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As supply chains strain, Vt. author says 'value chains' can link wealth creation to rural communities

A red tractor pulls a forage harvester through a corn field in front of a fall-colored New England mountainside.
Toby Talbot
/
Associated Press/File
Author Shanna Ratner says reframing the definition of wealth to account for "value chains" that link health, skills, social networks, resources and healthy environments is a needed way to change the paradigm around wealth creation in rural areas.

The economic struggles of rural America had been well chronicled, but a new book suggests that a different approach to rural development could better empower the people who live in remote parts of the country.

VPR’s Mitch Wertlieb spoke with Shanna Ratner, founder and principal of Yellow Wood Associates, a firm specializing in rural economic and community development. She’s also the author of Wealth Creation: A New Framework For Rural Economic And Community Development, where she argues that past attempts to attract outside companies to rural areas like Vermont's Northeast Kingdom are misguided, and only a broad definition of wealth that includes social, natural and intellectual capital can put control in local hands. Their conversation has been edited and condensed for clarity.

Shanna Ratner: There are many forms of wealth, and they aren't all money. And they aren't all concentrated power. Wealth in the framework that I've written about refers to all the elements that are required to have a sustainable economy, and a sustainable society. And those include health and skills, creativity, social networks and trust, power over resource allocation decisions, a functional natural environment, infrastructure of all kinds — from internet, to roads and systems of production — and unique ways of being tied to history, ethnicity and place. As well, of course, as money.

Mitch Wertlieb: How can local government officials have an influence on improving economic security for rural Americans? Of course, yes, I am talking about money there, but some of those other larger security concerns that you have as well?

The first thing local governments need to do — and remember that in Vermont, our local governments are all volunteers, so I think there's a limited amount at the outset that we can really expect from our local governments, in terms of reframing our entire economic system — but one place they can begin is to understand their economy from a regional perspective, and use the power they have of convening to bring the businesses in their communities and their regions together, sector by sector.

So, for example, within tourism, within agriculture, within forest products, within environmental mediation, so that they can start to reimagine their connections as businesses to one another, and to the broader markets in ways that are not exploitive.

I'm wondering how rural places like the Northeast Kingdom, to use just one example — which so often lack the resources available to larger metropolitan areas — how can they actually use those limited resources to produce the kind of outcomes they want? Because aren't they at an automatic disadvantage, lacking the core resources to produce things that people want and need?

The way you phrase this question is quite telling. It emphasizes the needs and the deficits of rural places. It does not emphasize their assets.

"The reality is that rural places have tremendous assets, in all forms of wealth, upon which urban areas actually depend for their own survival."
Shanna Ratner, author of 'Wealth Creation: A New Framework for Rural Economic and Community Development'

The reality is that rural places have tremendous assets, in all forms of wealth, upon which urban areas actually depend for their own survival.

Without rural areas, urban areas wouldn't have the air they need to breathe, they wouldn't have the food they need to eat, they wouldn't have the fiber products they need, they wouldn't have the minerals they need. So, value chains are the relationships between and among businesses that allow them to meet the needs of buyers, in ways and at a scale that no individual business could achieve on its own.

We hear a lot about broken supply chains these days, and we have, right now, at this particular moment in history, an extraordinary opportunity to reshape our supply chains into wealth creation value chains that change how we produce, who produces and how we consume.

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From my perspective, I think the state of Vermont — not local governments, the state — needs to train wealth creation value chain coordinators, within organizations that have capacity in every sector, so that we can get these dots connected and begin to revolutionize how, and for whom, we produce.

Are you saying that rural areas actually have more leverage than they perhaps realize in affecting, or bringing about better change, for their regional economies?

Yes, that is what I'm saying, and I believe they actually do have a lot more leverage, particularly today, when we start to be concerned about the way the environment works.

Whether it's soil quality, or forests, or water quality, air quality — these are all things that all of our survival depends upon. And what happens, what takes place in rural areas, is much more determinative of those qualities, than the day-to-day life in urban areas that depend on it.

I want to give an example that I know you're well aware of here — and again, this is something that has affected a rural community right here in Vermont — and this is the EB-5 scandal that happened in the Northeast Kingdom.

In that scenario, promises were made by wealthy developers with some Vermont ties to bring a biotech firm, a hotel, and other developments to the Northeast Kingdom. This all turned out to be an elaborate Ponzi-type scheme that bilked foreign investors of their money.

Was that whole endeavor the wrong approach, in your view, to begin with? Because it relied so heavily on well-off developers and investors from outside the region to provide the catalyst for that development that, of course, never occurred.

Rural areas fall prey to this kind of thing, because they see themselves as powerless. And they're looking to others to solve their problems.

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They want to believe in a silver bullet. Essentially, they want to believe in the tooth fairy. And it's time for rural areas to recognize and realize their own potential for changing the terms on which they contribute to the larger economy. To change those terms from terms of exploitation, to terms of mutual benefit.

It's possible. It can be done. And this is where your earlier question, about the role of politicians, comes in. Politicians can be extraordinarily helpful in helping to shift the larger system of laws, within which value chains operate, so that they can move from exploitive relationships to mutually beneficial relationships.

"It's time for rural areas to recognize and realize their own potential for changing the terms on which they contribute to the larger economy. To change those terms from terms of exploitation, to terms of mutual benefit."
Shanna Ratner, author of 'Wealth Creation: A New Framework for Rural Economic and Community Development'

It sounds to me like you're saying there is an opportunity here, coming out of COVID and all this disruption, to do things differently.

Is that the main message that you want to get across, that we have an opportunity here coming out of crisis?

Absolutely. Yes, yes, yes! We have an opportunity to rethink not only what we do, but more importantly, how we do it.

If you are willing to get into the room with folks you'd never known, never met, never thought you'd be sitting with, and learn about their self-interest, what they care about … enough times, you will find the right partners.

You will find a place where my self-interest and your self-interest coincide into a shared interest. And that doesn't mean we have to "sing Kumbaya," it means that around the issue of the functioning of a value chain, there are places in which what matters to me and what matters to you actually reinforce one another.

Have questions, comments or tips? Send us a message or tweet Morning Edition host Mitch Wertlieb @mwertlieb.

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