, bank deposits and nutrition.
Part of the reason for Stuttgart's poverty may be that the largest 1 percent of farmers and farm groups in the Mississippi Delta region capture 26 percent of crop subsidies, whereas the bottom 80 percent receives only 9 percent. As a result, relatively few area farmers can afford to provide much of a boost to the local economy — which some say is setting off a chain reaction that is destroying the middle class.
“'It is not only our farmers who are suffering as a result of failed government policy,'' said Sen. Blanche Lincoln, D-Ark., who grew up in the area and herself receives subsidies for her interest in a large family-farming operation. “The institutions of small-town and rural America — local banks and merchants, feed and supply stores, equipment dealers, even corner groceries and family-owned hardware stores — are all caught in the web of financial collapse.”
Lawmakers for years have debated ways to help rural communities, and past farm bills have provided various types of economic assistance. The 1996 farm bill, for example, established the Fund for Rural America, which authorizes $100 million for such initiatives as small-business loans and housing and public works projects.
But Stauber believes Congress can do far more. Instead of passing a farm bill with a so-called title, or subsection, offering aid for rural development, he believes lawmakers should take the opposite approach: pass a broad rural-development bill with only a small amount for farmers. After all, he argues, farmers actually represent only a small minority of rural residents.
“As long as subsidies absorb a vast majority of resources available to rural communities, it's a zero-sum game,” he says. “If the money is going to the 10 percent of families on farms, it's not going to benefit the other 90 percent of rural people.”
To make matters worse, Stauber worries that rural communities have an unhealthy reliance on farm subsidies. “The more dependent a community is on commodity payments,” he says, “the further they fall behind on non-agricultural development.”
Reflecting a growing trend in rural America, the local farm-equipment store in Chadron, Neb., recently closed. According to economists, the collapse of farm-dependent businesses contributes to economic decay in rural communities. (AP Photo/Nati Harnik)
Even though the issue of farm subsidies often becomes embroiled in debates over the rural economy, many rural areas are actually more dependent on other forms of government assistance. Recent studies, for example, have concluded that more than two-thirds of rural counties receive more Social Security money than farm subsidies, and 40 percent receive more assistance in the form of food stamps and other federal programs.
“Traditional commodity support and farming-oriented development programs play an increasingly limited role in improving the prosperity of rural Americans,” a recent Agriculture Department report stated.
Government payments have helped Korth stay in business, but he has mixed feelings about them. Economic pressure has forced him to expand his farm from 350 acres to more than 1,200, growing corn, soybeans and alfalfa, and raising cattle. “The only way to stay in business is to keep getting bigger,” he says. “I would rather see more people my [original] size. The big farms are making money, but you have less and less people living here.”
Nevertheless, Korth and other veteran farmers say they won't leave. Leonard says he is frustrated because local grocery, clothing and hardware stores all have closed, and “you can't even buy a pair of shoes in the county anymore.” But he adds, “I like western Iowa, and that's where I'm going to stay.”