April 27, 2000 / BY BILL HORD / WORLD-HERALD STAFF WRITER
Kansas City, Mo. - For a quiet guy, economist Mark Drabenstott is starting to make a lot of noise.
The former Indiana farm boy's analyses of the rural economy are rallying some policy watchers to new thoughtfulness about how to revive small towns. The same reports are provoking others to battle.
By being blunt, the articulate 6-foot-6 economist has landed in the middle of a debate over concentration in agriculture. And Drabenstott, 45, will take center stage today and Friday, when the organization he heads, the Center for the Study of Rural America, hosts a conference in Kansas City.
Featuring keynote speaker Alan Greenspan, chairman of the nation's central bank, the event is expected to attract 200 invited economists and policy experts. Just the conference's title - "Beyond Agriculture: New Policies for Rural America" - has raised eyebrows among rural economists who advocate family farms.
Controversy has followed Drabenstott and the Center for the Study of Rural America, which the Federal Reserve Bank of Kansas City formed last year.
"There's no doubt it's a lightning rod," said William Heffernan, a veteran rural sociologist at the University of Missouri, whose advocacy for small farms makes him wary of Drabenstott's new center.
At the heart of the center's focus are Drabenstott's reports and speeches about the new "supply-chain" agriculture, which relies on alliances between producers, processors and retailers. In some cases, such as the poultry industry, farmers essentially become employees of big food companies that dictate what they will produce and how they will produce it.
Heffernan, among other observers, believes the new rural studies center could influence public policy in a way that would hurt small family farms, reaching far beyond the Federal Reserve Bank of Kansas City's seven-state district. It is the only such rural studies center in the Fed's 12-bank system.
The conference will feature presentations on rural issues and a closing panel to draw conclusions.
"We hope to make a difference," Drabenstott said. "There's been an enthusiastic response to our efforts."
To some, the Fed's efforts are long overdue. "In the '50s, we needed schools of agriculture; now we may need schools of rural development," said John Allen, a rural sociologist with the University of Nebraska-Lincoln.
Allen said Drabenstott is sensitive to the plight of rural Americans who are not benefiting from the nation's robust economy. "Some of these are ag producers," he said, "and some are not."
But to others, Drabenstott's focus and the broad influence of the Federal Reserve Bank are worrisome.
"Any time you get the Fed behind you, there is concern about whichever way things will tilt," said Neil Harl, a noted Iowa State University economist.
The Federal Reserve system, created by Congress in 1913, serves as a regulator of banks, a central bank for banks and the government's bank. It has responsibility for maintaining a strong U.S. banking system.
Drabenstott's rural center will take on added significance as 2002 approaches. By then, Congress must decide what farm policy will follow the seven-year phaseout of subsidies adopted in 1996.
The theme of the conference has prompted a group of economists and rural sociologists - whose mission is to protect small, independent farms - to plan a separate "retreat" this weekend, also in Kansas City, to counter the impact of the conference.
The retreat, sponsored by the Organization for Competitive Markets, will have its own credibility, with Harl, Heffernan and other noted family-farm advocates in its camp.
Michael Stumo of Winsted, Conn., the organization's lawyer, said the retreat will focus on ways to put resources into the hands of family farms.
"We think the retreat will stake out a preferred vision for a farm and the food system," Stumo said.
That vision will be different, he said, than the one that Drabenstott predicts for the future. "His past writings make it very clear that he is unabashedly biased against a decentralized food system," Stumo said.
In a recent newsletter, Drabenstott wrote about "the New Agriculture" that forms tightly orchestrated links between production, processing and marketing."
Harl, for one, is concerned by Drabenstott's acceptance of concentrating agricultural production in fewer hands, dominated by big food companies.
"This has been the agenda of agribusiness firms for a long time," Harl said. "I'm not at all convinced that that kind of structural change is in the best interest of consumers, and certainly not producers."
Drabenstott said he is simply being objective about what is happening in rural America: "In some cases, it's a matter of some people not liking the messenger."
The bottom line, he said, is that producers need to become more effective players in the supply chain.
"They can look at it negatively," Drabenstott said, "but that doesn't need to be the case."
Some people in small communities appreciate Drabenstott's candor, as well as his hard work, precision and grasp of rural issues.
"He is quick to point out our potential weaknesses as well as strengths," said Lisco, Neb., banker Tom Olson, "and that is important to his listeners. He puts candor over wishful thinking."
UNL economist Roy Frederick first met Drabenstott nearly 20 years ago, when the Indianan first joined the Fed. Drabenstott had completed his doctorate in economics at Iowa State University.
"From the very get-go as a young whippersnapper, Mark was articulate and sure of himself," Frederick said. "He's as broad-based as any economist I know."
When Drabenstott recently spoke at a UNL event for agriculture educators, his presentation was nearly flawless, Frederick said. "Beyond being a talented public speaker, he has something to say."
Even Drabenstott's policy critics, including Heffernan and Harl, give him high marks for character and hard work.
"He's not a mean-spirited fella at all," Heffernan said. "He really does have social concern."
Harl recently nominated Drabenstott for an alumni award at Iowa State.
John Marinowski, chairman of Iowa State's economics department, said Drabenstott and the Center for the Study of Rural America can perform an important service by focusing attention on rural policy.
"He understands the trends that are occurring out there," Marinowski said, "and he is not afraid to share that and to be objective and honest about what he sees.":
