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We have previously expressed our view that the cuts in the Nebraska state budget in 2001 and 2002 were decidedly anti-rural and anti-poor. Adding an increased tax burden on low-income families only reinforces that opinion.

Nebraska's Legislature will be called into special session this summer to cut the budget. The latest figures from the Nebraska Department of Revenue indicate the state's tax revenues are more than $136 million short of projections. More than half of that sum, $75 million, represented the shortfall for the month of May.

Data also show that low-income households make up a larger portion of households in rural areas than in urban. Reliance on a regressive tax will place a disproportionate and significant burden on many rural people, and on all low-income Nebraskans.

We believe all tax policy should be based on the concept of progressivity. In 1992, we issued a report entitled A Balanced and Fair Tax System for Nebraskans that found Nebraska's tax system was particularly hard on the poor because of its reliance on sales and property taxes - the two most regressive taxes.

Recent actions by the Nebraska Legislature have not changed that general indictment of the state tax system. It is time for a full-scale review of Nebraska's tax system, with an eye toward greater balance, fairness, and progressivity.

Contact: Jon Bailey, jonb@cfra.org for more information.

Fairness and Corporate Tax Breaks
The budget crisis gripping states has created an urgent need for greater accountability for tax subsidies for corporate job creation together with balanced funding for other cost effective programs that support small enterprise and rural community development.

States spend billions in tax breaks to induce large employers to create or relocate jobs. Nebraska is spending approximately $200 million in foregone tax revenue annually through programs dating back to a late 1980s threat by ConAgra to leave the state.

Nebraska is not unique. Corporate job creation subsidies have mushroomed, with little accountability for how much burden they shift to other taxpayers or how well they perform in creating quality jobs and stronger communities.

That must change. Selectively eliminating a company's tax burden contributes as much to state budget deficits and imposes as much burden on other taxpayers as writing them a check. It is no less a state expenditure.

We should create job quality standards for job creation and corporate relocation subsidies so the public pays only for jobs that offer genuine opportunity and help to build strong communities.
And we should establish a budget for how much we can afford to spend on corporate subsidies. In so doing, we must balance those expenditures with other approaches to community and economic development - programs that work in small towns and help small businesses and family farms and ranches grow the economy.

Already some of the nation's leading rural programs have fallen victim to the budget ax. Iowa's Leopold Center, which conducts agricultural research and outreach to strengthen family farms and protect the environment, has lost the lion's share of its budget.

Nebraska's ground breaking small business development program was cut by more than half and its value-added agriculture program eliminated. Yet, corporate job creation subsidies that cost 100 times as much remain untouched. A modest proposal by Nebraska Governor Mike Johanns to defer corporate tax refunds was defeated.

Hard times necessitate sacrifice and cuts. But they must be made fairly. And they must preserve the elements of state policy that are essential to building genuine opportunity for all of our people and a future for all of our communities. If there is to be money for that, corporate tax subsidies must share in the cuts.

Agree or Disagree? Send your comments to Chuck Hassebrook, chuckh@cfra.org.

Farm Bill Not Done
Actions in the House Appropriations Committee demonstrate nothing is a sure thing.

Though the new farm bill was passed and signed into law this past spring, things can still change. A reminder of this fact, for better or worse, played out in the House of Representatives Appropriations Committee in July.

The appropriations committee designates funding for the agriculture committee's farm bill. This responsibility also provides a chance to alter the legislation. And an attempt was made by Rep. Marcy Kaptur (D-OH) to do just that. Kaptur offered an amendment for rewriting the farm bill's payment limitations provision, attempting to substitute the Senate's more effective limits.

The most noteworthy aspect of her effort was the response of Rep. Bill Young (R-FL), committee chairman, and Rep. Henry Bonilla (R-TX), chairman of the appropriations subcommittee on agriculture. As stated by Kaptur and outlined in a document obtained by the Associated Press, the committee leadership listed 23 provisions she either favored or that specifically involved Ohio that would be eliminated if she persisted with her amendment.

Kaptur withdrew her amendment, and Bonilla was quoted as saying no one would be allowed to "rewrite the farm bill." Note that Rep. Bonilla seemed to forget that sentiment when he presided over a major rewriting of the farm bill's conservation title.

The Conservation Security Program, one of the few real victories in the new farm bill, was dramatically changed into a single state pilot program - available only to Iowa's producers - in the appropriations bill that has been passed by the House Appropriations Committee.

Contact: Brad Redlin at the Center, bradr@cfra.org for more information.

Importance of Leadership in Communities
Learning to influence others is a key leadership ingredient. Personality type plays a big part in how successfully we communicate with others.

Too often, leadership development is not used in its proper context, especially with community development. When you think of a leader, the mayor, city administrator, town council, or others that govern the town may spring to mind. These individuals are often the smallest piece of the pie.

Leadership is a balancing act that requires many people to use their skills and gifts. Recognizing the leaders in a community is not automatic. The loudest mouth in a meeting does not constitute a leader, but the quietest person in the room may not emerge as a leader either.

One aspect of leadership is successfully influencing people to your way of thinking and getting them to take action. Without leadership, everyone would do their own thing, and there would be no cooperative result.

Leadership development is underway in all of the communities involved in the Center's Project HOPE, a community renewal effort. One of the first workshops we presented dealt with personality awareness.

Dr. Leverne Barrett from the University of Nebraska has been guiding communities and individuals through a series of personality trainings. If we know how to communicate with each other based on our personalities, then working with others will be easier.

People in all of the communities have admitted that although they have known someone all their life, they never realized what the other person's personality was like. They just viewed the other as different and may not have ever been able to persuade the other person to their way of thinking.

These workshops are just a beginning in a series that will help groups form and will identify some of the hidden leaders of a community. People are the greatest asset any community can have. It is the ability to get them to come forward to lead others that is the biggest challenge in developing new leaders.

Contact: Michael L. Holton, michaellh@cfra.org for more information.

Corporate Farming Notes
Iowa's ban on packer ownership of livestock under attack; beef checkoff ruled unconstitutional; five packers control majority of beef and pork processing.

Corporate giant Smithfield Foods is at it again; this time the world's largest pork processor and producer has filed a lawsuit in federal court in Des Moines, Iowa to have Iowa's ban on packer ownership of livestock declared unconstitutional. A Smithfield representative said the company believes the Iowa legislature unfairly singled out the company last spring when it strengthened its prohibition of packers owning livestock in the state.

Joining Smithfield as plaintiffs in the lawsuit were Murphy Farms LLC and Prestage-Stoecker Farms. Iowa, Nebraska, and South Dakota are among the nine midwestern states that have enacted statutory bans on packers from owning or feeding livestock.  Source: The Des Moines Register

US District Court Judge Charles Kornmann made an about face from his prior decision to rule South Dakota's Amendment E unconstitutional. This time Judge Kornmann stood up for this country's independent producers and ranchers and ruled on June 21 that the nationwide beef checkoff program was unconstitutional and that the program end by July 15, 2002.

His decision was based on his belief that the beef checkoff program violates First Amendment rights of free speech and association. According to opponents of the checkoff the National Cattlemen's Beef Association (NCBA), which receives most of its funding from checkoff fees, has worked against the interests of independent ranchers in a number of areas including livestock market competition, international trade policy, and country-of-origin labeling for beef products.

On July 10, the 8th Circuit Court of Appeals issued a stay of Judge Kornmann's ruling pending consideration of the appeal by NCBA and others. That means the beef checkoff will remain in force until further rulings.  Source: Associated Press

The Organization for Competitive Markets just released some interesting facts. As of 2000 the top five commercial hog slaughter firms controlled 64.6 percent of all commercial hog slaughter operations. Smithfield was number one with 18.8 percent, followed by IBP with 17.6 percent, Con-Agra at 10.5 percent, Excel at 9.7 percent, and rounding out the top five, Farmland at 8 percent.

These same corporations that control so much of the commercial hog slaughter were also the top five commercial U.S. beef packers in 2001. At the top of the list was IBP followed by Excel, ConAgra Beef Company, Farmland National Beef, and finally Smithfield Foods. It feels good to know that five responsible corporate citizens control a vast majority of this nation's beef and pork processing.

Contact: Jeff Fiegenschuh, jefff@cfra.org at the Center for more information.

• Determination of the market potential for locally grown grapes and locally produced wine, University of Nebraska-Lincoln - $12,346.
• Development of a marketing research template for meats, fruits and vegetables and other specialty products, University of Nebraska-Lincoln - $2,469.
• The potential of public schools as markets for local fresh fruits and vegetables, University of Wisconsin - $33,711.
• Identify value-added (including by-product) industries that could co-locate next to a value-added livestock processing facility, Iowa State University - $9,720.
• Survey and research small and very small meat processing companies to determine processing capacity for direct and other niche meat marketers and the competitive advantages/disadvantages, University of Nebraska - $27,160.
• Human health benefits of pasture-fed animal food products; multi-species slaughter plant characteristics, University of Missouri - $28,921.
• Chestnut market research and product development, Practical Farmers of Iowa and Southeast Iowa Nut Growers Cluster - $7,700.

Other activities and results of the initiative are available by visiting www.FarmProfitability.org.

Center Staff Changes
At the end of this summer Lisa Hardaway, our Media and Outreach Associate, will leave the Center for adventures in the East. She is looking forward to exploring her new surroundings with her family, but will miss many people she has come to know through her work here.

"People are what make this organization work - both inside the organization and out. I really enjoyed meeting and working with the folks on whose behalf we all work ... farmers, ranchers and rural citizens.
I plan to stay home with my two-year old son, JT, for a few months and look for work at another non-profit around the first of the year. Of my time here, I most enjoyed waking up each morning, going to work and knowing that even if we struck out we were still fighting the good fight."

Lisa helped to elevate the Center into a national voice in publications ranging from the New York Times and Los Angeles Times to the hundreds of small daily newspapers and radio stations across rural America served by the Associated Press. She helped put the concerns of rural people before the nation, and she helped rural people get the information they need to participate in the Democratic process.

Center policy analyst Brad Redlin assumed the position of Media and Outreach Associate on July 29.

Center Office to Relocate to Lyons, Nebraska
Having outgrown its offices in Walthill and after investigating options to provide added space for the organization, the Board of Directors of the Center for Rural Affairs have voted to move the Center to new quarters in Lyons, Nebraska. The move will likely take place late in the summer of 2003.

When the Center was founded in 1973 it employed a handful of people. Today it employs 28 full-time staff members, 18 of which are currently housed in Walthill.

The Center carefully investigated the costs associated with adding on to the present building and complying with federal handicap accessibility laws. A building project sub-committee also looked at the availability of existing local or nearby buildings and building sites.

Earlier this year the Center board decided to locate the organization's new headquarters on a now vacant lot adjacent to the U.S. Post Office on the west end of Lyon's main thoroughfare. Lyons is a rural community of just over 900 people, located 15 miles south of Walthill on Nebraska Highway 77.

Erickson-Sullivan Architects of Lincoln and Fauss Construction of Hooper, Nebraska were selected to handle design and construction of the new building. A final design should be completed by the fall of 2002 with groundbreaking set for early 2003.

To help cover construction and moving costs the Center will seek foundation funding and gifts from individual supporters of the Center. Watch for more details about the building and an announcement of ways in which you can help build a more adequate home for the Center.

MIDWEST DIGEST
Shared Appreciation Agreements case dismissed; Wisconsin protects family farms.

Judge Rodney Webb has dismissed the Shared Appreciation Agreements court case in North Dakota. The ruling took place in May of this year.

The judge ruled that the language governing the agreements, though admittedly "imperfect" did require recapture of funds at the end of the term. The plaintiffs may appeal this decision to the 8th Circuit Court of Appeals.

During the most recent legislative session in Wisconsin, nine farm, environmental, consumer and religious organizations drafted the Family Farm Protection Act introduced to the Wisconsin Senate as SB 445. The bill called for:

• Investigation of the impact of consolidation in the ag industry.
• Assessment of the state's ability to enforce laws governing anti-competitive practices.
• Restoration of consumer credit protections for ag loans and creation of new loan programs for new agricultural businesses.
• Expansion of state assistance to farms implementing manure management plans and enhanced oversight of large-scale manure storage facilities.
• Reform of state grant and loan programs that lend to benefit large-scale operations over small farms.
• Limiting the amount of cost-share dollars that any one farm can get so that more farms could comply with environmental standards.
• Significant state investments in research, education and economic development programs.

The bill totaled $8.1 million and was not debated this year.

Thanks to: Lisa Hardaway, who wrote this article and our other Midwest Digests.

Dry Weather Dashes Hopes for a Good Harvest across the Corn Belt 
Drought has again descended on the Great Plains and Western Corn Belt - sapping crops of life and robbing families of hope.

We watch as the ravages of nature deny those who work the land the fruits of their labor. And though we do not share in the loss, we can feel their despair. Like them, we look each day for signs of rain and watch the crops shrivel and with them hopes of a fruitful harvest.

We marvel at the steady persistence, the stoic determination, and the undying hope of farmers and ranchers who persevere through good years and bad to begin anew each spring.

From our ancestors who withstood drought and pestilence to carve farms and communities out of an unforgiving region, to our grandparents who fought through dust bowl drifts as deep as snow, to today's determined survivors in farming and ranching - we admire the courage and strength that has brought generation upon generation back each year to feed us and produce the life blood of our rural communities.

There is no ready solution to the difficulties brought by drought. We must reform misguided policies that squeeze the margins so low for family-size producers that they can build little cushion in the good years to carry them through the dry years. Holistic management strategies and production systems that reduce vulnerability to drought merit more emphasis in research and extension programs.

Federal disaster aid is sorely needed. But as with all farm programs, payments to large producers must be capped. Uncapped disaster aid would minimize the risk of unlimited expansion and ever more aggressive land acquisition, worsening the underlying problem by driving land prices and cash rents higher and profits lower.

Finally, we must not forget to simply appreciate the farmers and ranchers who subject themselves to the whims of nature, so we might eat.

Contact: Chuck Hassebrook, chuckh@cfra.org with comments or questions. 

Editor: Marie Powell