Dr. Glenda HumistonState Director, California RD

Collaborative

Economic

Development:

Building Momentum

with Lean Resources

July 28, 2011

A Broad Array of Support

• Funding for – Business & Cooperative Development– Community Facilities– Water & Sewer Systems– Single and Multi-Family Housing

• Loans, Guaranteed Loans, Grants

• Technical Assistance

• Staff Support for Applicants

January 2010 – 43 Forums •Over 1,000 Californians Participated

•Consistent Recommendations Offered Throughout All of California

•Strong Partnerships Emerged

January 2011 – 58 Forums •Almost 2,000 Californians Attended

•Gave Update on Activities and Shared New Economic Development Strategy

•Strong Support Received

•Many Requests for Collaboration

Report Recommendations

On-Farm Portion of Income

Off-Farm Portion ofIncome

SOURCE: USDA ERS

Composition of U.S. Farm Household Income by Source

CHALLENGES

• Increased Need for Off-Farm Employment

• Lack of Investments Directed at Rural Sector

• Credit Availability and Access is Limited

• Complex & Conflicting Regulations

• Workforce and Income Issues

• Infrastructure Deficiencies

OPPORTUNITIES• Improve Access to Healthy Food• Grow Regional Economies• Create Jobs in Value Chains• Provide New Energy Sources

HARVEST

WASH/PREP

PROCESS

MARKET

STORAGE

COOK

PACKAGE

DISTRIBUTE

BUTCHER

COOLING

CUT/WRAP

BIOFUELS

RENEWABLES

California Agriculture

77% of the Economic Activity is Off Farm

Agriculture Value Chain Opportunities

SOURCE: CA Center of Excellence

Agriculture Value Chain Opportunities

Biomass Value Chain Opportunities

• Value-Added Wood Products

• Slash Removal:

• Biomass Products

• Fire Reduction

• Water Production

• Wildlife Habitat

Manufacturing

On-Site Processing

•OSB •Pellets •Heat •Electricity •Compost•Biofuels•Polymers•Composites•Biochemicals

Save Cost of Fires, Insurance, etc.

Ecosystem Credits

Tourism

•Trucking •Manufacturing•Distribution•Storage •Repair•Management•E-Commerce•Support Services•And More…

California Bio-Energy Employers by Sector

Biomass Value Chain Opportunities

Creating Opportunities in the Knowledge Era

21%

Tertiary Occupations: professional, technical, managers, officials and proprietors; clerical, sales and service workers; etc.

37%

42%38%

4%

Secondary Occupations: craftsmen, foremen, operatives, repairers, truck drivers, etc.

Primary Occupations: farmers, fishermen, foresters, miners, etc.

Value Chain Infrastructure Allows Rural Regions to Exploit these Trends for Jobs and Economic Development

Percentage of Male Workers Employed in Each Economic Sector

58%

North Coast FoodSystem

Northern Sierra

BiomassProject

Central Sierra

Value-AddedLivestock

Port West Sac

Port of Oakland

Port ofStockton

Ports of L.A. &Long Beach

Southern California

RenewableEnergy

Fresno Kings Tulare

SOLUTIONS• Regional Collaboration on

Needed Infrastructure

• Strategies that Promote Investment in Rural Areas

• New Financial Tools

• Relationship Capital Among Diverse Stakeholders

• Empower Local Leaders and Institutions to Improve Policy

• Economies of Scale• Utilize Cooperatives

• Connect Local Food Access With Transportation for Export

No more than 2% of annual state job gains can be attributed to business relocations nationally while more than 95% comes from the expansion of existing businesses (nearly 42%) and the birth of new establishments (56%).Jed Kolko, “Business Relocation and Homegrown Jobs,” Public Policy Institute of California, September 2010

Collaboration Stretches Finite ResourcesRegional Exploits Economies of Scale

“Economic Gardening” nurtures the local economy rather than “hunting” for big business relocations.

•Help Existing Businesses Thrive & Grow

•Create Opportunities for Entrepreneurs

•Provide Value-Chain Infrastructure

•Improve Quality-of-Life Factors in Rural Communities and Regionally

Economic Gardening

Community Colleges &

Job Training

Economic Development Corporations

Venture Capital & Micro-Finance

Resource Conservation &

Development Councils

Micro Enterprise

Support BALLE

GoED

Local Government

State & Federal Programs Research

Institutions

NonProfits

Diverse Collaboration

CAMEOCooperative Extension

Financial Institutions

“Intangible Capital” Growing in All Sectors

Intangible Value as a % of Total Market Capitalization by Sector

The Pieces That Are Often Taken for Granted and Receive Little Investment

Coops Can Do Many Things!

Purchasing cooperatives include:

•Ace Hardware,

•The Bike Cooperative,

•Unified Grocers

•and many more.

Worker cooperatives include:

•small bicycle & book stores,

•small retail businesses,

•a fair-trade coffee roaster,

•a taxi company,

•an engineering firm,

•…and an adult theatre.

Look For Opportunity in New Ways

Bringing OUR Capital Home

LEVERAGING NEW MARKET TAX CREDITS (NMTC)

Direct

Public

Offering

California USDA Rural Development & the Federal Reserve Bank of San Francisco

FINANCIAL OPPORTUNITIES ROUNDTABLE

CalFOR aims to develop tools and strategies that will:•Mobilize capital markets •Capture local investment potential •Fuel regional economic growth

USDA Loan Guarantees

and Intermediary Relending

• Impact Investing• Expanded Use of Bonds

• Retirement Accounts Invested Locally• Program Mission Related Investments

•and ???

Adaptive Management