Entrepreneurs Lead Rural Economic Development

Linda Benedict  |  1/6/2006 3:18:01 AM

J. Matthew Fannin

Rural economic development addresses factors to increase the quality of rural life including the availability of infrastructure. The research and extension activities of the LSU AgCenter have adapted over time to meet the changing structure of our rural economies to promote their growth and well-being.

In the years following World War II, the growth of the American economy became increasingly driven by innovation. Key innovations such as hybrid seed varieties, commercial fertilizer and pesticides increased productivity of American farmers. In addition, there was an increasing emphasis on how these inputs could be more effectively combined to increase agricultural outputs while meeting other goals such as environmental benchmarks. During this time, agricultural research and extension developed best management practices to maintain and improve the quality of the soil, water, forests and the larger ecosystem while still providing farm households with incomes to maintain an adequate standard of living.

The overall efforts of research and extension through the 1990s have generated a positive return on investment. According to an aggregate analysis of post-war studies by the International Food and Policy Research Institute, the rate of return on investment in agricultural research and extension exceeded 36 percent. That is, every one dollar invested in research and extension returned $1.36 to citizens from increased agricultural productivity.

The model of growth in today’s 21st Century economy is driven by strategic innovation to meet the increased demands for goods and services from businesses and consumers. Today’s innovations include both generating new products and services for consumers and finding more efficient and cost-effective ways of producing existing products. The LSU AgCenter is leading efforts in both of these strategic areas.

AgCenter researchers have been effective in generating new discoveries that have assisted farmers in being more productive, while at the same time providing resources for the next generation of innovation. Recent examples include BASF Clearfield rice and Delta & Pine Land Paymaster cotton seed varieties. As an institution, the AgCenter exceeded the national average of universities with 34 invention disclosures arising from $51 million in research funding in 2003. These efforts led to 19 patents applied for and eight patents granted during the period. Licensing revenue from these inventive activities generated more than $1.02 million in 2003.

Rural development in the 21st Century economy is also being led by entrepreneurs who are highly skilled in organizing resources and managing risk to create new jobs by more effectively and efficiently producing existing goods and services. The LSU AgCenter in cooperation with the Southern University Agricultural Center has recently formed the Louisiana Center for Rural Initiatives to address this and other rural development issues. This center includes faculty members from multiple departments and schools across both campuses dedicated to the sustainable growth and development of rural communities in the state.

As a part of this effort, AgCenter faculty members have been actively involved in assisting aspiring entrepreneurs interested in starting a business. Community economic development faculty members are delivering workshops in each region of the state to assist entrepreneurs in the earliest stages of business development. These workshops assist individuals who may have an initial idea about a product or service but are seeking direction to identify essential features of a business plan such as discovering markets, identifying financing tools and understanding regulatory issues.

To meet the growing demand for value-added entrepreneurial activities, the AgCenter has established the Delta Rural Development Center (DRDC). The center is housed at the Thomas J. Lingo Community Center in Oak Grove and is directed by James Barnes, an assistant professor with the Department of Agricultural Economics and Agribusiness.

Read Bringing Rural Development to the Delta, also in this issue.

The DRDC focuses on providing extension and research programs to promote the economic health of rural communities in the multi-state delta region as well as to provide a model for regional community economic development support for the entire state. The DRDC provides assistance for both agricultural and nonagricultural-based rural entrepreneurs who are developing business plans as well as those seeking financial support through various federal and state assistance programs. The DRDC offers new businesses programs that focus on helping people understand some of the most critical dimensions of business management, such as how to start a business, entrepreneurship, customer relations, business ethics and leadership.

The center also offers public-sector organizations such as chambers of commerce, hospitals, school boards and police juries a number of programs aimed at improving organization and operations. For example, the DRDC offers Healthy Boards, a program aimed at improving the governance and management of boards. The program teaches board members how they can govern using healthy organizational principles for success. Other innovative programs will be developed to help these public-sector organizations more effectively deliver these vital public services, all of which build local capacity and infrastructure for long-run, sustainable economic growth.

Research and extension activities have adapted over time to address the development issues of a changing rural economy. As the nonfarm population of rural Louisiana grows and competition for globalized markets increases, LSU AgCenter faculty members will continue to incorporate innovative research and extension programs to address the evolving rural economy.

J. Matthew Fannin, Assistant Professor, Louisiana Center for Rural Initiatives, Department of Agricultural Economics and Agribusiness, LSU AgCenter, Baton Rouge, La.

(This article was published in the fall 2005 issue of Louisiana Agriculture.)

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