Rural Action | Strategy paper

Introduction
Rural Action, Inc., is a membership-based organization working for just and sustainable communities and culture in Appalachian Ohio. Rural Action provides organizing assistance, training, networking and support to a diverse group of citizens for the revitalization of their own communities. An important part of this work is building a more sustainable regional economy. Rural Action's Sustainable Economies Initiative seeks to provide a meaningful livelihood for individuals while preserving the environment and furthering other goals of Rural Action and the community. Building on the assets of local communities, the Sustainable Economies Initiative offers technical assistance, training, organizing and networking opportunities to encourage sustainable economies, entrepreneurship, economic literacy and economic justice.

Theoretical Framework
Conventional economic development strategies rely heavily on recruiting outside industries to locate in a community, exploitation of natural resources, and other means of bringing outside dollars into the local economy. However, sustainable economic development requires a new way of looking at the creation of wealth. Based on research into innovative economic development models and our own experience, Rural Action has developed an approach to sustainable economic development centered on four principles:

1. Keep local dollars local: While it is certainly important to bring outside dollars into any community's economy, the first step in building a sustainable economy is to find ways to keep as many dollars as possible circulating within the community. This means identifying untapped or underutilized resources within the community which can be used to meet local needs which are currently being supplied by outside entities. It means encouraging local consumers to support locally owned, locally controlled businesses, and developing systems which enable local investors to invest in the local economy while earning competitive interest rates. Studies have shown that every dollar spent at a local business will circulate at least five times before leaving the community. The more dollars spent locally in the first place, the more wealth created within the community.

2. Use resources sustainably: Another way of creating new wealth within the community is through more efficient and sustainable use of resources. Recycling or reuse of items that would otherwise have been disposed of through dumping, incineration or other costly means not only saves the cost of disposal but also adds value. Preserving biodiversity and using renewable resources such as wood and water only at a sustainable rate prevents depletion of the resource and ensures that the resource will continue making a positive contribution to the economy indefinitely. Increasing energy efficiency or relying more on renewable energy sources increases the production capacity of a community without any increase in cost. Closing the environmental loop preserves the environment for future generations while improving the economic well-being of the present generation.

3. Build on unique local assets: A sustainable economy meets local needs and also attracts outside dollars by building on assets unique to the region, such as existing locally-owned businesses, rich agricultural land, interesting culture and heritage, and native flora and fauna (cheap and plentiful labor and lax environmental standards are not unique local assets). Building an economy around what is unique to a region creates a healthy, diversified and sustainable economy while preserving a distinct local flavor.

4. Increase local ownership and expand ownership options: Local ownership is vitally important to building a sustainable economy. Local ownership keeps local dollars local, since profits remain in local hands. In addition, local owners are less likely to pull up stakes and move a company somewhere where labor is cheaper. Local owners are also more likely to be responsive to efforts to close the environmental loop than outside owners with no stake in the community. And local owners are more likely to be aware of unique local assets and to be in a position to see opportunities to build on them. A sustainable economy also provides a wide variety of ownership options, including worker-ownership, producer or consumer cooperatives, community-owned or non-profit-owned enterprises, sole proprietorships, partnerships, microenterprises and small corporations. The more local residents who have an ownership stake in a community's economy, the more control the community has over its economic destiny. In addition, broader opportunities for ownership lead to more equitable distribution of wealth. Wealth concentrated in the hands of a few is potentially destabilizing to a community, both socially and economically.

Taken together, these four principles can provide guidance in moving toward a more sustainable regional economy. These principles can be used to make development decisions in any community or region, urban or rural. However, each community will end up taking a somewhat different path. because each community has different assets to work with and a different vision of the future.

Statement of Need

The need for sustainable economic development becomes more evident every day. Environmentally, studies show that we are very close to the point of no return. Indeed, some researchers believe that the maximum carrying capacity for the earth was reached during the 1930s and it may already be too late to prevent extinction of the human race and many other species. Global warming, ozone depletion, deforestation, radioactive waste--the list of environmental hazards goes on and on. Economically, globalization of the economy seems to have led to greater prosperity for a privileged few and increasing poverty for the majority. Even in the United States, the gap between rich and poor continues to grow. It is critical that more environmentally and economically sustainable ways of living be developed.

Appalachian Ohio is a microcosm of these global issues. The environment has been devastated in many areas by over a century of extractive industries such as coal mining and logging. Some streams are so acidic that they can no longer sustain life of any kind. The economy has also been devastated by the boom and bust cycles of a natural resource based economic system. In Athens County, the poverty rate is 33%, and in the surrounding counties over a quarter of the population lives in poverty. Many communities continue to hope that the coal mines will return to "rescue" them economically, and in the meantime, prisons, incinerators and manufacturers seeking cheap labor and tax abatements are trumpeted as economic development success stories. It is time to leave behind the failed economic strategies of the past and develop a sustainable economy for the future.

Assets to Build On

Appalachian Ohio has many assets which can form the building blocks of a sustainable economy. Despite environmental degradation, the region still has a biodiversity of flora and fauna second only to the tropical rain forests. Sustainably developed, these biological riches present opportunities for food products, medicinal uses, ecotourism, and other economic ventures. The area also has underutilized agricultural land, a moderate climate and plenty of rainfall, making increased local food production an avenue worth exploring. The region has a rich cultural and artistic heritage, so that heritage tourism, arts and crafts production, and musical performances are natural areas for further development. The process of identifying assets and the opportunities for economic development that they present is an ongoing process, leading to a more diversified economy and new enterprises building on the success of older ones.

Program Description

Rural Action's earliest economic development efforts focused on closing the environmental loop. ReUse Industries, started by Rural Action in 1994, collects, repairs and resells used items such as appliances, doors, windows and other materials that otherwise would have become part of the waste stream. This enterprise is now a separate non-profit organization, with its own staff and funding.

Rural Action's second effort, Rural Action Supply, focused on promoting recycled products. Started in April, 1995, Rural Action Supply was a distributor of office supplies with an emphasis on recycled products. Prices were competitive with national distributors such as Quill and Viking, but the profits stayed local. 1996 sales totaled $60,000. However, increasing downward price pressure from industry giants such as Staples and Office Max reduced profit margins to the point that it did not make sense to continue in this business. Rural Action Supply closed September 30, 1997, with all debt paid off and no loss to Rural Action.

The Sustainable Economies Initiative is currently focusing on programs that build on local assets. In particular, underutilized agricultural land and rich forest resources have tremendous potential for sustainable economic development. Athens County alone spends over $40 million per year on food products, and less than one percent of those dollars stay local. Even a small increase in local distribution, processing and purchasing would have a dramatic economic impact. In addition, reducing reliance on food imported from out of state and internationally reduces the environmental impact of shipping, processing and packaging and improves the security of the community's food supply.

Our region's mixed mesophytic forest also holds great promise. In addition to a diverse mix of high-value hardwood species, the forest is filled with non-timber forest products whose potential is yet to be fully explored: gourmet mushrooms such as blue oysters, chanterelles, morels, and chicken of the woods; medicinal herbs such as ginseng, goldenseal, blue cohosh, black cohosh, bloodroot, and numerous others; wild fruits such as paw paws, persimmons and wild cherries; nut trees like black walnuts, hazelnuts, hickory nuts, and others; and ornamental plants valued by florists, wreath makers and other craftspeople.

Rural Action's Sustainable Agriculture Committee has developed several projects to increase local and regional marketing opportunities for local growers. Good Food Direct! produces a catalog featuring locally produced food and farm products. Consumers place orders and make payment to Good Food Direct! and pick up their orders once a week.

As new jobs are created by these programs, it is important that there be qualified local people waiting to step into them. For this reason, Rural Action, in collaboration with three other community development organizations and the Athens County Department of Jobs and Family Services, has developed an innovative job skills training program for people receiving public assistance. The program features hands-on skills training in a supportive atmosphere, one-on-one mentoring, life skills development and problem-solving, and sector-based job placement strategies.

Summary

Building a sustainable economy is a long-term process requiring decades of investment of human, social, ecological and economic resources and in human, social, ecological and economic resources. The impact of each individual project is small, especially at first, but over time projects build on each other, dense social and economic networks are formed, and a critical mass of activity is achieved. The Sustainable Economies Initiative is just beginning this process. However, because the Sustainable Economies Initiative is part of Rural Action's integrated development strategy which builds human, social, environmental and economic capital, we believe that sustainable economies will become a reality in Appalachian Ohio.