CHAIR'S REPORT
Agriculture & Rural Development Committee
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The 63rd Annual Meeting of the Southern Legislative Conference

August 15-19, 2009

TO: Members of the Agriculture and Rural Development Committee
FR: Delegate Bobby Orrock, Virginia
Chair, SLC Agriculture and Rural Development Committee
RE: Report of Activities of the Agriculture & Rural Development Committee at the 63rd Annual Meeting of the Southern Legislative Conference in Winston-Salem, North Carolina, August 15-19, 2009

The SLC Agriculture & Rural Development Committee convened on Saturday, August 15, for the 2009 Ag Forum on Food Safety, Sunday, August 16, for a business session, Monday, August 17, for a program session, and Tuesday, August 18, for a Technical Tour during the 63rd SLC Annual Meeting.  The following is a summary of the speaker presentations and Committee activities from each of these programs.  An attendance list is attached.

2009 Ag Forum on Food Safety, August 15
Representative Terry England, Georgia
Senator Francis Thompson, Louisiana
Michael Doyle, Ph.D., Regents Professor of Food Microbiology; Director, Center for Food Safety, University of Georgia
Steve Solomon, D.V.M., Deputy Associate Commissioner for Compliance Policy, Office of Regulatory Affairs, U.S. Food and Drug Administration, Washington, D.C.

Background

America enjoys the safest and most affordable food system in the world, but recent outbreaks of foodborne illnesses have had significant impacts both in terms of human health and on food producers.  As action on the federal level has stalled, states have responded with food safety legislation of their own.  As a new emphasis on food safety emerges, states and federal agencies are seeking new approaches to closing the holes in the system without creating undue burdens on producers or processors.

Representative England’s Remarks

Representative England began by noting that food safety gets attention immediately following an outbreak, but interest in actions to address the causes fades in the following months.  This dynamic makes it very hard to gather support and energy to move legislation or policy changes.  Georgia’s steps to act on food safety were the result of an outbreak that was revealed just as the 2009 legislative session was starting up, providing an optimal time to get support for policy changes.

With the 2009 Peanut Corporation of America (PCA) peanut recall that was blamed for at least nine deaths, the plant had been inspected once or twice annually, but after the contamination had been uncovered, it took a week to uncover all that was involved in that plant. The PCA plant also had operations in Texas that had been open for four years but had never been inspected.  After the first tainted samples were found in Minnesota, the company pulled 12 samples for inspection, which tested positive.  The company responded by testing and retesting until they got a negative result.  Clearly this was a practice that needed to be addressed.  Representative England pointed out that the PCA facility was a bad actor, but there also was a breakdown in the state inspection process.  The PCA outbreak thus brought to light a range of issues and highlighted what states could do.  But, he emphasized, there is a need to have food safety policy that is not established in reaction to outbreaks but as a result of careful consideration.

Senate Bill 80 in Georgia was sponsored by Senator Bulloch, in whose district the PCA plant was located.  Under previous law, the definition of a food processing facility was broad enough to cover corner shops and big processors.  In order to avoid including unintended operations in the move to address further processors, the state had to update and define what a food processor was, limiting the regulations to those facilities that process food that does not end up on the plate of the final consumer (United States Department of Agriculture (USDA) inspected meat plants also were exempted so as to not interfere with that inspection process).  Senate Bill 80 requires these facilities to have a Hazard Analysis and Critical Control Points (HACCP) plan or equivalent on file with the state Department of Agriculture.  The legislation also authorizes the Department of Agriculture to inspect on demand and pull records whenever the plant is in operation.  Furthermore, it compels the company to report to the state any test that is positive for contamination within 24 hours.  A House bill that was still in the Senate at the end of the session allows for sanitary inspectors (such as inspectors of restaurants) to investigate claims of violations. 

Senator Thompson’s Remarks

Senator Thompson began by noting that many states haven’t been as engaged in food safety as they should be.  Without food safety plans, states aren’t as prepared or equipped to address the problems that can arise.  It has become clear that there are not enough inspectors or oversight, a situation complicated by an antagonistic relationship between producers and the federal regulatory authorities.

Louisiana Senate Bill 93 addressed food safety while being careful to not harm business and industry in the state.  The goal was to achieve compliance with food safety standards and provide safety for the citizens while encouraging businesses to want to remain or locate in Louisiana.  The legislation was particularly mindful of not creating a burden that would fall especially hard on Louisiana’s numerous small processors.   The legislation places responsibility for inspections of processors under the Department of Health and Hospitals, who have the existing public health infrastructure, with the exception of inspections of plants inspected by the USDA, which are the purview of the state Department of Agriculture.  The legislation requires all covered processors to have a HACCP plan or its equivalent available for review.  The legislation further requires processors to report any contamination within 24 hours, with testing paid for by the company.  The idea, he added, is to make the response quick and to get information back in time to make decisions.  Finally, the legislation mandates a recall plan, which has been a hole in past food safety policies.

Louisiana’s legislation—which draws from activities in other states and is informed by actions at the federal level—passed easily in the Senate but met with concerns in the House over its impact on small businesses, as well as concerns that the state had no reason to act absent an outbreak or demonstrated deficiency.  There also was some opposition from food processing companies who felt it covered activities in which they already were engaged in addition to their desire for a federal, and not state, solution. 

The provisions of SB93 will go into effect in 2011, allowing processors and the state time to prepare.  Senator Thompson noted that he had solicited input from business groups to determine how to best implement the legislation, a process that eased the legislation’s path. 

Senator Thompson concluded that the Louisiana approach gets the companies engaged in food safety and makes them partners in protecting the food supply, while leaving open the opportunity to later come back and tighten up regulations if it seems that industries are not acting in good faith

Dr. Solomon’s Remarks

Dr. Solomon began by noting that change is coming to food safety, change that has long been needed, but only now have things come into alignment. Recent outbreaks have pushed this issue forward, including the establishment of a Food Safety Working Group by the Obama Administration that has put added emphasis to transforming food safety.  Both chambers of Congress have introduced legislation to do this, and consumer groups and industry both have come forward saying it is time for new regulation. 

He commented that any changes should move away from our current reaction-based system of inspecting plants and conducting recalls after the fact to a prevention-based approach.  It is a challenging system to try to address, he continued, with overlapping and multiple agencies and entities responsible for inspections, hundreds of thousands of processors and farms, and millions of food establishments that are all part of the food system.  Contaminatio can happen anywhere along this complex production chain. 

A food protection system, Dr. Solomon continued, focuses on both food safety—unintentional contamination—and food defense—intentional contamination.  Changes in technology, industry practices, demographics and eating patterns have changed the patterns of the spread of contaminations.  Furthermore, globalization has increased the amount of food that is imported, including finished foods, increasing the number of risk points.  Moreover, there are new contaminants—such as melamine—and new pathogens that are increasing the complexity of the problem.

Dr. Solomon noted that there is poor integration between state and federal layers of food inspection and safety.  Not all inspections are conducted at the same levels and standards everywhere, and there is no assurance that every facility is being inspected.  To close these gaps and improve the system, it has been recommended that training and information sharing among partners be emphasized.  He added that the United States needed a fully integrated food safety system built on collaboration from state and local governments, inspectors, and industry, one in which the federal government would prioritize inspections and enforcement and support states in their actions.  Such a system would send people to the right place, integrate information, bring processors back into compliance, and make sure information gets back into the system. 

In order to accomplish this, adequate standards for retail food and processing plants that will help guide the sufficiency and monitoring of state systems need to be in place.  Everyone has to have the same high level of understanding when they conduct inspections, and there must be measures to determine the effectiveness of inspectors and inspections.  Furthermore, improvements to the food safety system will build on transparency, accountability, collaboration and comprehensive coverage. 

Congress has gotten serious about the issue of food safety, he said, with legislation to amend the Food, Drug and Cosmetic Act to allow the FDA to promulgate new regulations, increase inspections, and implement mandatory recall authority, as well as provide for new resources for food safety.  Among the proposed changes is an annual registration for food processors that lets regulatory authorities know who is producing food and provides a means to revoke this registration.  The proposed legislation would require firms to do an analysis of the hazards of their food production and have in place a food safety plan that outlines what the hazards are, how they will be avoided, how surveillance will be conducted, how reporting and recalls will be managed and to provide for final product testing and traceback for contaminated items, as well as a food defense plan. 

The proposed legislation places a major emphasis on traceback, requiring stringent recordkeeping for products.  He acknowledged that this is difficult and challenging, particularly for raw agricultural commodities and overseas products and ingredients.  To ensure consistency in enforcement, he added, there will be accreditation for labs conducting tests.  The legislation also establishes mandatory recall authority for the FDA, a tool that seldom is needed (typically industry cooperates), but necessary on occasion. 

Dr. Solomon added that the proposal establishes a range of safeguards on imported foods, including requiring a unique ID and annual registration for importers of food, with provisions for revocation.  The legislation would allow a ban on the importation of products upon which importers either delay or block inspection.  Inspections of importers would be based on the relative risk, with greater frequency for those products that carry the highest risk.  Dr. Solomon further explained that the current proposals eliminate problems with confidentiality that have at times gotten in the way of sharing information with state counterparts. 

He concluded that a reformed food safety system would have a better mechanism of tracing products, higher quality expectations for inspectors and testing facilities and a greater ability to share information.  He predicted that a bill will pass Congress with comprehensive changes.  While some states will adopt these changes automatically, some states will have to determine how they can join in an integrated food safety system. 

Dr. Doyle’s Presentation

Dr. Doyle noted that the current food safety system is several decades old and in need of updating.  He acknowledged that the surveillance system is superior to what it had been previously, but still has room for improvement.  To illustrate this, he noted the vagaries of the PulseNet system, which works with local and state health departments to identify food safety problems by isolating cultures from patients and forwarding the data to the Centers for Disease Control and Prevention.  The system helps to find about 1,200 outbreaks annually, for which the food source is found in less than half the cases.  Not all states are equally committed to this system, however, which results in wide discrepancies in reporting and, thus, surveillance.  While resources are limited, increasing state participation in this system would create a more robust system, he noted. 

Dr. Doyle added that the United States Food and Drug Administration (FDA) is increasingly delegating food inspections to states.  There is a wide variety in the skill and knowledge of the inspectors, leading to varying levels of competency and adequacy in the inspections, as well as in follow up when deficiencies and contamination are identified.  Furthermore, inspections do not always account for varieties of hazards, taking a one-size fits all approach, with insufficient sharing of information between FDA and the local health department.  He added that there is a need to verify the competence of inspectors and to have standardized inspections between federal and state systems. 

Many food companies use third party auditors to determine compliance of suppliers, Dr. Doyle noted, but auditors may not be knowledgeable or adequately trained for the type of plant they are inspecting.  Furthermore, their independence is debatable, as they are paid by the company requesting the audit.  Moreover, audits are often announced in advance, allowing plants to prepare for an inspection rather than be reflective of daily operations.  Auditors also rely on testing labs that are not required to be certified, have a range of competency and capabilities, and utilize sampling protocols that vary in credibility.

Dr. Doyle added that the exponential rise in imported food over the past decade has led to the United States being, since 2004, a net importer of food, excluding feed and non-food agricultural products. This situation has increased risks for a number of reasons, including overseas production systems that are not necessarily at the same level of safety as domestic processors, the introduction of new pathogens to the U.S. market, and unsanitary harvesting practices, especially the presence of infected children with parents, increasing the range of points of exposure.  Finally, with seafood, it is common practice in parts of our source countries to use untreated sewage to feed the farm-raised fish and shrimp, and with livestock production overseas, use of antibiotics in animals is leading to increased resistance to antibiotics among pathogens. 

Foreign food producers are not held to the same standards as domestic producers, he continued.  As India and China get more involved in further processing, the problems these countries have with adulteration and contamination continue to be an issue.  FDA, which has jurisdiction over 80 percent of the food supply, typically does not get involved until food reaches the border, although there is some effort being made to inspect the source. 

The use of secondary suppliers in food processing also leads to variability in oversight, Dr. Doyle added, including a high degree of uncertainty with the safety of ingredients, especially from developing countries, compounded by the problem that many companies do not test their finished products to verify safety. 

Dr. Doyle concluded by noting that the U.S. food safety system is weak because of a minimal commitment to a foodborne disease surveillance system by several states and a food inspection system at the federal and state levels that has major deficiencies.  He noted that third-party audits are highly variable in quality and credibility, as are contract laboratories, and that not all food companies are equally committed to food safety and (for FDA-regulated plants) may receive minimal regulatory oversight until an adverse event occurs.  Finally, the philosophy and statutes for the FDA presume that food is considered safe unless proven otherwise, largely by an adverse event (such as an outbreak of foodborne illness), which places the system on a reactive, and not preventative, footing. 

Business Session, Sunday, August 16
I.          Farmland Preservation
Edgar Miller, Government Relations Director, Conservation Trust of North Carolina
Joshua M. Duke, Ph.D., Professor of Food and Resource Economics, Legal Studies, and Economics, Department of Food and Resource Economics, University of Delaware

Background

While farmland preservation activities have been underway in many parts of the country for decades, recent economic events and ongoing development pressure have put into sharp focus the importance of well-designed, well-thought out programs.  A changing economy and shifting land-use patterns have transformed the discussion of how to best preserve farmland and what considerations should inform farmland preservation policy.

Mr. Miller’s Presentation

By 2030, Mr. Miller noted, North Carolina is projected to witness an increase in population equivalent to the current population of South Carolina, population growth that will put added conversion pressure on farmland.  Because rural industry and agriculture are very important to the state’s economy, preserving farmland is of great significance across the state.  Unfortunately, he added, North Carolina also is at the forefront of farmland loss.

North Carolina has several natural resource trust funds and incentive programs for farmland preservation, each of which has a specific purpose, and many of which are suffering from the recent economic downturn.  North Carolina’s farmland preservation statute dates back to 1986, making it one of the first in the country, but it was not funded until 1998, when the state made an initial $2.6 million investment spread over five years, resulting in the preservation of 4,400 acres. 

The state revised its farmland preservation statute in 2005 to include agricultural development and term easements, emphasizing a focus on preserving working lands.  The 2005 amendments also established a 19-member trust fund advisory board, provided for farmland protection plans and enhanced voluntary agricultural districts, which gives farmers some protections from nuisance lawsuits.  One of the most important changes, he observed, was the creation of a program for conservation agreements (or term easements) that are not in perpetuity, but run for a period of time, an option that was not previously available under state law. 

In 2007 North Carolina ranked first in the country for farm and farmland loss, with over 1,000 farms and 600,000 acres lost between 2002-2007.  In response, the state appropriated $14 million between 2007 and 2009 to preserve farmland—which was leveraged with private and federal funds to protect more than 5,700 acres— alongside $2 million in agricultural development projects to support the state’s rural agricultural  infrastructure.

The North Carolina program focuses on the preservation of family farms, Mr. Miller continued, so the program principally supports active agricultural land, with some support for forest land as well.  In order to make the best use of the limited funds available, the state works on agricultural viability and mapping to determine where to invest so funds are not used to preserve land that quickly will be surrounded by development and disconnected from an agricultural community. 

Mr. Miller observed that farmland preservation was the only non-recurring expense to not get cut in the state budget this past year, demonstrating the strength of the support for the program, support that is very bipartisan in the General Assembly. The farmland preservation community has benefited from the legislative leadership and a broad coalition of organizations in the state supporting the program, including (because of the 2005 amendments and the shift of focus to agricultural development) the mainstream agriculture community.  The program is a success further because it recognizes regional differences in the state and works with landowners to determine the best kind of protection in their area.

North Carolina continues to establish conventional conservation easements, although as the budget has declined, focus has shifted to donated lands and away from the purchase of development rights.  The Conservation Trust has permanently protected 5,750 acres of farmland in 28 working farms with $6.9 million in state investment and considerably more leveraged funds. 

Term easements, which the Conservation Trust did not initially support but which had the strong support of the state department of agriculture, have not been widely applied.  This is due in part, he noted, because there is no federal match for such easements.  If term easements end up giving agricultural communities some time to preserve their agriculture overall, then these short term leases will have had been ultimately successful, he added.  Such short term arrangements can also help to ensure that resources are not spent on preservation activities for farms that end up being isolated islands of agriculture in developed areas. 

Finally, he concluded, with agricultural development, the Conservation Trust has $2 million invested (and more than that amount leveraged) to support agricultural infrastructure and viability.  This funding is spread out among 11 projects, including farmers markets, local food markets, apple and watermelon handling facilities, livestock handling facilities, regional processing facilities, and regional kitchens, to help make agriculture profitable for producers, which is the surest way to preserve farmland.

Dr. Duke’s Presentation

Dr. Duke began his remarks by noting that farmland conservation is not entirely straightforward.  While land is converted to other uses, generally permanently, marginal land is at times brought into production when commodity prices rise. Thus the question that needs to be asked regarding farmland preservation is do we want to maximize land enrollment in farmland preservation or do we want to focus on specific areas and decide which are the “best farms” to preserve.

From an economist’s perspective, some land conversions (from agriculture to non-agricultural uses) are less desirable than others, he noted.  Land conversions that do not bear the full cost of community services or diminish public goods supplied by farms (such as amenities or environmental services) are less socially advantageous.  He added that preserving farmland generally provides four benefits to a community:  food security, local economic benefits of a viable agricultural economy, provision of open space and environmental amenities, and efficient, orderly and fiscally sound urban development. 

At the policy level, there are a variety of approaches currently taken to preserve farmland, including differential tax assessment, agricultural zoning and the purchase of agricultural conservation easements.  The earliest farmland prevention programs were essentially regulatory programs with very small budgetary costs that principally limited the kinds of land use.  Later programs developed incentive-based programs such as tax credits that have a fiscal cost due to lost tax revenue.  More participatory programs, such as purchase of development rights and land purchases, can have large fiscal costs. What is emerging today are hybrid programs that provide for a blend of approaches, including eminent domain with a right of first refusal to the trust agency, transfers of development rights, and land values as a pension plan. Dr. Duke noted that the regulatory and participatory techniques essentially are in conflict insofar as participatory programs ask a landowner to give up their right in exchange for a payment, but regulatory programs just take the right.

In the South, only five states (Kentucky, Maryland, North Carolina, South Carolina and Virginia) use purchase of agricultural conservation easements (PACE) programs, and only Maryland has protected significant acreage with them.  The absence of thriving programs in the region does not mean that there are not excellent models to follow. 

Dr. Duke observed that, in general, PACE programs are popular because they are permanent, voluntary and keep the land in the hands of the operator.  On the other hand, PACE programs may not pick the best land to protect and can be very expensive.  In Delaware, with a developed program, preservation is tilted toward large farms, which shifts enrollment away from urban fringe areas (where farms tend to be smaller).  An interesting component of the Delaware program, however, is that it protects farms with full-time operators far above the statewide average, which translates into an increase in preservation of viable farm businesses.

The top reasons the public wants to see farmland protected are to provide locally grown food and keep farming as a way of life, he continued.  Other reasons cited by the public include water quality, scenic quality, preserving rural character, slowing development, wildlife habitat and a desire for green space.  Support for farmland preservation increases with income, educational attainment, and population growth in an area, and as farmland becomes scarce. 

If government is going to pay, Dr. Duke asked, then are the benefits greater than the costs?  For preserving one acre of farmland in his home state, the benefits to the public are estimated to be $54,691 for cropland with no public access.  Forest and nursery lands with some public access can have values as high as $131,881 an acre.  Economists look at this and note that not all parcels are equal, which is a call to prioritize purchases to those that return the best benefits, he explained, as well as land that has the greatest risk of conversion. 

The policy coming out on top, Dr. Duke concluded, is a right of first refusal, allowing the farmer to sign a contract that allows the state to buy farmland that is being sold to a developer when it is in danger of being converted.  Essentially, this allows a state to match an offer from a developer instead of purchasing land or development rights outright that may never have been in danger.  Participation in such a program could be a condition for receiving benefits under a differential tax assessment program or an agricultural district. Such a program allows the state to purchase a farm at a critical juncture, use the PACE program to permanently sever the development right and then sell the farm back to a farmer at a lower cost. 

II.        Election of Officers

Representative Gene Maddox, Georgia, gave the report of the Nominating Committee.  Delegate Bobby Orrock, Virginia, was nominated for chair of the Committee, and Representative Terry England, Georgia, was nominated for vice chair of the Committee.  The nominations were moved and seconded, and Delegate Orrock and Representative England were elected by acclamation.

Program Session, Monday, August 17
I.          Bridging the Rural-Urban Divide
Jason Gray, Director of Rural Research and Innovation, North Carolina Rural Center
John Molinaro, Assistant Director, Community Strategies Group, The Aspen Institute, Washington, D.C.
Ken Stauber, President and CEO, Danville Area Foundation, Virginia

Background

Rural and urban communities often are seen as opposites, with contrary perspectives and interests in almost every major policy and social issue.  The rise of suburban areas and the increasing political dominance of major metropolitan areas often are seen as a problem for rural places.  In times of dwindling resources and options, finding common ground between rural and urban communities, and finding solutions that support the needs of both instead of pitting one against the other, is of great importance.

Mr. Molinaro’s and Mr. Gray’s remarks

In 2005, Mr. Molinaro began, The Aspen Institute, through support of The California Endowment, pulled together key thinkers about the future of American communities.  The result was a report published in 2008, Our Shared Fate, which identified seven key policy areas where urban and rural agendas have common cause: the persistence of poverty, economic restructuring, public education, healthcare, immigration, political voice and civic capacity for poor communities, environmental health and Smart Growth.

Mr. Molinaro noted that the prevailing assumptions about what constitutes rural and urban places are 50 years out of date and no longer apply.  Traditional concepts of rural and urban were designated by the federal government decades ago and have remained largely unchanged even as Americans’ lives have changed radically.  For example, there is a perception that big cities and rural places and the people who live there are distinct.  These distinctions are being lost, however, and this offers some opportunities and challenges.  Increasingly the United States is a metropolitan country, with 53 percent of Americans living in a county with a population of more than 1 million people, and 82.6 percent of the population living in a metro county.  The western United States, which often is thought of as rural and wide open, is even more concentrated into metro areas than the nation as a whole. 

Mr. Gray added to Mr. Molinaro’s remarks by explaining that rural people are not always where we think they are. Because the Office of Management and Budget (one of three federal agencies that defines rurality—the others are the Census Bureau and the USDA) defines an area by where the labor force works, slightly over half of the rural population in the United States live in a “metropolitan” county.  The presence of large numbers of rural residents (as defined by the USDA) who are part of a metropolitan “laborshed” demonstrates how integrated rural and urban populations are.  Using density to define the nature of a place, rather than labor dynamics, gives a much clearer picture of whether a place is rural.  Furthermore, if a great amount of the rural population is not considered to be inside metropolitan boundaries by statistical definitions, then what is then called rural really only includes the most remote populations.  He noted that much of rural America is really small town America.  Of the 55 million people in non-metro America, almost 20 million, or 36 percent, live in towns with populations of between 2,500 and 50,000.  

Both inner city neighborhoods and small town America are deeply engaged in recreating or preserving quality places that can prosper, and be places that one’s children would want to live in or return to.  Rural places and urban places both are trying to figure out how to differentiate themselves, develop what is beneficial in them, build on their strengths and remain distinctive so as to remain viable.  The challenge is to recognize the assets of rural and urban places and then connect them with their identities and economies. Mr. Gray continued that there are many opportunities to make connections between rural and urban communities on shared interests as well as shared challenges, even if the language used to describe them is different. 

Mr. Molinaro noted that in many ways the populations of rural and urban places are not just similar people, but the same people at different stages in their lives, with rural residents moving to cities for jobs and then returning to rural places later in life.  He added that economic restructuring is shifting jobs and wealth from urban and rural areas toward the suburbs and overseas.  Changing patterns of growth, decline and change from immigration, migration, regional development and gentrification have combined with this restructuring to result in similar patterns of economic dislocation, community degradation, and economic and political disadvantage for both rural and urban areas compared to suburban communities.  

Mr. Molinaro indicated that there is a systematic interdependence between rural and urban populations in social, political, and economic terms.  Rural and urban areas equally share linked systems including natural resources (particularly water and energy), land use and development policies, transportation policy, and education funding.  Strategic alliances between rural and urban people to counter concentrated suburban influence in state policy-making and promote equitable allocation of resources are critical.  Such alliances must operate at a regional scale.  Many parts of local economies—employment, transportation, development, resource allocation—now work best on a regional scale.  Rural-urban alliances can really add value at a regional level by addressing issues more effectively than when communities try to act independently.

Mr. Molinaro outlined the five most critical strategies for rural-urban alignment.  The first is to redefine rural-urban-suburban into meaningful regions instead of county-based numbers.  The second is to develop new champions and nontraditional leadership and ensure there is a systematic way to train leaders to press the issues for rural America.  As power shifts to suburbs, the absence of new rural leaders will be sorely felt, he warned.  Third, build on rural-urban partnerships that work and share models that validate the power of rural-urban partnerships.  Fourth, build a rural-urban advocacy agenda around a shared interest such as schools, infrastructure, or support for mutually beneficial community development and housing programs.  Finally, test and disseminate the power of the rural-urban framework by developing deliberate strategies to reach out to advocates and practitioners and support their work.  As a final thought, he observed that there are two major drivers for change in the 21st century:  energy and the environment.  Every solution to our Energy & Environment challenges revolves around the intersection of rural and urban interests. Rural and urban people must learn to work together or the consequences for the country will be considerable.

Mr. Stauber’s remarks

Mr. Stauber explained that Danville, Virginia, historically had an economy built on textiles, tobacco and agriculture.  As has happened in community after community across the South, Danville became a mill town without a mill, in essence, as the backbone of the local economy slowly declined.  The Danville Foundation was created by the sale of a local hospital, which created a foundation with $160 million to help create a new economy and a new culture for the region.

Part of this new culture was breaking down old barriers to operate more effectively as a region.  A fruit of this effort was the first North American manufacturing plant for furniture retailer Ikea, which located in Danville as a result of a city-county cooperation on development.  In the wake of this, Danville has been able to attract a Polish supplier to Ikea as well.  The community also is focused on being a nursery for enterprises rather than an incubator, providing space to start-ups that are unable to set up in North Carolina’s Research Triangle Park due to costs, but who want access to the talent and resources that the area provides, including some advanced vehicular research center work that now is being done in the region. 

Danville is in the middle of the new economy, the old economy and no economy.  Communities have to ask themselves if they should try to protect old competitive advantages (the old economy) or work to establish new competitive advantages (the new economy), or simply give up (the no economy).  The old economy—focused on agriculture and manufacturing—has the political power, but only 6.4 percent of the people in rural America are employed in agriculture, and manufacturing continues to decline as well.  The new economy is harder to see and requires a re-envisioning of the identity of the region and the economy, probably more than once, he added.  Many of the institutions in rural places are designed to help the old economy rather than the new economy, which makes investing in a different way an act of political courage.

As communities go about their development goals, Mr. Stauber recommended that they ask three questions:  are living-wage jobs being created; what is happening to the population between 25 and 65 years of age; and how are the children doing compared to their peers in other parts of the state.  He noted that only by creating jobs that pay enough to support a family can an area grow, providing incentives and opportunities for people in the most productive middle years to remain and prosper.  By keeping that segment of the population (the 25 to 65 year-olds), the community can build its entrepreneurial and leadership class, but in order to keep this group, there must be opportunities for them to be leaders. 

He added that regions should try to recruit companies that create jobs that will spin off entrepreneurs that will build the local economy, such as companies that hire a high degree of technical professionals and engineers, so that even if the company closes or reduces operations, the workers are capable of starting their own companies in place.  He also encouraged communities to push for equal access, particularly with respect to telecommunications and workforce development, because those without equal access are already out of the loop. 

From a policy standpoint, Mr. Stauber recommended a design shift for grant programs to reward cooperation and collaboration, which often requires statutory changes.  Most systems for grants reward competitiveness between jurisdictions and virtually all pit counties against cities.  Rural cities and counties cannot compete with suburban areas without cooperation, therefore it is necessary to incentivize cooperation, which may, in time, help suburban communities see they need to cooperate with rural areas as well.

A lingering problem for rural America is the lack of philanthropic leadership.  The dominant foundations active in rural development have either pulled back or left the field entirely.  The vast majority of rural work is being done by individual local foundations which lack focus at the national level, and major foundations with national reach tend to gravitate toward urban areas because programming there tends to offer the “biggest bang for the buck.”  In the South in particular, there is a huge variance in the role and strength of foundations working on rural issues.  Philanthropic giving for rural development is uneven across the region, and many states lack even statewide philanthropic leadership. 

Mr. Stauber concluded by highlighting community foundations, the fastest growing philanthropic activity in rural America.  These are pools of wealth from a community that are used to benefit the community by establishing a source of locally controlled capital that is available to direct local development.  Some states have incentivized the creation of these foundations, he added, which helps them become established and flourish. 

II.        Southern Legislative Conference 64th Annual Meeting, Charleston, South Carolina

The SLC will meet for the 64th Annual Meeting in Charleston, South Carolina, July 31 - August 4, 2010.  In keeping with the wishes of the SLC presiding officers, please note that meeting notification does not authorize travel.

SLC Staff Contact

If you have any questions regarding this report or the 2009 SLC Annual Meeting, please contact Jonathan R. Watts Hull in the Atlanta office at (404) 633-1866 or jhull@csg.org.


Attendance List
Southern Legislative Conference 63rd Annual Meeting
Agriculture and Rural Development Committee
August 15-19, 2009
Winston-Salem, North Carolina

(List reflects those attendees whose names appeared on the sign-in sheet)


Alabama
Representative Rod Scott

Arkansas
Senator Barbara Horn
Representative Mary L. Slinkard

Florida
Representative Charles S. Chesnut IV
Eric Sherman, U.S. Department of Defense

Georgia
Representative Elly Dobbs
Representative Terry England
Ken Fern, Jr., Southern Legislative Conference
Susan Gibson, Department of Defense
Representative Gene Maddox
Heather Moody, Senate Research Office

Kentucky
Senator Denise Harper Angel
Senator Joey Pendleton
Senator Jerry P. Rhoads
Representative Eddie Ballard
Representative Tom Burch
Representative Dwight Butler
Representative Jim DeCesare
Representative Jimmy Higdon
Representative Lonnie Napier
Representative Wilson Stone
Biff Baker, Legislative Research Commission
Leslie Caudill, General Assembly
Yolanda Costner, House Majority Whip's Office
Jon Grate, Legislative Research Commission
Laura Knoth, Kentucky Farm Bureau
Kentucky, cont.
Alisha Miller, Legislative Research Commission
John V. Ryan, Legislative Research Commission

Louisiana
Senator Gerald Long
Senator Francis Thompson
Representative Jean Doerge
Representative Jim Fannin
Representative Karen St. Germain
George Guidry, Georgia-Pacific Corporation

Mississippi
Senator E. Vincent Davis
Representative Donnie Bell
Representative David Gibbs
Representative Sara R. Thomas
Representative Greg Ward

North Carolina
Speaker Joe Hackney
Representative Kelly Alexander
Representative Lucy Jo Allen
Representative Van Braxton
Representative Pryor Gibson
Representative David Lewis
Representative Ruth Samuelson
Fran Daniel, The Winston-Salem Journal
Jennifer Gardner, Food Lion
Denise Hallett, SNC-Vulcan
Paul Meyer, North Carolina League of Municipalities
Fran Valuzzo, Dell

Oklahoma
Representative John Auffet
Representative Brian Renegar, D.V.M.
Pennsylvania
Jerry Spegman, Robert Wood Johnson Foundation

South Carolina
Representative Mike Forrester
Representative Patsy G. Knight
Representative Phillip Lowe
Representative Joey McCracken
Representative C. David Umphlett, Jr.

Texas
Joe Morris, Office of Senator Jeff Wentworth
Catherine Wright-Steele, Department of Agriculture

Tennessee
Senator Tim Barnes

Virginia
Senator Emmett Hanger, Jr.
Senator Wiliam Roscoe Reynolds
Senator Frank Ruff
Delegate Bobby Orrock

West Virginia
Delegate Allen V. Evans
Delegate Mike Ferro
Delegate Richard J. Iaquinta

Washington, D.C.
Roy Norton, Canadian Embassy
Mike Smith, The Council of State Governments

Canada
Member of Parliament Wayne Easter, Prince Edward Island
June Dewetering, Canada-U.S. Interparliamentary Group, Ottawa