Small Town and Rural Economic Development: A Case Studies Approach

By Peter V. Schaeffer; Scott Loveridge | Go to book overview

CHAPTER 15
Agricultural Processing Facilities as a Source of Rural Jobs

F. Larry Leistritz


INTRODUCTION

This case study addresses agricultural processing facilities as a development option for rural communities. Expanded processing of agricultural products in rural areas has been widely pursued as a strategy for rural economic development ( Barkema et al. 1990; Leistitz and Hamm 1994). Expansion of value-added agricultural processing in rural areas is generally seen as a positive development; cooperatively owned, value-added processing plants may allow producers to integrate forward and capture potential profits from processing and marketing their products. Also, whether locally-owned or part of a large, integrated agribusiness company, new processing plants may create new employment opportunities in rural areas previously hard-hit by the farm crisis of the 1980s and subsequent farm consolidation ( Sommer et al. 1993; Murdock and Leisftitz 1988). As a result, the expansion of agricultural processing in rural areas receives broad-based support from commodity groups, rural development interests, and state political leaders. This case study summarizes recent experiences in North Dakota, where several new agricultural processing plants have recently been created.

The expansion of value-added processing in rural areas, while widely supported, has not been without its problems. First, many rural areas have been disappointed in their efforts to attract or develop such facilities, often because of the distance between these rural farm areas and major consumer markets ( Barkema et al. 1990). Even when communities have, succeeded in developing or attracting new processing plants, some host communities have found that the new plants offered more jobs than the local labor supply could fill or at wages lower than local workers would accept ( Broadway 1994; Allen 1995).

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