New directions for the prairie economy: Connecting conservation and rural development

One of the principal essays in the launching of Prairie Fire was the 2007 study “Nature-resource amenities and Nebraska’s economy: Current connections, challenges and possibilities”. We see that theme now being examined and promoted by many other organizations and publications. The recently released “New Directions for the Prairie Economy” has been published by the World Wildlife Fund. The report itself is 56 pages, and we present the executive summary so readers of Prairie Fire can again become more familiar with some of the social, economic and environmental changes now in evidence on the Northern Great Plains.

By Curt Freese, Dawn Montanye and Kora Dabrowska

Rural communities and landowners of the Great Plains are at a crossroads. The intersection involves towns that are struggling to survive, a generational transition in land ownership, an important but uncertain future for agriculture, and prairie ecosystems and wildlife of importance to both local communities and the American public. This report examines the potential role of a nature-based economy in supporting and diversifying the economic base of the Northern Great Plains (NGP) of the United States (encompasses Montana, North Dakota, South Dakota, Wyoming and Nebraska). After reviewing the NGP’s economic, demographic and land-use trends, we examine the economic values of the region’s natural ecosystems and wildlife and how those values might be converted into tangible benefits for landowners and businesses, and into incentives for restoring and conserving the very land and biodiversity from which those values arise.

Our analyses highlighted conditions and trends in four sectors in the NGP:

The economy

*Metropolitan areas have been doing well over the last two decades while rural and Indian (greater than 50 percent Indian population) counties have lagged far behind in economic growth and employment.

*The long-term decline of agriculture’s contribution to the economy has continued and now constitutes about 4 percent of the Gross State Product of the five NGP states. Nevertheless, agriculture remains very important for the region, particularly for rural communities, when considering direct, indirect and induced effects.

*Service jobs, followed by retail and government jobs, have been growing in importance and now, collectively, account for roughly 70 percent of all employment in the NGP.

*U.S. government crop subsidies, totaling $11.2 billion for the NGP from 1995–2006, have usually accounted for most—and often all—of net farm income.

Population change

The dearth and decline of economic opportunities in rural regions of the NGP appear to be driving some aspects of population change in the NGP, with four trends standing out:

*Metropolitan, micropolitan and Indian county populations have been growing while rural county populations, with a 20 percent decrease from 1990–2007, have continued their long-term decline.

*A corollary of the preceding pattern is that the highest rates of population loss have occurred in counties that already have very low population numbers.

*The contrast in population trends of metropolitan and micropolitan counties compared to rural counties is primarily due, first, to rural counties having higher out-migration than in-migration rates and, second, to the death rate exceeding the birth rate in rural counties.

*Compared to other NGP counties, rural county populations have a disproportionately small number of young adults and large number of older adults, which portends steeper rural population declines in the near future.

Land ownership and management

Retirement and mortality in the rural baby-boom population over the next two decades may lead to a massive turnover in land ownership and, potentially, change in land management, as increasing numbers of ranches and farms come onto the market. Four trends in land markets and management in the NGP stand out:

*The value of both cropland and rangeland has generally increased 10–15 percent or more annually over the last decade.

*Profits from agriculture have not kept pace with increased land values and thus, according to surveys within the region, the rate of return has declined by one-third to nearly one-half over the last two decades.

*A substantial and increasing number of land buyers—more than one-third according to studies within the region—are non-local and are buying for investment or recreational purposes, while many sellers are retiring and settling estates.

*Hundreds of thousands of acres of native prairie are being plowed and Conservation Reserve Program lands are going back into production, driven by agricultural subsidies, strong demand for biofuel feedstocks, and advances in crop and farming technology.

Nature-based economic activity

Our review of nature-based economic activities in the NGP revealed four conditions and trends:

*Although the NGP has captured a relatively small share of the national ecotourism market—less than 1 percent of hunting, fishing and wildlife viewing, for example—the last two decades have seen a rapid increase in ranch-based ecotourism (including hunting) businesses.

*Ecolabeling of grassland products has great potential in the NGP because of the extensive cover of native grasslands. However, such labeling is poorly developed and therefore almost no market differentiation exists for biodiversity-friendly beef production or other grassland products.

*The per-acre estimated values of ecosystem services generally exceed per-acre commodity rental values of the land; we estimate the value of selected ecosystem services in the NGP is $40.4 billion annually.

*Government programs aimed at conserving important ecosystem services through direct payment, conservation easements and fee-simple acquisition are seriously underfunded and failing to meet conservation needs and targets.

Landowners, businesses and local communities may be able to increase and diversify economic activities through three major categories of nature-based economic development: (1) Natural amenities, which include those natural features of the landscape that make a place attractive for visiting (e.g., ecotourism and hunting) or living; (2) Ecosystem products, which include commercial products harvested from native or semi-native ecosystems, such as native plant seeds and native vegetation, whether harvested directly as hay or

indirectly by livestock grazing; (3) Other ecosystem services, which include many services from healthy ecosystems for which no or only quasi-markets exist, such as provision of clean water, prevention of soil erosion, carbon sequestration and non-use services such as the value people derive from knowing wildlife exists and from conserving wildlife for enjoyment by future generations. The use of nature-based amenities, products and services for commercial purposes requires measures that ensure that they are supportive of biodiversity conservation on the lands being managed.

Recommendations

Development of these nature-based economic activities provides common ground for those interested in rural development and biodiversity conservation to work together. We conclude with the following ideas for fostering nature-based economic development in ways that also support the goals of biodiversity conservation in the NGP:

1. Fundamentally reform agricultural and biofuel policies in ways that fully recognize the value of native rangelands and the communities, ecosystem services, and biodiversity that depend on them.

2. Foster markets through the development of standards and guidelines, and potentially a certification system, for biodiversity-friendly grazing management.

3. Create ecotourism markets that reward landowners who conserve biodiversity.

4. Greatly increase payments for ecosystem services from private lands through both private markets, such as those being created for carbon credits, and direct government payments.

5. Greatly expand the system of conservation areas, both governmental and private, with a long-term goal of at least 10 percent of the Northern Great Plains in areas managed primarily for biodiversity conservation.

6. Foster a system of private nature reserves, both for-profit and nonprofit, through more supportive government policies and private-sector investment.

7. Expand support for tribal interests in biodiversity conservation that builds on the traditional intertwining of tribal cultures and economies with prairie wildlife.

8. Assure federal lands are well managed for biodiversity and ecosystem services, including a review of BLM [Bureau of Land Management] lands and national grasslands to determine where the public interest may be better served by managing them primarily for their biodiversity values.

9. Accelerate state and federal land acquisition and exchanges to improve management and protection of high priority areas.

10. Build a new rural development initiative that recognizes the importance of wildlife and healthy ecosystems for the well-being of local residents and economies.

11. Provide education and extension services that enable the modern private-land manager to manage their land and businesses in ways that are profitable and sustainable and that nurture ecosystem services and their economic benefits.

12. Redirect and expand research and monitoring by private and public institutions to provide the information needed to better manage private lands for the diverse values and NGP ecosystem.

“New Directions for the Prairie Economy: Connecting Conservation and Rural Development in the Northern Great Plains” is a publication of the World Wildlife Fund, Inc., August 2009. This executive summary is reprinted with permission. The report can be found athttp://www.worldwildlife.org/ngp under publications.

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