My assignment is to suggest a policy framework for the pursuit of rural community development objectives. I propose to do this in three steps: First, I will describe some major elements of existing policy. As an outgrowth of my interpretation of the' performance of this policy, I will then explore an alternative approach to formulation of the rural development issue. Finally, I will outline a policy framework consistent with this approach.

Few topics in recent years have captured the attention of agricultural economists more than community and rural development. But seldom has the extension of economics been the principal concern. As I worked on this paper with that concern in mind, the topic took on the appearance of an iceberg. Beneath the surface I have encountered many new challenges to economics and the economist, and some that are not so new.

A school system can be visualized as a firm utilizing capital and labor to produce its output. It must compete with other firms in purchasing its inputs. It is broadly concerned with efficient use of resources to produce its product. However, there is no well-defined product nor a price that can be attached to its product, and most of its product is not directly sold. Users (students) exert little pressure to increase efficiency, not only because they lack mature judgment and are unaware of input-output relationships (often inputs as well as outputs are ill-defined and uncertain), but also because efficiency gains are not passed to users. Furthermore, factors outside the school system influence output throughout the long production process. Even if the price mechanism does not work, economic principles can still be used in education to improve decision making.

Economic planning can assist policy makers in using available resources to improve the quality of life for rural and urban people. The objective of this paper is to illustrate how simulation can aid in regional and community planning. The paper will be presented in three main sections. First, economic planning and simulation will be defined. Second, empirical results of a regional simulation study will be presented. Third, empirical results of multi-county and community simulation studies will be discussed.

Economic development is an elusive, multidimensional concept. Identification of the interdependencies and interactions underlying the development process seem to call for appropriate multivariate analysis. Principal component and factor analyses were used in a study of socioeconomic interdependencies associated with economic development in multicounty areas in the 48 contiguous States. This paper summarizes some results from that study and explains the use of a mathematical identity relating factor analysis to principal component analysis. This identity explains the level of economic development in terms of alternative levels of factors.

Association of costs and benefits from rural development is becoming more important as we become more knowledgeable about the actual processes of economic growth. Measuring the geographic distribution or multiple-level benefits is hypothesized as being important for the purpose of creating incentives for further development and growth. This may be necessary, in part, because certain jurisdictional groups are unaware of the benefits and hence do not show initiative in investing (i.e., bearing the costs) in rural development.

As dissatisfaction with existing welfare programs has become more widespread, increased attention has been given to various income transfer plans that would gurantee all U. S. citizens a minimum annual income. One alternative which is being given serious consideration is the negative income tax (NIT). The negative income tax has been proposed in various forms, most notably President Nixon's family assistance plan.

A visit by the Director of one of the Economic Development Districts in Oklahoma motivated this study. Because of declining unemployment prior to 1970, several counties in his district had lost special funding under Titles I and IV of the Public Works and Economic Development Act of 1965 (PL 89-163). The director contended that substantial poverty and other signs of economic and social distress persisted in previously designated EDA counties, and that a new criterion (specifically underemployment) was needed to gear benefits to real needs.

Community leaders of rural areas characterized by low-income and surplus labor seeking ways to promote rural development, frequently encourage new firms to process the primary products of the region. In a rural state such as Oklahoma, which is a large producer and exporter of agricultural products, interest is often focused on industries which process these goods. Impact multipliers are often used to measure income and employment impacts created from processing primary products.

Both public officials and private organizations are becoming increasingly concerned with the need for improved efficiency in and reorganization of local governments. The seriousness of the financial crises in both state and local governments is nowhere more evident than in the President's proposal for federal revenue sharing with the state and local governments.

The fiscal problems of local government, however, are more pervasive than temporary funding solutions alone can deal with.Exhaustive studies of the origins, political and social influences, organization and accomplishments of local governments themselves and their relationships with other units and levels of government are needed in order to develop a governmental organization consistent with contemporary needs. Several areas in the South have dealt forcefully with governmental reorganization through city-county consolidation. Notable examples of this are Miami-Dade and Jacksonville-Duval in Florida, and Nashville-Davidson in Tennessee.

The report of the President's Commission on Rural Poverty stressed the need for improvement in rural schools. Numerous studies have pointed to this need for improvement and have identified ways in which rural schools are inferior to urban schools. The current stress on rural development and improved infrastructure in rural areas further supports the importance of this topic. But what is a good measure of quality when schooling is being considered?

The agricultural economic literature is abundant with least-cost location studies of agricultural processing industries. Yet very little effort has been directed toward similar planning for public facilities in rural areas. The purpose of this paper is to present a conceptual model and its application to the planning of locations for additional multiple service hospital facilities in a predominantly rural area for 1980. The approach is based on the premise that areawide planning, as opposed to substantial reliance upon market mechanisms, is required to allocate health care resources among communities. In this approach it is assumed that all health care service cost functions are long run and that the time period of adjustment is such that fixed capital goods do not restrict adjustments in the service output of hospital facilities.

Practically all major speeches on the agenda of farm policy issues have listed the problems of non-commercial farmers as a major item. Operators of non-commercial, or marginal, farms are a very heterogeneous group. They include: (1) operators of medium sized, undercapitalized farms, (2) farm operators who work part-time off-farm to supplement farm income, (3) operators of small, inefficient farms who, because of age, education or handicap, have limited prospects of becoming fully self-supporting either in farming or non-farm occupations, and (4) rural residents who own farms which provide some income; the owner works full-time off-farm.Farmers in this group generally gross less than $10,000 from agricultural production. This is normally considered inadequate for providing an acceptable level of living.

Pecans contribute significantly to agricultural income in Georgia and in several other Southern states. Eleven Southern states produce the total U. S. commercial supply of pecans and during the years 1967-69, the average annual farm value of marketings was nearly $74 million. Georgia is the leading state in pecan production, contributing 27 percent of total U. S. production and 31 percent of total market value during this three-year period. Georgia produced 60 million pounds of pecans annually with an average 1967-69 farm value of over $23 million.

Market orders authorized under both State and Federal legislation have long been employed to regulate the marketing of many agricultural products, especially fruits and vegetables. While their purposes vary and controls provided for differ, one provision that is common to a large number of orders allows the establishment of minimum standards of grade, maturity, or other characteristics of quality in the marketing of an agricultural commodity. These standards are usually set by the marketing order committee composed of producer and shipper members of the industry, subject to the approval of the Secretary of Agriculture.

Weather constitutes an exogenous factor in agriculture which may have considerable influence on production and marketing. For a particular commodity, weather may influence quantity produced, quality of the commodity marketed, and consequently influence prices received (or paid) by various firms associated with that commodity system. Although some has been written about the influence of weather on agriculture, little economic analysis is available which attempts to integrate estimated probabilities of some weather phenomenon (a notable exception is McQuigg and Doll). This latter situation may be attributed, at least partially, to the complexities of such an integrative analysis.

During the past decade, commercial pork production has varied from 723 to 1,372 million pounds (dressed weight) per month. For the same period, the average farm price of hogs has ranged from $12 to $30. Consequently, net returns to hog producers were highly variable.

Agricultural economists have devoted considerable research effort to estimating the quantity-price relationship for pork. Purcell and Raunikar suggest that the relationship between price and quantity of pork may differ for positive and negative changes in the price of pork at the retail level.

Much of the research in commodity hedging has concentrated upon the development of theoretical models describing the optimum position in cash and futures markets. Other studies have shown that the difference between current spot price and futures price represents the market price for storage, processing services, or both. The revenue stabilizing potential of futures markets for commodities with continuous as opposed to noncontinuous inventories has also received attention. However, very little work or literature is publicly available on how different hedging strategies actually would have performed for a particular commodity over time.