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Natural gas extraction creates local jobs in the short term

Friday, December 21, 2012

Using hydraulic fracturing—a method of cracking rock by injecting water, sand, and chemicals under high pressure—drilling companies have increased extraction of natural gas from rock formations like shale. The three Western States of Colorado, Texas, and Wyoming saw large increases in gas production in the 2000s, most of which came from such unconventional sources. Not all counties in each State were close enough to the activity to benefit economically from the boom. On average, counties participating in the gas production boom saw a larger percent increase in employment, wage and salary income, and median household income and a larger decrease in the poverty between 1999 and 2007 than counties not participating. Still, for the scale of extraction that occurred in the three States, the number of jobs added to local economies is multiple times below what has been projected for the development of shale gas formations in Texas, Arkansas, Louisiana, and Pennsylvania. This chart appears in the December 2012 edition of Amber Waves magazine.

Off-farm business ventures generate more income than onfarm diversification

Monday, November 19, 2012

Historically, many U.S. farm households have engaged in other income-generating activities independent of commodity production to support their lifestyles and to help maintain the economic viability of their farm operations. These business ventures can be classified into two broad categories distinguished by the degree to which farm resources are employed or leveraged. Onfarm diversification uses amenities and other attributes of farmland resources and lifestyles to create additional businesses, while other farms operate off-farm businesses in other sectors of their local economy. In 2007, farm households engaged in 791,000 distinct alternative entrepreneurial ventures that generated $26.7 billion in household income. Onfarm diversification and off-farm business ventures each accounted for about half of these activities, but off-farm business ventures generated more than 80 percent of noncommodity business income accruing to farm households. This chart is found in the ERS report, Multi-Enterprising Farm Households: The Importance of Their Alternative Business Ventures in the Rural Economy, EIB-101, October 2012.

Opportunities for rural wealth creation depend on location and timing of investment

Thursday, November 15, 2012

As the location and boom-bust cycle in ethanol production demonstrates, opportunities for wealth creation (in this case, investing in physical business assets) can be influenced by both temporal and spatial factors. The ethanol production boom in the United States was stimulated by rising oil and gasoline prices relative to corn prices, efficiency improvements in ethanol processing technology, and Federal and State government policies that provided incentives for ethanol production. These temporally-specific drivers, together with comparative advantages of particular locations for ethanol processing--favorable access to corn production and transportation infrastructure--led to rapid expansion of ethanol plants in many rural communities, especially in the Corn Belt over the last decade. In rural places lacking these advantages, ethanol production was less likely to be profitable, and efforts to promote it could impede wealth creation. Even where such advantages exist, changes in the temporal context, such as changes in the relative price of ethanol and corn, have reduced profits and caused some plants to go out of business. This chart appears in "Creating Rural Wealth: A New Lens for Rural Development Efforts" in the September 2012 issue of ERS's Amber Waves magazine.

Farms with more production value are more likely to have broadband access

Wednesday, July 18, 2012

One of the salient features of the Internet is its capacity to provide information quickly and cheaply compared to other dissemination methods, which may reduce the costs of communicating, transacting, and sourcing information. With improved information and knowledge, individuals' perception of products and services provided by businesses would be more accurate. As a result, Internet use may lead to greater efficiency in the agricultural and other rural business sectors. With respect to broadband usage among farm businesses, respondents to the 2007 Agricultural Resources Management Survey (ARMS) were asked if they had Internet access and if it was "high-speed." A majority of farms (63 percent) reported using the Internet in their farm business. Among those using the Internet, the predominant access method was broadband and this group of users accounted for over 60 percent of U.S. farm production. This chart appeared in the report, Broadband Internet's Value for Rural America, ERR-78, August 2009.

Increases in the U.S. poverty rate were highest in the manufacturing areas of the Midwest and South

Friday, July 13, 2012

Nationally, the share of Americans living below the poverty threshold increased from 12.4 percent in 2000 to 13.8 percent in 2006-10. But in nearly one-quarter (762) of U.S. counties, the poverty rate increased by 30 percent or more, while another 878 counties saw no change or experienced declining poverty. Of the counties that had increases of 30 percent or more, 58 percent were in rural areas. Increases in the poverty rate were often highest in regions that suffered the largest increases in unemployment rates during the 2007-09 recession. Many were manufacturing-dependent counties located in the Great Lakes and Southern Highland regions. This chart appeared in the June 2012 issue of Amber Waves magazine.

Mapping frontier and remote areas in the United States

Wednesday, July 11, 2012

Population retention, job creation, and acquisition of goods and services often require increased effort in very rural, remote U.S. communities. ERS has developed a set of frontier and remote (FAR) area codes to aid research and policymaking on such communities. The initial version classifies ZIP code areas and includes four FAR level codes, based on different population and travel-time thresholds. The levels are meant to reflect likely access to various levels of public and private services. Level one-shown on the map-identifies areas lacking easy access to services commonly provided in large urban centers, such as advanced medical procedures, major household appliances, regional airport hubs, or professional sports franchises. Other levels identify increasingly remote areas of the country that may lack easy access to even basic services, such as grocery stores, gas stations, and basic health-care. The map is from the Frontier and Remote Area Codes data product on the ERS website, updated June 1, 2012.