Outlook for Rural America

SOME rural communities have sprung back from the farm depression and droughts of the '80s. But many parts of the American countryside continue to have problems, with the farm economy still in decline and other sources of employment - mining, oil, timber - fading. In part, this is an old, old story: Agricultural communities have always had ups and downs with changes in economic conditions and the weather. For a time during the 1970s some rural areas grew faster than many cities. But the boom in the grain trade and energy industry disappeared, and so did a lot of newcomers.

There is a hopeful side. Economic difficulties are stimulating a lot of fresh thinking - much of it from rural people themselves. The Council of State Planning Agencies (CSPA) has looked closely at newly formed businesses in some of the hardest-hit regions - North Dakota, Iowa, northern Maine, and the Arkansas delta area. The level of entrepreneurial activity compared favorably to that in urban areas.

Successful rural businesses, though diverse in type, have common elements: people willing to put in 50-60 hours a week on top of other jobs; owners who use multiple skills, such as marketing and accounting; small size, averaging three or four employees; a desire to expand.

What a CSPA analyst calls the ``face-to-face economy'' is crucial. These entrepreneurs understand their neighbors' needs and talents. They are able to get financial backing from family and friends, or from bankers they know personally. The human capital in many rural regions, apparently, remains strong.

This doesn't mean, however, that help isn't needed. Governmental aid in the form of agriculture extension, federal loan programs, and state development agencies has existed for years. Congress will consider new rural-development legislation this year. A Senate bill would create new federal programs to stimulate creation of small businesses. House legislation emphasizes channeling aid through states and localities. Both approaches have value, and ought to be blended.

Wherever aid flows from, it has to connect with local leaders who can move a community toward prosperity. Often information, as much as dollars, is needed. Perhaps people could use a clearer understanding of how economic trends, like the strength of the dollar, affect sale of local products abroad. Or they may need technical advice on the possibility of producing an item - like Kiwi fruit or ginger - that's starting to carve a niche in the US market.

Specific, well-targeted development strategies - rather than efforts to lure big industry into small towns - are proving effective. These efforts should get a boost from CSPA plans to set up, through foundation grants, a national ``academy'' where rural-development planners can hone and share their ideas.

Many small towns and small farming operations may continue to be blown away by economic winds. But the outlook for rural American is far from uniformly gray and dusty.