Prospects Ahead & Strategies for the Development of Rural Towns

When asked about suggestions on any improvements that would make Alnwick more desirable to visit, the proportion of residents that suggested improvement of the supermarket was 33%, parking (29%), shopping in general (17%), non-food shops (15%), bus service (8%), opening hours (5%), facilities for disabled (4%) and restaurants (3%).

61% of the out-shoppers for food were willing to shop in Alnwick if the supermarket is improved. 36% of the out-shoppers for non-food were willing to shop in Alnwick if shopping is improved.

These empirical findings have shown how personal socio-economic characteristics play a major role in the decision to utilize urban centers. There is a certain degree of expectation that a rural resident places on small urban centers and this varies between individuals according to their personal socio-economic characteristics.

rural nonagricultural enterprise which requires rural infrastructural development and are most likely to locate in small towns and market centers in order to gain access to other goods and services required as part of their backward and forward linkages. Second was the labor intensive rural public works that can provide jobs and satisfy the rural infrastructural needs such as roads, dams and irrigation, electricity, potable water, schools and other physical amenities. The maintenance activities needed to keep the infrastructure in proper condition can also create long term employment.

An interesting insight on the off-farm farming sector related industries can be found in the work of Broadway (2002). Broadway looked at the slaughtering industry in Great Britain and how it has evolved along with the changes in industrial hygiene regulations. In the past, slaughtering of cattle, sheep and pigs was an activity that could be widely dispersed with much of the work being completed in small butchers’ shops.

The demand for standardized products from restaurants, the hospitality industry and supermarkets, all of which have replaced butchers as consumers’ primary source of meat, has encouraged the emergence of highly specialized companies to dominate the slaughtering industry. In addition, stricter industrial hygiene regulations also played a dominant role in the rise of these specialized companies. It is interesting to note that Broadway’s findings indicate that despite these industrial changes, sheep and cattle slaughtering remains widely dispersed and only pig slaughtering has become more specialized with high level concentration in the western counties of England. The fact that these slaughtering activities remain dispersed is favorable to the effort to promote small urban centers. The economies of scale may still be unable to justify the escalations

in transportation costs and thus, these industries may find it more profitable to locate nearer the animal farms.

Broadway (2002) also looked at the rural farming communities throughout the Prairies and Great Plains in the United States that have sought to attract value-added processing of agricultural products as means of economic development. The availability of cattle in the area has attracted the meatpacking industry and created thousands of low paying jobs. It has boosted the local agricultural industry through an increased demand for animals and feedstuff. Dalla et al (2005) also looked at the food industry. They used more recent data and found that stable year-round employment in the food-processing industry is the most significant factor in attracting immigrants to the rural Midwest in the USA.

3.6.2 Participating in the Service Industry

Kilkenny and Gale (1999) suggest possible market opportunities that may allow rural areas to participate in the service industry. As consumers in urban areas are demanding more intangible attributes in their food products, they are willing to pay a premium for these attributes. An example of such an attribute is organic farm products. Business and communities can tap this opportunity by creating brands associated with their particular region, production practice or other attributes that may allow for premium pricing. Rural areas can also utilize the advances in information technology to be in direct contact with urban consumers in selling their products and services.

In addition, the base employment in the food manufacturing sector can create more employment opportunities through the multiplier effect. The presence of food

manufacturing leads to higher income for rural farmers due to higher margins arising from lower transport costs. The creation of employment also leads to creation of income for some members of the rural community. Both these activities result in higher income for rural people that increases spending and potential savings. Through the employment multiplier, food manufacturing will create demand through backward and forward linkages. Thus, despite generally low direct employment generation from food manufacturing, rural areas can still develop their economy through the employment multiplier effect. Rural areas should be able to tap this opportunity by supplying services to the food manufacturing or to further process the products of food manufacturing.

In addition, the increase in spending creates demand for more products and services. Rural areas should also be able to tap this opportunity. This can include the opening of services of higher quality that can satisfy the new demand from the employed rural population such as that of real estate, restaurants, supermarkets, entertainment, retailing and other services.

The potential saving can also be utilized by channeling them to finance investment in the rural areas. If we look at the rural area as an economy, saving serves as an important factor in the economic development of the rural area. The presence of financial institutions such as local banks plays an important role in keeping the surplus funds in the rural economy. Entrepreneurship is also an important ingredient in ensuring that surplus funds can be invested in the rural areas.

3.6.3 A Success Story from Thailand

Epstein and Jezeph (2001) looked at the Wangala area in Thailand and how the focused rural development project that utilizes the growth center has contributed to the rapid development of Wangala. According to Epstein and Jezeph, rural people usually prefer social cohesion in their small rural communities as opposed to the individualistic lifestyle prevailing in large cities. Therefore, to retain them in the rural area, access to sufficient income generating activities and reasonable standard of living are the necessary pre-conditions.

During the past 20 years, Wangala’s economy has diversified in terms of tertiary industrial development. Wangala has managed to sustain the service sector because of the sufficient demand from within the village and the surrounding areas. The farmers enjoyed the higher profit reaped from higher soybean price and initiated the establishment of soybean mill to cut the costs of transporting the soybean to the mills in the other cities.

The soybean industry eventually developed and the town is now equipped with modern banks, schools, traders, an extensive service industry and first class hospitals.

Development strategies included the strengthening of local community organization, expansion of off-farm employment and rural enterprises, strengthening of rural finance market and improvement of natural resources management.

Epstein and Jezeph (2001) cite other examples of rural-urban industrial linkages in Taiwan and South Korea. In these countries, the urban manufacturing industry that produce consumer goods and small goods mainly for exports, rely on small factories with low overheads. This is made possible by linking the factories with rural domestic productive units. Villagers come to the cities to be trained in operating the machines and

upon completion, the trained villagers return to their villages and use the machines for production on a hire-purchase agreement. To succeed, the rural area must have adequate infrastructure, which includes road networks, access to education, sanitary water, the primary health center, hospitals, banking and a stable supply of power.

According to Jezeph and Epstein, there are three levels in growth center strategies, which are the growth area, the growth center and the urban center. At the growth area, the strategy is to calculate the most effective and appropriate size of individual growth areas.

Then, the growth center as the nuclei of the growth area is established to perform a two-way socioeconomic relationship with surrounding hinterland villages and to link the villages with the larger markets. The growth center also provides formal services to the villagers. For the urban center, the network linkages with the growth center are very important.

From the success story of Thailand’s Wangala and the rural-urban industrial linkages in Taiwan and South Korea, we can observe the prospects in the development of small urban centers as growth centers for their respective growth areas. The key is to create a mutual linkage in human resources development that is facilitated by proper growth area strategy and adequate rural infrastructure.