Rural System, Inc.
 Sustained rural lands; sustained profits




A New BottomLine
Observations by Bob Giles

After years of searching among a brush-pile of alternatives, I have found the solution to how to gain a significantly improved environment for the people of the western Virginia region --Monterey to Martinsville and westward. More than "just another idea", the solution provides an identity for founder-locations, the region and its people, employment, and a new type of social and economic development. The solution is to operate a new, private, modern, sophisticated rural-resource-related enterprise. The enterprise is a regional band of small companies, a conglomerate. The solution uses the power of the people of the region, the scenic and undeveloped natural resources there, and innovations.

It took me too long to find the solution. There are few years left for me, but I am convinced of the answer and willing to invest time, energy, and some money if others will work with me for the good of the region. I'm willing to share the idea and adjust it for improvements. The time seems right, almost essential, to move to create a high quality of life in the region into the future. The way to do that is to adopt the concept of profit-oriented environmental management. For a real investment of a half- million dollars, within 5 years annual profits of more than twice that can be expected from such a regional enterprise. The concept is as basic as agreeing that in order to sustain profits from a factory, you have to sustain the factory.

I am not discussing factories but a large, diverse, complex system managed in a sophisticated fashion with the assistance of computers. It is not likely to be a blue-chip operation, just profitable at a steady 3-5 percent. But it can also stabilize the region, saving local people and tax-payers from the costs of unemployment, de-valued land and structures, and emigration that result from business and mine closures. It maintains the grand rural atmosphere while paying real-estate taxes. It is non-governmental and does not add taxes. It does things in the new-fashioned way ... it earns it by smart work! The regional enterprise system is an idea for people who sense the coming fossil energy shortages, who wonder how to improve very difficult decisions, and who want to use the Internet and computer power.

A Football Comparison

I think there is a lesson for the region that can be learned from the football enterprise. That enterprise is very large and diverse and includes tour buses, advertising, cheerleaders, stadiums, uniforms, publications, TV, ... and the football. The ball itself is essential, but almost irrelevant to the modern, profitable total enterprise. Similarly, a regional, environmentally-related, total enterprise can be created. The physical resources are essential ... but almost irrelevant.

By analogy with football, when it comes to the regional problems, we have had our eye on the ball too long. We have talked about trees, about coal, and complained about environmental regulations. We've been "brought up" to ask for government help. We are gripped by the limitations of the single "cottage industry." We have not pondered the potentials of an integrated regional enterprise. We have been independent landowners! But now we are threatened, and some individuals, even whole counties, are begging for help. We can be independent ... and dead. We need some group work. We can ask for major government help, but that has not been forthcoming, and there has been little change after 50 years of spending the little that has been provided. Adults in the region (only about 300,000 strong and emigrating, even with extra chads or fine legislators), can't vote their way out of a legislative cloakroom, much less a regional problem.

There have been problems in the region for many years but they now converge with new developments and ideas creating a brand new situation. I got my first glimpse of the potential years ago when I tried to answer the question from a coal-mining company in Virginia: "What do we do with 69,000 acres of mountain land when the coal is gone? (or after tobacco ... of the factory?)" The answer, not accepted, was to adopt a new paradigm, a new pattern of thought and work, a new way of seeing things useful to people. We need a whole, encompassing paradigm, with consistent linkages of energy and money for looking at the job for the whole region. I call it the Rural System paradigm.

The Good Region

Most people can list 20 major problems besetting the western Virginia region. Some of these seem to breed; some interact. There is no single cause for such problems. Finding one can be satisfying but rarely constructive. I tried to solve the problem for the 69,000-acre tract owner, following a concept of optimum farms and forests. I failed because I realized, very late, that we couldn't have an optimum farm in a sub-optimum region. There had to be a new design. My dad often said that "money talks" but I did not understand. Perhaps it is not too late. The new design is around making honest money ... over the long run, but doing it together, in many different ways, at the right scale.

As an example, we did computer studies and discovered that money could not be made consistently on small ownerships of marginal lands by raising cattle. We also found that money could be made from a large herd with common marketing, fencing, veterinary, and food supply support. Part of the solution was in how the cows were distributed and the great economies that could be experienced from shared and coordinated work with a few resources.

My concern then and now is for the people in the region in the near future. I must talk about resources, but my concern is for people closely linked to their landscape. There is, in my view, a cumulative degradation of the regional landscape and all that goes with it. Things do not seem to be getting better; they are not even staying the same. I no longer want to talk about that. My pessimism has disappeared in the bright light of the way out, the light produced by the potential for implementing the new paradigm - that of a new, private, sophisticated rural resource enterprise. Heavily involved with natural resources, the emphasis is on the potentials of the total rural system ... as a system.

The state and federal lands of the region are valuable assets. They are under management already but their budgets are unstable, staff demoralized and mobile, and entities to be supported and used with care and attention to their separate policies and interest groups. The private rural lands are separate and constitute a sleeping giant of a resource ready for care, restoration, and new developments.

A Working Platform

The private ownership of land can be viewed as a working platform, a place where a system works. It can be viewed (one way only) as a factory, a place from which products and services are created and delivered for money. It is a place where ideas, as well as seeds, germinate. The costs must be contained, profits assured by marketing, and the whole managed very well if profits are to be stabilized within reasonable bounds. It seems to me that I and other people have been talking about conservation and improved land management and land ethics for many years. Not much has changed. The desired conditions have not yet been achieved. Eventually we have to come to a precise statement of what we really want, at least a measurable criterion of of accountability for this. How will we know we have achieved such desired conditions? I think that the answer on private land must be for most people: when we have sustained reasonable expected profits over at least 150 years.

To do that we have to work from the platform, tend it well, shift with the times and markets, and hold or improve the soil, air,water, and biological base. But we need annual gains from many sources while we wait for the slow growing trees and slowly building soil to reach ages at which we know a profit can be made. We need a new concept of success, an image of the success of the total products and services from the land platform, the success of the total, long-lasting, rural resource system.

A Forestry Example

If we could develop such a paradigm and the enterprise that makes it real, then we could capitalize on massive investments already made in forestry. For example, even though millions have been spent on forestry research, foresters, and forest agencies, less than 20 percent of forest land in Virginia is now harvested under the guidance of a forester. All of the education, taxes, and pious conservation literature are silly in the face of this awareness. No more begging or pleading to "conserve" or whining about a land ethic; no more "grants." I have analyses showing how to double the profits made on most forest lands in the region into the far future if they are operated as a system! ... and still have wilderness, wildlife, and forests producing unbelievable benefits.

A Cattle Plus Wild Turkey System Example

My colleagues questioned why I as a "wildlife person" was studying how to graze cattle on benches of land in Wise County that had been stripped of its coal. Now we know how to produce livestock gains and prevent losses ... and simultaneously make gains for a wild turkey system, its young populations feeding on insects within and from the edges of such pastures.

A Soil Example

Soil is what people build on. It is what grows trees and feeds horses, people, birds, and beautiful things. In the region, landowners are losing about 16 tons of soil per acre per year. That has been going on for years but given little attention. It just has to be stopped! New awareness suggests that phosphorus, a key element in plant growth and human nutrition, is in short, declining supply and limited access. Within that eroding soil is phosphorus, a loss worth today about $32 per acre per year. Given the size of the region, the annual financial loss is staggering. Someone, a business, needs to get this loss under control in a region that is said to be in economic trouble. The key word is control, not just tossing around a "prevent erosion" slogan as in the past. We need to cut our losses and add value to the things produced. Soil-related businesses can do this; we need profit-oriented managerial control.

How the Enterprise Works

The new proposed enterprise is strictly voluntary and people may invest in it. There are over 50 groups or "divisions." A unit of the enterprise "rents" land from willing owners and improves it using peak scientific knowledge. We first concentrate on work with absentee owners who often need help in tending, improving their investment, and caring for their land. The enterprise manages and uses its resources for profit, sharing gains with the landowner, the county, and stockholders and employees. Having old elements of sharecropping and "cooperatives", the enterprise seeks to maximize profits over a dynamic 150-year planning period, one sliding forward each year. Not just involved with direct long-term production of trees from the land, as in the past, the corporation is as broad and diverse as the "football enterprise." It has over 50 separate but interdependent units or small enterprises, all with employees with personal incentives for seeking to make the greatest possible collective corporate profit ... but with a difference from the past ...to sustain that profit over time. This is not a "cut-out-and-get-out" operation. Some of the proposed units of the enterprise, all related and with centralized guidance, are:

...and many others, all supporting year-around activities, modern cost effectiveness, synergism, and appropriate continuous, dispersed employment.

Imagine 100 landowners in western Virginia renting their land to the proposed corporation. The tracts become somewhat like well-known public forests. There are, after 5 years, over 400,000 acres (large and small) under intensive management. Within them are pastures and ponds and streams. All are managed, trees are thinned, walnuts are collected and processed, hunts are managed, trails are built, fires suppressed, and the areas are used year-around by family, customers and tourists. On schedule, trees are harvested gently. Areas are replanted in superior tree species. Wood is made valuable by preliminary processing. Ponds are managed, fishing tournaments are held, and streams are improved along with their water table. Flooding peaks are reduced. Pastures are restored to rich conditions with secondary benefits to deer and other wildlife but also reducing stream sediments and feeding cattle, goats, rabbits, and geese that are bred for the conditions at each site. Beautiful gardens beside houses are notable on drives throughout the region. A few "Avi" signs appear, indicating areas for the new sport of birdwatching, similar to golf. Annual fairs and conferences are continually being announced for the many nature, wildlife, and garden organizations that have been formed. Small businesses produce specialty items. Residents work in all of these activities. Clusters of new residents are evident. They will have moved in for the rich environmental surroundings and diverse recreational opportunities as they develop and export software and engage in the educational, publications, website, and high-tech aspects of Rural System. Rich, meaningful at-home and regional activity opportunities and new computer-aided schools become available to youth and to "old-timers", many who are new residents.

The proposed enterprise has half of its groups that are office oriented. The other half works with trees, pastures, ponds and streams, but it is for the people of the region, clearly not just for logging trees that have grown large enough to cut for a little income (and no profit). It deals with the total rural environment and communities using the best of computer-aided land management, integrating that with ideas and diverse interests of the people in the region. It is sensitive to energy budgeting. It allows existing businesses to affiliate if they wish to, to become collaborators. It educates people for profitable roles within the organization and the region. It becomes seen as the jobs-place for the Internet-connected, home-employed people of the region's future.

What can the people of the region do in the face of high local taxes, agency cuts, reduced state and federal funds, fossil-energy fears, and slippage in an old economic base? Why haven't our past investments worked? Do we really need another government agency? Another one to "help"? Who will solve the growing problems? I see a way to start a region-enhancing program of working with the total rural environment for profit. It is pure capitalism. It has incentives for landowners, workers, investors, and governments. It's a free-market strategy fully integrated with global markets waiting for things that the region has to offer. The enterprise is "in it for the long-haul", no more boom-and-bust, only sustained profits within a healthy region. The bottom line is that launching soon a new, private, modern, sophisticated natural resource enterprise can solve the major problems of western Virginia and surroundings. I do not see another solution after spending 30 years looking for one.

Let's talk? Helpful reactions? More ideas? Start with pieces of the enterprise? There are some details at www.RuralSystem.com.

The author, Bob Giles, is a retired professor of the College of Natural Resources at Virginia Tech. Born in Lynchburg, he was a Virginia game biologist, studied in Ohio, taught in Idaho then in Virginia for 30 years, helped start the Powell-River Project in the coalfield, and has been chairman of the Blacksburg Planning Commission. He was a pioneer in computer-based land use planning with TVA and military lands, and in using computer-mapping systems.

Robert H. Giles, Jr.,
504 Rose Avenue,
Blacksburg, VA 24060
540-552-8672
RHGiles@RuralSystem.com
Perhaps you will share ideas with me
about some of the topic(s) above at

RHGiles@RuralSystem.com.

Maybe we can work together
... for the good of us all
... for a long time.

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