Rural America is sinking like a stone tossed in a hog wallow, and it desperately needs help from the federal government if it is to survive. With only one-quarter of the nation's population, rural areas account for more than two-thirds of substandard housing and more than one-third of overall poverty.
Creation of new jobs is lagging badly in the countryside. For every new job in rural areas, seven are created in the cities. It's hardly surprising that each week more than 2,000 Americans abandon farming as a livelihood.
The Reagan administration's concentration on increased defense budgets since 1981 has left little to spend on rural development. Even Republicans concede privately that the Democrats have been generally more attentive to the plight of rural America than the administration has.
Now Sen. Robert J. Dole (R-Kan.), the son of a onetime grain elevator operator, is spearheading an innovative effort to tap the Farm Belt's own resources for rural development funds. What makes his role significant is not just that as Senate minority leader he has the standing to rally other Republican legislators around him, but the fact that he is a leading contender for the 1988 GOP presidential nomination.
In a recent interview, Dole was enthusiastic about the rural revitalization idea that he and Sen. Charles E. Grassley (R-Iowa) came up with. In its simplest form, it would turn mountains of government-owned grain reserves into the collateral for loans that would be used to finance private development projects in rural areas.
This was no instant brainstorm. Its genesis can probably be traced to the Republican disaster in last November's elections. Looking past the loss of the Senate and his own post as majority leader, Dole saw a hopeful sign in the election of new Republican governors in the Midwest. He quickly organized a 30-member task force on rural problems.
Out of their discussions emerged the idea of a "Rural Fund for Development" backed by at least $1 billion in loan guarantees. Under the proposal, banks would make federally guaranteed loans to businesses that depend on the farming community. The guarantees would be backed by grain owned by the federal Commodity Credit Corp., the agency that buys up surplus commodities to keep the market stable. It would be a domestic version of the CCC credits extended to countries such as Poland based on their grain harvests.
"These commodities -- billions of bushels -- are locked away in grain elevators," Dole said. "Why not put those assets to work in the rural economy?"
The assets are not only huge -- more than 2.8 billion bushels of grain worth $5.5 billion in government storage as of May 1 -- but they cost the taxpayers a bundle. Storage costs are estimated at $1.3 billion for the current fiscal year, with costs expected to escalate in years to come. Grain inventories are expected to reach 4.5 billion bushels in 1988, worth more than $10 billion and incurring $1.8 billion in storage costs. Storage costs for all CCC-owned products are expected to amount to $8 billion for the 1987-1990 period.