Rural development is an idea whose time has apparently come on a world-wide basis. Highly diverse economies such as, for example, both the United States and India, have generated problems on the rural scene that cannot be solved by technological change in agriculture alone.

As economists our greatest contribution to policymakers is likely to stem from our ability to make conditional forecasts—conditional forecasts of the outcome of specific possible or actual courses of action on the part of (1) government policymakers, (2) participants in the economy of interest, or (3) participants in other economies. But these conditional forecasts are not easy to come by, given the present state of the arts in our profession. In the first place, we do not yet have models which include parameter estimates in which we can place a great deal of confidence. Secondly, we do not at present have models which adequately encompass the vast number of relationships and constraints characteristic of a given economic system.

Advances in storage, transportation, packaging and management have removed many of the old barriers between the Northeast's fluid milk markets. As the barriers disappear, the resulting market interdependence increases the importance of carefully aligning the minimum base prices set for unprocessed milk in the Northeastern federal milk marketing orders. For if these prices should get out of line, the lack of spatial barriers can encourage intermarket transfers which run counter to the orders’ objectives.

Market researchers are frequently interested in determining the differences in attitudes of various groups of consumers. For example, they may want to know if significant shifts in attitudes have oocurred over time or if attitudes vary by sex, income, race or market.

Apple production in Maine has averaged slightly over 1.6 million bushels per year during the five year period 1966–1970, and annual cash receipts averaged about $4.1 million for the same five year period. This $4.1 million of cash receipts represents only about 2 percent of Maine's total agricultural receipts, but it is a major source of income for the relatively small number of producers involved.

Field machinery is an integral part of a farm that produces crops and has to be taken into consideration in farm planning. This machinery presents the farm manager or analyst with problems that differ from other working or fixed farm resources. The reason is that field machinery consists of a set of machines which is an interdependent system, particularly in terms of size, performance and cost factors related to capacity. Maintaining control over the problems of matching machines for size or power and properly timing each field operation by crop or rotation is a difficult and time consuming task with current methods.

Recently there has been considerable controversy surrounding agriculture in general, and especially the recent rise in food prices. Demands are being made on American agriculture to adjust to supposedly new conditions and opportunities. What I would like to do today is to take a brief look at some of the problems facing agriculture and see if they have really changed.

Recent Congressional testimony has focused on the desirability of eliminating certain income tax “preferences” that are important in agriculture. Specifically, separate proposals have urged that capital gains treatment pertaining to livestock, vineyards and orchards be eliminated and that the cash method of tax accounting no longer be permitted. The justification for these proposals is based on the continued activity of wealthy individuals in tax loss or tax sheltered farming, despite provisions of the Tax Reform Act of 1969 to limit such ventures. Furthermore, it is argued that these tax preferences result in a greater subsidy to the high tax bracket individual than low tax bracket individual and thus place low income bonafide farmers at a competitive disadvantage which could force them out of business.

The results of a study to determine the optimum number, size and location of potato packing plants in Maine were recently published. These results indicated that economic efficiency of the industry as a whole could be improved with a movement toward fewer and larger plants since aggregate costs of the three marketing functions—assembly, packing, and distribution to consumption centers—could be reduced. In addition to the economic efficiencies involved, the large plant is better able to respond to orders from buyers desiring a uniform and high quality pack in large volume. A small grower-packer, handling only his own potatoes, may not have the volume of potatoes necessary to offer a particular type of pack with any continuity.

“As a rule, people feel acute concern about the future, beyond the horizon of the present, only when times are out of joint and when the prospect looks menacing. In o our generation we are living in one of these times of unusually intense stress and anxiety” Arthur J. Toynbee, Change and Habit. Oxford University Press, 1966.

Rural community development finally has come of age. After the not very productive rural development program of the 1950's with its emphasis on the small farm, and the equally tepid rural areas development effort of the 1960's, Congress and the Executive finally seem committed to improving the lot of rural America.

Rural communities in Pennsylvania, as well as in many other parts of the United States, have exhibited a great deal of variation in population trends in recent years. Many rural communities have experienced a declining population along with a decreasing employment base. This causes problems of finding new sources of employment as well as providing educational and other public services that are adequate for their remaining population but are financed by a decreasing fiscal base. On the other hand, many rural communities have experienced a new spurt of economic and population growth resulting in a need for additional public services. While the particular problems to be faced are different depending on whether the community is growing or declining, they each have their own peculiar types of problems.

Congress passed the Housing and Urban Development Act of 1968 and reaffirmed its national housing goal of 1948: “the realization as soon as feasible of the goal of a decent home and a suitable living environment for every American family.” However, many states, and New Jersey in particular, have continually fallen short of this goal. The population in the past decade in New Jersey has grown by approximately 20 percent and yet housing has not kept pace with this growth. Current growth requires an additional 100,000 housing units a year, but only 40,000 are being built. In short, the inadequate supply of decent single and multi-family dwellings and increasing housing demand in New Jersey has raised the cost of existing housing out of the reach of many of its citizens.

In communities where average family incomes are low relative to the costs of conventional housing – a common situation in New Hampshire – the services of adequate housing are, in effect, unavailable to many resident. If this service is to be available to low income residents, the public sector must provide public housing, or encourage private provision of low cost housing. Yet, instead of encouraging such housing, many New Hampshire communities ban or restrict the most common form of low cost housing – the mobile home.

Students of our nation's medical care system generally express particular concern over the availability or lack of availability of physician services in rural areas. This concern is not without statistical foundation. In 1969 the nation's most urbanized counties (5,000,000 inhabitants or more) had approximately five times as many actively-practicing private physicians per 100,000 population as did the most rural counties (less than 10,000 inhabitants) [1]. In view of this situation a number of measures designed to increase the rural supply of physician services are being proposed. In general, these measures can be categorized into (1) those designed to increase the size of the resource base used in producing physician services and (2) those designed to reorganize the existant resource base in hopes of increasing resource productivity.

Demands on the public water supply “industry” have been increasing steadily. Most of the existing systems have experienced increased water use per customer over time, as well as a greater number of customers. There has also been a growing interest in and concern about providing adequate quantities of safe, treated water for all of the Nation's population. The cost of providing public water systems for “an estimated 30,000 smaller communities, unincorporated settled areas and farming sectors in rural territory without systems” was estimated at $6 billion in 1966 [1, p. 978]. The cost of completing this task has probably increased, even though many water systems have been installed in these communities since 1966.

The literature on the concept of economies of size in waste water management is extensive. However, only a limited amount of research has been completed which focuses on the extent of these economies associated with the regionalization of waste water management systems.

In the Northeast, major problems relating to natural resource use, particularly agriculture, can be attributable in large part to outgrowths of the rural-urban interface. As communities (cities, towns, boroughs, townships, and counties) strive to fulfill their basic needs for health, education, police protection, recreation, housing, highways, and productive open space, new and more sophisticated methods of implementing land-use controls are needed. Experience indicates that in rapidly urbanizing areas traditional land-use mechanisms for directing growth do not guarantee the degree of permanence that is required to preserve productive open space. An alternative land-use control mechanism to ensure open space preservation explored in this paper is the transfer of development rights and the purchase of development easements.

Creeping urbanization without land use controls is threatening rural areas with the loss of prime and scenic agricultural land. The operation of a relatively free land market shifts land to the highest bidder—one who believes he can make a profit, or one who judges his psychic income from ownership and/or use sufficient to make him prefer land ownership to alternative investments or consumption. As farmers retire and sell to nonfarmers, prime agricultural land adjacent to cities is transferred to more intensive, profitable, and irreversible urban uses—residences, commerce, recreation, and industry. Farmland is shifted from active farming to retirement homes and second homes, both at retail and in large developments. This land use trend is frequently cited as undesirable by municipal planners since it leads to a loss of prime agricultural land which may be needed for future food production and reduces pastoral scenery. In a recent study in Massachusetts, J. B. Wyckoff found that the process of suburbanization was consuming rural land at a very rapid rate—from two to eight times the historic rate.

A major environmental problem is the loss of recreational and asthetic values for bodies of water resulting from accelerated eutrophication. Eutrophication is only part of the concern over increased nitrate levels. More important, several streams have been found to have nitrate concentrations above U. S. Public Health Service Drinking Water Standards of 45 mg/l. Given agriculture's use of nutrients, agriculture's contribution to the nitrogen and phosphorus content of water needs to be evaluated.