From The Grayson Initiative, Virginia's
Alternative for Visitors and Citizens
|Robert H. Giles, Jr., Ph.D.
College of Natural Resources
Virginia Tech, Blacksburg
What is it? This is a proposal to implement a new concept for replacing "tourism" for the good of Grayson County citizens, then the Region. It's called ranging, a new form of soundly-based, diverse, regional tourism and eco-tourism combined with most forms of outdoor recreation and sightseeing. Tourism is for outsiders; ranging is for outsiders and residents. It includes (but is not limited to) extensive outdoor recreation, hiking, tramping, camping, trekking, climbing, biking, trail riding, hunting, archery, fishing, boating, touring, sightseeing, watching and studying nature; but also outdoor projects, events, memberships, shows, contests, and games. It requires a superior environment. For that environment to exist and be sustained, there must be modern sophisticated management. Rural System, an enterprise now developing, can supply such management.
Tourism, as now promoted, tends to be narrow in scope, seasonal, costly, provides few financial gains for the county, often produces dissatisfactions, produces few desired jobs, and trespassing and disrespectful visitors bother local people.
Ranging is a complex activity for economic development for the county and its region. It clarifies Grayson as unique. It capitalizes on superior land management in and around the county, showing how a new conservation and education base for a diverse private corporation can improve economic conditions for businesses and citizens. It provides novel dimensions of culture, lifestyle, and quality of life for citizens as well as visitors.
Ranging is more than diverse tourism. It is a strategy of Grayson County to become recognized as the international center of a new activity and enterprise for:
Year around; 150-year planning horizon, sliding forward one year, each year, starting slowly but immediately.
Where Grayson County and surrounding areas, then the coalfields and eastward for Southside citizens.
The entire following partial list of groups of enterprises is described in the following pages and at www.RuralSystem.com:
A description is available of the conglomerate called Rural System that has over 70 potential units likely to be profitable when active and sensitively managed with computer assistance as a single system, a business conglomerate.
Proportions of profits (incentive based) to:
Identity Grayson County is likely to become known as "that ranging place."
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Rural System is the means to assist in implementing ranging. It is devoted to describing and eventually implementing a system of modern, soundly-based outdoor, rural, and natural resource conservation and management that supports a dynamic, diverse program of outdoor recreation and tourism that is internationally known and copied.
Rural System is the proposed enterprise for implementing the innovative concept. Started in Grayson County, Rural System, the private enterprise, a diverse "conglomerate," provides employment, financial incentives for sound resource management, and an operational center for much innovative outdoor recreation and related activities for citizens as well as visitors to the county and the region. That Grayson is a center for vital, safe, healthful, very diverse high-quality outdoor recreation becomes a major part of the identity of the county and its region.
"It's difficult to wrap your mind around it" has been said to us several times as we have discussed ranging with others. We think that we can explain it better than we have done in the past. The project is about five things all at once …
Each of these will be discussed and supplementary materials will be available through the Internet at www.RuralSystem.com
Repeating: Tourism is for outsiders, visitors from anywhere; ranging is for outsiders and residents. It is combined:
Ranging is more than just a bunch of activities. It requires a dynamic enterprise working to promote the concept, develop the ecological and environmental conditions and services for lasting profitability of such activities, and make the rewards of success notable. Highly successful ranging is dependent on region-wide natural-resource development and management that provides employment, a tax base, and improving quality of life for citizens of the region. Grayson County can become the home of this concept and its development. It can become a favorable topic by which it becomes well known.
A Proposed Conglomerate
Ranging presents a new concept but it is well grounded in some old ideas. Like many other good ideas, it has been around a long time but not recognized or properly pulled together. Tourism has been claimed to be needed in western Virginia and has been a positive economic element of some communities. We have seen many such areas throughout the world but we also know of many failures and struggling families who have taken bad advice. We present a concept and formulation so different that it cannot be recognized as any current form of tourism, thus requiring a new name. We have a formulation for success that includes key ideas of: includes
These are activities for tourists and other participants but also for local employment. Understand: implementing ranging is a county-building, economic development action. It has low capital requirements, is gentle on the land, and does not require "outsider" investment. Reasonable local investment is, however, needed.
Several brief "stories" may clear the pathway to the ranging concept. Some are insights, others evidence of how pieces of a puzzle eventually seem just to fall into place. I tell these here before I present the list of enterprises, the units of the Rural System conglomerate. A firm understanding of the concepts behind the conglomerate can help the list of enterprises seem very realistic and quite achievable. The stories that give special insights are: "The Logger," "The Coalfield," "The Consultants," "The Wild Animal Populations," and "Football."
Cutting through it all, the logger said after hearing about Rural System and ranging said: "Oh, all you're doing is providing the forest landowner annual income." It seems more than that.
A Virginia Tech faculty member (Giles) worked on a project in the Virginia coalfield (Wise County). The question presented for him was "What will we do with 70,000 acres of land when the coal has all been mined?" He sought to design the perfect farm/forest complex. After much work and computer modeling, he discovered that such units were uneconomical and that only when some great "economies of scale" were reached could things be profitable. He found that economies were available in a single system (like one for cattle or for a single crop), not in small groups of cows, but well distributed over the area and with centralized management, care, marketing, and product storage.
Another Virginia Tech professor often spoke of the reason why forestry was failing. It was because ownerships were too small. Operations were unprofitable, equipment too expensive, and timber harvests could not be rotated over the years to sustain either a reasonable cash flow or an operation.
The other thing he discovered (or simply "realized") that a perfect solution for one piece of land surrounded by failing neighbors and difficulties of many types was not a real solution. Regional action was needed to retain profitability of the single ownership, even if it was large. The seeds of the need for regional, diverse ranging had been sown. There must be economies of scale and effective regional action. It has to start somewhere.
Years ago it required legal action to get certain state and federal agencies to stop their operations because private businesses could do them as well or perhaps better and there were now markets for those products or services. This was part of the free market and private enterprise systems widely discussed. Within the realm of natural resources, there remain private opportunities now performed by agencies. One reason that there are few private activities within these fields is that citizens cannot compete economically with the size, scope, and financial backing of government offices. This situation is changing, can change more rapidly, and suggests new private entrepreneurial opportunities, at least partnerships.
Within some field of natural resource management, for example, there are few consultants. There are many reasons for this, but the insights gained in exploring the reasons behind the condition suggest key ideas within the proposed conglomerate, now called Rural System …
Centralized administrative control and services
Diversity of interests and ability to respond to challenges
High personal incentives
Economies to be gained with high technology and low capital equipment
Use of past research findings
Intensive use of computers, particularly computer maps.
The Wild Animal Populations
Students of wild animals and ecosystems soon learn that when prey (like rabbits) are abundant, then predators tend to increase. There is cyclic behavior, one species is up and the other is down. There is a kind of constancy, a steady state that can be seen when examined broadly. It comes from many animal species, many different densities, and adaptability. The example can be followed in businesses. "Dow" is a bad condition for rabbits and businesses and counties.
A major recommendation of economists is to "diversity your portfolio." The reasons for doing so are like those in nature for stabilizing animal populations. If an animal feeds off only one type of food and that food disappears, the animal usually goes extinct. Similarly, single-interest or single-product businesses often crash. A key idea of ranging and the proposed conglomerate is: diversify. That includes diversifying in time, space, and richness of offerings, and potential resource users.
The Football Analogy
The developing conglomerate uses the analogy of football. Of course, the leather football on the playing field is important, but the total football enterprise is very large and diverse. It includes uniforms, the stadium, food, drink, clothing, advertising, grounds, publications, fan clubs, and more. The ball is important but, compared to the greater football enterprise, it is almost irrelevant. By analogy, the tourist is essential, but in the context of a total regional rural recreational and viable economic land use system, the number may be almost irrelevant. Perhaps people in tourism and closely-related activities have had their "eye of the ball" too long. Perhaps just attracting visitors has not served us well and that it is now time to concentrate on the total rural and natural resource enterprise (or more broadly, call it the Rural System and ranging enterprises - achieving managed productive land, catering, lodging, equipment, products, organizations, guides, etc.)
The clear objective (and there is currently few for the public resource agencies):
Maximize within bounds long-term profits
The ranging conglomerate holds few limits. There is no agency saying restrict your thought and action; no overseer of definitions and proper work. The only limits seen are those of the legal system, ethical behavior, decent work, and profitable action … over the long run.
One of the most fundamental ideas within the ranging conglomerate concept is that of sustained profit making. The planning horizon is 150 years (the reasonable profitable life of the recently-planted forest tree) and it is sliding forward every year. Computer modeling and advanced accounting systems provide centralized, cost-effective services to the proposed members of the conglomerate. The long planning horizon tends to be unique and requires special discounting procedures for expected values. Special resource-related software as well as prognostic units are essential for managing the complex system and achieving a well-constrained investment strategy. No "blue-chip" enterprise, and still undergoing debates of optimum corporate structure, estimates suggest modest profitability at the end of 6 years.
The Elements of the Proposed Conglomerate
The above brief sections suggest the difficult pathway taken to analyze and discover the grounds for improving and keeping the great outdoors for the enjoyment and use by the people of Grayson County and its region. It requires a new concept, a distinctive term, a comprehensive activity and marketing both to citizens as well as to visitors. The concept is as simple as
|To have sustained profitable ranging, there must be abundant, satisfied, returning tourists and residents who must find safe, interesting, beautiful, diverse activities and opportunities, some of which are novel, others that change little. Quality ranging occurs within managed quality spaces.|
That's all! Grayson County can be such a space. The work is very difficult. Failures of the parts in the past are abundant … but successes for them within a system can be great. The means by which we can avoid failures and achieve successes for citizens as well as visitors to the County and region have been captured in the ranging concept as it can be implemented by Rural System. When implemented, at the end of six years, Grayson County will be well known as "that ranging place…." and in the same breath, they will include "…with its fantastic outdoor beauty, amazing activities and events, safety for families and challenges galore for others, opportunities for retirees, and where people come to learn how to really do superior, sophisticated, modern total land management."
One key idea (from the football analogy above) is that all of the financial income for the total system does not have to come from the tourists' pockets. That is why a total system has been created. Its objective is to make profits … but over the long run. By operating many small enterprises, all with low environmental impact and low capital investment requirements, all together, success can be achieved. Many of the planned small enterprises cannot be successful alone. There is sad evidence. The past work units were too small, capital requirements were too great, financial instability in environmental areas was almost assured, much work was seasonal, and there was no diversity to grasp opportunities or to sustain life during "slow" periods and while working staff also had to seek new contracts. These units, when operated within a single system, can succeed. It is possible to stabilize employment, share resources, capitalize on local talents, use the public resources that are available (the National Forest, the Appalachian Trail, and others) exploit the advantages of dispersed operations, use the Internet, use the results of millions of dollars of past research and development at Virginia Tech, use superior management, and gain advantages of planned synergism.
The proposed conglomerate corporation, Rural System is devoted to conservation and education. While making financial gains is intended, the financial gains do not go only to stockholders and members but to the participants and to developing the functions of the corporation. Later sections of this document attempt to clarify the questions of finance and to address the "bottom line." The enterprise is large and complex but it can be visualized (even with overlaps) as having:
The following list cannot display the linkages, overlaps, joint marketing, shared economizing, and planned gains or "extra-effects" for the unified system. The enterprise units are described separately later.
The Q Works
The Q Works (like "water works;" Q grows from concentrating on quality of life for citizens) is the diverse control center or "System Central," of Rural System. It is the administrative, management, and leadership unit that also provides the major economies for the other enterprises. By centralizing many services and functions (marketing, accounting, legal, computer service, library, insurance, transportation, rentals, etc.) the presence of this group overcomes the major reasons why similar enterprise-efforts have failed.
The separate but collectively-managed enterprises of the proposed conglomerate are:
The Q Works
1. System Base (Marketing)
2. The Wildland Knowledge Base
3. The Dogwood Inns
4. The Realtor Group
5. The Warehouse Unit
6. Youth and Adult Camps
7. Writers' Camp
8. The Memorials Group
9. The Tours Group
11. The Safety and Security Group
13. Software and GIS Group
14. The Energy Group
1. The Forest Group
2. The Certification Group
3. The Trevey
4. Fire Force
5. Walnut Vales
6. Holiday Trees
7. The Arborists
9. The Wilderness Group
10. Earshot (soundscapes)
12. The Foresters
1. Nature Folks
3. Coyote of Nature Folks
4. The Owls Group
6. The Plant People
7. The Butterfly Band
8. The Fishery
9. The Raccoon Group
10. The Furbearer Group
11. The Black Bear Group
12. The Bobcat Group
13. Official Avi (a birdwatching sport)
14. The Wild Turkey Group
15. The Covey (quail)
16. The Dogs Group
1. The Pasture and Range Group
2. The Gardens Group
3. The Yards Group
4. The Blueberry Patch
5. The Worm Corral
6. The Vineyards
7. The Goats System
8. The Rabbit Group
9. The Goose Flock
10. The Chestnut Group
11. The Bamboo Group
Sports and Recreation
1. The Wildland Crew
2. The 4 x 4 Group
3. The Wildland Walkers
4. Run Along
5. Tetra: a crosscountry race
6. The River Runners
7. Tree Tops
8. Novosports 9. The Biking Group
Products and Services
1. Rural System Tracts
2. The Old Codgers
3. Fog Drip
5. The Products Group
6. The Sculptors
8. Inquire: The Unified Laboratory
9. The Wired Ecosystem
11. The Fence Group
12. Belles and Whistles
13. The Pest Force
14. Competency: Performance Assurance
A major activity of the proposed conglomerate is that it brings certain private lands of the region under a specialized contract and manages and uses them for profitable developments in the other interconnected units of the enterprise. These are called Rural System Tracts.
Many of the enterprise units can be operated without contracts with private landowners. While recruiting private landowners and developing their lands for profitable uses is an important activity of Rural System, the enterprise offers services to any landowner and operates many organizations (merely with offices within the region). Some of the activities of these groups may first be conducted on public land (local, state, or federal lands such as those of the US Forest Service) and later on the private lands of the greater enterprise. Each is described in www.RuralSystem.com. A text is available.
The Rural System Tracts
Past efforts to do so suggest that Rural System Tracts are difficult to describe. Here we attempt a very brief sketch, then two scenarios. Rural System Tracts are private lands of owners managed under contract for them and the county and region by Rural System. They may be considered to be somewhat like little national forests or parks, but they are private and intensively managed since each is best fitted to achieve one or more of the objectives of the long list of enterprises.
Many of these Tracts may be lands of corporations. Some are lands of absentee owners. Most are larger than 50 acres but there are likely to be a few exceptions. Concentrating on forests, fallow fields, and lakes and ponds, the systems developed are to assist landowners to improve their "lands" (lands and waters, all resources), into profitable, well-managed systems that benefit their families or corporations as well as all of the people of the region. Careful attention is given to owner objectives and the limits they may place of full-scale profitability. Concentrating on the forests, attention must be paid to the surrounding fields and pastures, to the lakes and ponds, even the potentials for pest-wildlife in gardens. A "total system" is the view taken. Some lands may be in Trust.
Fundamentally, the big difference is that the landowner cooperator get annual income or its equivalent, rather than being the victim of "plant, wait 60 years, and then cut timber" which has produced the boom-and-bust cycle of the private small woodland owner of the region. Rural System Tracts are private lands of owners who willingly join Rural System and who allow their lands and waters to be placed under superior management and use in ranging. Annual profits are made, and their lands increase in value and environmental quality, and they participate in the development of the entire region. They are relieved of the difficulties, costs, arrangements, and required knowledge needed to protect and manage the resources of their lands for profit … sustainable. People engaged in ranging may continue to use their lands.
Scenario #1- A Rural System Tract Example
One person learning about Rural System suggested that it would be useful if we developed a scenario of what might happen if ranging was successful. She asked, what was I really thinking? What might it be like? "Telling more" conflicted with her admonition: "in one or two pages!"
Each ownership will be different, but it can be imagined that a family or company that owns land will voluntarily join Rural System. Absentee landowners and busy residents who work in towns will find it especially appealing. There are memberships for other citizens of the region as well.
Keeping in mind that there are many profit-producing units that are not field based, and some conducted on public lands (e.g., wilderness study experiences) and that these profits are being shared with the cooperating private land owners, it may be helpful to imagine an hypothetical tract of 180 acres. There are many large tracts of land, farms and forests, in the County and surrounding region. (There are many absentee owners who would like to have their land cared for and tended, lightly used, and improved in their absence for their families and their future. Diverse services are not now readily available.) Our early recruitment objective is to have under superior management about 50,000 acres.
Assuming one such tract or ownership (call it "North 1," and realize that with our computer systems and data we treat each tract as unique), the owner received $10,860 based on the financial provisions (described later). This amount had been asserted for him earlier, based on computer analyses. The Q Works paid the real estate tax on the forested and pasture part of the farm, leaving the funds for the daughter's wedding, new vehicles, or further investments in Rural System and the county's well being. Similar returns were likely every 2 years.
On the Rural System Tract, North 1, five acres were logged in small groups and re-vegetated and 30 trees were removed by individual tree selection. Three large basswoods were removed, sawn, and solar dried and later sold to The Sculptors. The emphasis: value-added strategies at most decision points. Ferns and ground plants that would be destroyed during the harvests were moved to the gardens of The Plant People. Emphasis: save or recycle. Forms were completed for SmartWood certification (value increases of about 5-8% without major investment). Roads were improved, water bars placed to stop erosion, and grasses planted for wildlife. Shrubs providing wildlife food (and spring flowers) were transplanted on the road edges. Brush was arranged for grouse, artificial grouse drumming "logs" were placed. Part of the old road was re-developed to lead to a trail system. One led to the Appalachian Trail. Emphasis: make profitable linkages.
The private trails, for both hikers and horses, were scheduled for use. Limited work by the trail safety patrols prevented conflicts found in other areas. During each of 100 days, two groups (12 each) of hikers walked the area during the year. Thus there were 2400 adult hiker-days, each at $35, resulting in $84,000 gross income or about $50,000 profit.
Three well-built, comfortable blinds were added for customers to add a wild turkey to their bird life list. This catered activity yield $1200, an $800 profit with partial owner return.
Thirty evening-catered "owl events" (described later) produced profits of $22,500. Twenty "fox events" produced profits of $15,000.
Deer hunters purchased managed-hunt-unit-days and produced a profit of $2000. Reducing costs and losses is as strongly emphasized as increasing production. Keeping deer populations under control is essential for forest regeneration and rare wild flower protection.
The Wildland Crew completed 2 projects on the area and provided financial gains for the owner of about $2000 (as well as the footbridge).
Anglers contributed $600, dog trainers contributed a modest $500.
A north-facing pasture was planted in hybrid red oak seedlings for the long-term future. The planted trees were fenced against deer and goats. The registered Toggenburg goatherd, its use rotated over the owner's pastures, was part of a region-wide dairy herd making his area look like part of the Swiss Alps. Profits for the owner varied each year with disease and milk price (about $5000) but stabilized when a cheese-processing unit formed beside an existing winery.
Close to the owner's home, youth raised domestic rabbits. Animals were computer- selected and Rural System provided stock and feeds. The rabbits were processed for meat, hides, bones, and garden soil additives. The local gains: $200. Rural System thus produced a substantial income, $98,600, 60% of which (i.e., about $59,160 annually) went to the owner, bringing the owner from having a costly and frustrating land problem with neighbors complaining about erosion to having a profitable role in a natural-resource enterprise. The enterprise improved the watershed of the region and benefited surrounding land and stream owners, provided a tax base, offered local employment, and, some said, was a financially realistic way to stabilize the well-known rural beauty of the County.
Scenario #2- Ranging and the End of the Day
A Tract sign goes up, the boundary is checked, and paint is added. Computer maps produced overnight provide new insight into the land production potentials and management needs. The farm pond becomes listed along with 50 others in a nationally prominent inland fishery. The pasture is weeded and fences go up to allow rotations of grazing to begin. Hand-held computers are used within the forest to produce an accurate inventory. The Trevey produces a management plan available from the Internet. Deer hunting zones (variable: half-day contracts; full-day; and 2-day contracts) are created and information becomes available to hunters on how the new area fits into the county level harvest potentials, both for animals, meat, and antler size. Wild turkey, a family favorite, is excluded from hunting on this Tract (owners' objectives are carefully studied). Youth and retirees tend one of five rabbit-raising facilities where animals are fed locally-grown foods and the fertile wastes are processed for the ranging Gardens.
Beautiful hiking trails are built, and, throughout the year, members of the Wildland Walkers with their colorful clothing are seen using the area and a few campsites. (Members pass knowledge tests and pledge to follow appropriate camping and trail behavior.)
A security force member hikes with the Wildland Walkers for a little ways, and then moves off to check on a suspected trespass. She disturbs anglers a little as she passes, but they too evidently hold membership in The Fishery and are intent on recording fish taken per unit of time spent in the recently-fertilized pond. Records, contests, sustained yield per investment are all part of many ranging activities.
Local lectures become available. A topic discussed (even at the major US conference held in the City recently) is that of sustained yield. It's a phrase often heard in Forest Service circles because there is a law requiring it on public land. ranging is for private land, but public lands are used in some activities. Rural System seeks to sustain profits. Sustaining a yield of a low- or no-valued product can lead to bankruptcy! Combined lasting profit production - that of a total system - is the intent within Rural System as it manages and assists in developing ranging.
The Safety and Security Group staff member walks by the area to be visited by The Owls Group that night. She is on the way to the potential trespass site. Combined work, shared tasks, reduced costs - these are the recurring themes within the System. The Owls Group conducts a nightly tour to a spot on one of the Tracts. A group of people, after a wonderful meal, are bussed from a Grayson restaurant to experience and learn about owls and their ecosystem, visit the tract, and see an owl "called-up" from the wild in the dark. After the excitement, a catered campfire with entertainment is held before the group makes a late return trip.
The profits are made for Rural System in the way the land is managed and creatively used. Some funds are used to rebuild the land and increase its productivity for the future. The work is with the animals and is enhancing, not exploitative. Cards, art, and photographs are available to the participants. Membership is offered into The Owls Group and a web site offers information, international owl-related tours, and insights into the environment and behavior of these fascinating birds. Some members add a new bird to their "life-list" of bird species seen. One member of the tour made arrangements for a CD - an e-book - to be developed by The Memorial Group on the great horned owl and published in the name of her father who loved the county woodlands.
Finding no trespass (reduced by her active surveillance), she returned to her car and passed by a group being introduced to the concept of a forest cooperative. She had heard Dale's message before - annual income, total system, certified SmartWood products, increased growth, value-added, local processing, solar drying, secondary products, enhanced hardwood ecosystems - high-tech solutions in the wildlands. Rural System employed local staff and created new activities. There were new organizations, part-time workers, and jobs for children. Internet education now included a new wildland contest on the Internet. There were emblems, tee shirts, a bright bandanna, and even a new hat, but these local "things" hid the profound underlying motives of the System. They hid the opportunities for county residents, for the stay-at-home folks, for those not very interested in the outdoors. They hid the group spirit, the "can-do" attitude, and the angry turn against wastes and abuses of the resources of the county. They didn't hide the welcoming of outsiders who wanted dispersed living, a return to nature, the healthy rural atmosphere … all the while they were participating in worldwide information systems and in globalization.
A forester finished his day's work. He had used satellites, computers and computer maps. He had found several plants of interest and drove to the office to report them. He passed by the Fire Force wrapping up training for the day. They were the new, proud "hot shot" fire-fighting unit for the region. (Imagine the costs of importing fire fighters [said to be superior] from the western states!) He passed by a dozen Tract signs, the single sign pointing to the nationally famous cross-country-run training trail, and two signs pointing to the Avi courses, the golf-like bird watching courses.
In the main office several people worked at computers. Some studied computer maps on the walls. A Forest Service scientist visiting from the regional office leaned over a computer making suggestions for changes in NED, a powerful new hardwood analysis and land-use decision aid. The local forester handed his plant information to a person who entered it into a data bank and a new map was automatically produced showing the actual and potential locations of the plant. It was a rare plant that could potentially require impact analyses, but the computer map spotted a site for a future tour for members of Nature Folks. In the corner, someone used unfit language in frustration as they assembled a book, the hundreds of pages of a Trevey "plan" or guidance document. Plans as "those dusty folders on the shelf" now had little meaning. Most people made their own copies or read significant parts of their personal land-use plan from the Internet.
There are many possible scenarios …
Getting to the Bottom Line
With high-minded secondary objectives for the environment, employment, county and regional identity, and a tax base, the primary objective of Rural System is to make sustained long-term profits. That is essential to sustain ranging at no cost to citizens. We can do so because of our design, clear objectives, clear personal incentives, intensive shared management, computer optimization, diversification, minimum capital requirements, abundant never-used research results, and new technology (some which is Internet-based). We can do this only if the environment is well managed. Someone said, "It's good work for the right reasons."
"What will it cost?" is a typical question asked about a typical project. Rural System is not typical. A cautious answer is provided below. Rural System potentiates investments in land. It "mines" millions of dollars spent on satellite technology and forestry and wildland research over 50 years. It develops a resource base for an uncertain future. It will provide inestimable public relations value for the county and its region. It reduces losses and has its own special security and limited fire protection program. It shows an alternative to agency management of land and current tax rates and destructive real-estate taxes.
Of course there are costs, but there are expected net returns (including yet-unquantified reduced risks) from investments. The cost of owning land is, at minimum, the annual tax burden on the landowner. Rural System can do very effective profitable work on thousands of acres for absentee landowners.
Venture Capital Repayment
Depending on inventory, adopted accounting procedures and policies, and the planning horizon, the estimated costs of system development can be paid over 6 years, with difficulty, exclusively from funds derived from the office-based groups. This is exclusive of the recruitment of Tracts and development of other groups. With Rural System Tracts in the conglomerate, profits are more assured. Profits from invested annual income from Rural System Tracts can likely far exceed the value of any managed wood harvested at the end of a long investment period on that tract. We are not seeking "charitable contributions from logging income," as someone suggested. The annual financial gains are pooled from
These gains include annual timber logging returns from Tracts described above. The owners of Tracts receive about 50% of the profits of the entire enterprise (these are tentative approximations and computer work is underway for the future). Based on the acres (a potential-production-weighted acreage based on an index (including site index, ponds, streams, roads, etc.)) within the participating land ownership, the owner shares in a proportion of the annual profits. The more money made, the more both enterprise and owners benefit, all subject to the constraints of sustained profitability and those imposed by the land and climate.
The 50% remaining after disposition of 50% of profits to the owners of tracts will be distributed by The Q Works (tentative and based on the description herein) as follows:
The advantages of the unusual organization also create problems. All groups have a common accounting service within The Q Works. There are real dangers characteristic of the "Tragedy of the Commons." Each group is independently managed and very distinctive. General leadership is offered; there is group process, but each manager is autonomous. Rather than building an enterprise, as in many other businesses, each manager is building profits since these bring group and personal rewards. The costs of The Q Works (for the entire enterprise including repayments, described later) are large. After a few years, all groups within the enterprise share these proportionally (above a fixed amount). An additional 20% of that amount is charged as cost and spent on approved costs of group enhancement and growth for each of the first 6 years. Salaries and benefits (low at first) are a high proportion and represent the major costs within each group. Merit raises are one of the expected cost increases. (Additional salary incentives are from the funds outlined above.) Each group pays direct costs for supplies, raw materials, and special services. The gross income minus these costs is the fund distributed by The Q Works (as indicated above).
Venture Capital or Line of Credit
Development capital is needed to implement all of the units or enterprises within the first 3-4 years for stability and continuous development. Most will be used for salaries. We believe that there will be individual investors having specialty interests in many of the groups, so a large single-source investment suggested as being needed may be misleading. Similarly, incentives from a "line of credit" allow work to progress in these new and unexplored ways with speed, reduced risks, and reduced interest charges. (A slowly developed, less profitable, and more uncertain venture may be discussed and options will be developed. The intent of this outline is to display the entire concept, its potentials, and expected future conditions and gains for the people of Grayson County.). We may cautiously add funds from the various properties and activities (intensive use of forests, pastures, facilities, and creative development of ancillary operations). Driven by incentives, the shared profits will build the enterprise. Most groups within the enterprise must be started at the same time or the unique, essential advantages of interactive work will not be gained and the enterprises will probably fail.
We have consistently been told: "start small." Poor "economies of scale" have caused many past failures. Too-small-scale is a fundamental problem being addressed. Nevertheless, modest, rather than total, development might be selected. It reduces risks in managerial skills but increases the risks of the total system failing to perform at expected levels. It delays the development of the total system by many years. Estimates made have been based on all units being operational. Making estimates for unknown combinations and permutations of the presented enterprise units is impossible. An evident strategy of picking the sub-units or groups from the above list that have the highest likely returns and lowest costs will not work, any more than creating an organism by combining a heart, a lung, and a nose. Estimates of both costs and gains are very difficult. Some groups, at least by the middle of the second year, will be profitable. Conservative estimates of the development costs, about $1,100,000, operating costs, and gains suggest breakeven after 6 years and 2-3% return shortly thereafter. These estimates, with many assumptions, are strongly influenced by an effective Q Works and by supportive ancillary units being developed well. Complete failure of any unit (though difficult to imagine) does not jeopardize the success of Rural System.
The financial analyses are complicated by assumptions about starting times and groups with which to start. All should be started at about the same time, depending on financing and securing enterprise managers. The plan is to secure an interested person, probably a future manager, and to "grow" the enterprise. All starting at about the same time will assure maximum positive interactions and the benefits of diversification. All are dependent upon The Q Works. Some comparable financial information is provided for similar or closely related activities but many groups shown here have never "worked" because they were never within a larger system. As always, a poor manager, a recession, or a catastrophe can deny any estimate of success. When each enterprise is described and its potential suggested, then profitability seems likely with the work also providing employment, youth activities, a growing tax base, continuing work to improve the quality of the environment … and beginning to expand throughout the region and into Southside and other parts of western Virginia.
Sophisticated Resource Management
The word, ranging, and the proposed conglomerate have been discussed. The last of the three main parts of this proposed ranging project is the topic of modern sophisticated resource management.
Using the gross analogy of the county as a factory, sustained profits from almost any factory require a clean, orderly, well-managed place of production. By analogy, high quality outdoor recreation and satisfactory tourism required a safe, clean, beautiful, stable or improving, non-threatening environment. Grayson County and the region have that now, and it can be improved, then stabilized with intensive management. We are of a notion, somewhat like that of the farmer who "ain't farmin' half as good as I know how." We know of few places where advanced techniques of natural resources are abundantly applied in a sophisticated manner backed by high technology and literally millions of dollars of past studies and research. We do know of special applications of pieces of knowledge and excellent demonstration areas for single phenomena and processes, but we know of no place where modern, sophisticated, decision-making is widely applied, where total systems management attempted. We cannot find where cost-effectiveness rules; we see merely efforts in achieving single-minded single- and paired-business efficiencies and partnerships.
We are not proposing research (for at least 5 years) for there are already more findings that need to be used than we can use in that period. We have a system design that can work. We propose to rely heavily upon geographic information systems of the Conservation Management Institute of Virginia Tech. We will use satellite-based locations in our fieldwork, and these along with field computers and new forest inventory software, can result in major forest resource development economies. We will use combined simulations and heuristic optimization for the diverse tasks encountered on different Tracts. Above all, we have the clarifying objective of profit maximization (but we hasten to repeat a major difference from typical business practice … profit from the total system over a 150-year planning period). We have new algorithms for vegetation transitions ("ecological succession") and for scheduling land treatments and timber harvests. We have watershed models, ways to map the upland soils, and ways to estimate and map changing "biodiversity." We employ feedback at most nodes, probably matching well with the much-discussed "adaptive management." We work at the regional scale, but have data about the conditions in very small land units throughout the region. We use the Internet to provide land-use plans to individual landowners, plans that contain the results of computer optimization. We provide analyses of populations of animals as pests (e.g., deer) or as much-sought hunted species. We have access to a large local as well as international library system and knowledge base. Working with premises of general systems theory, we are building a database about Grayson County and its region as the enterprise matures in concept and application. Waste of information is reduced; "re-discovering" is inefficient. We use advanced prognostic or forecasting software and procedures, even improvements for local conditions and processes. We can exploit the resources of Virginia Tech and other local colleges and universities as they may relate to the area, for now we have an objective, a format, and a process. We have noticeable payoffs (described above) for individuals as well as the region. As we have heard many times, "money talks." In work toward understanding and implementing ranging, we have designed a system that will provide money and many benefits to citizens. We have designed a means to stop begging for grants and gifts to restore and preserve the environment. We have dodged the tendency to ask for tax funds. In fact with maturity, funds are provided to the County. We have found a means to support and perpetuate the benefits from lands if they are placed under easements within existing programs. Herein we are not advocating creating such easements, simply the sophisticated management of rural and " wildlands" of the region. We have found a financial base for assuring benefits from regional beauty as well as from its commodities.
Hard Questions - Brief Answers
Why not start small?
Individuals may do so. The ideas here are available and people are encouraged to pick them up and run with them. Past efforts have failed because each, alone, has been too small, too costly. There were inadequate backups and returns were too low. Only with synergism - " the extra" from work together and shared resources over different seasons - can this work. Needs are immediate; many small investors can make it work. It is a big idea (but not a big stadium or big government project). It is of the right size for the county, the near future, and for the resources available - both financial and environmental.
Why can't we just hike and enjoy the region? Why add money to the issues?
Rural System encourages hiking or inviting people to see the beauties of the county and to use the resources here without spoiling or depleting them. It is a strategy for making money and shaping the county so that more money will be made more easily. It responds to high populations of people now living in cities, to single parent families, to lack of outdoor experience, to new demands for safety and security, to needs for knowledgeable access. There has been some poor land use in the past. We need to correct that, even make improvements and restorations. There has to be a new (low-tax) way to gain all of these things that people seem to need. Hiking, alone, will not pay the bills for the care and tending that is needed.
Why will people use private lands when there is so much public land?
If they come to the county and spend money in the enterprises of Rural System and affiliates few will care about the answer. If private lands of the Tracts cannot out-compete public lands, the "market" will speak. Few people know about the National Forests. They are not marketed. On private lands of the Tracts some people will find quality management, colorful and esthetically pleasing places, novel trails and experiences, diverse levels of use, information, safety and security, shared memberships, new friends and contacts for other experiences, and pride in participation. (There are others who will continue to use public and other lands.) Special use arrangements will be made for groups to use segments of public lands and waters. For emphasis though: the total enterprise of Rural System is the topic, not just hikers and sight-seers of the county land.
Why not get a grant?
We have a policy of attempting to be private, attempting to avoid taxpayer funding, and avoiding competition with and costs of doing business with agencies. We shall request foundations sponsor software development that may be used in other regions, to test the model of Rural System for other regions, to build integrative decision-support and expert systems, and to evaluate county-level resource changes under an entrepreneurial system. What about salaries? It will start with volunteers and low pay. This is strictly a personal-incentive-driven organization. To the extent that we "win," we all get higher pay. We, the enterprise, start pay with low salaries but, unlike other "outdoor jobs" that are sought by many people, the conglomerate has no salary ceiling and massive incentives. Few jobs will provide such knowledge and a feeling that genuine good is being done for so many people over so many years. Investors will be attracted even though initial gains will not be great. For them, there will be developed tax advantages. Citizens, however, may find the investment very desirable. There will be "dividends" or interest on loans made to the system. There will be membership rebates, reduced costs, and many special personal advantages. Does it compete with local companies? We believe it will enhance and add to the profits of local companies. We have a means by which they can affiliate, participate in our marketing, and share sales and services for the people to which we respond. We are willing to discuss opportunities with local people and businesses and do not seek to compete with but to complement and add to the gains of existing and developing groups. We plan to add to and employ the Internet-linked equivalent of many "cottage industries" and companies throughout the region and expand their markets and their profits via our e-catalog. Sounds communistic!? Collective farms, shared resources, and all that. Is it? No. The enterprise displays a paradigm of a free-enterprise-based regional economic development system centered on modern, sophisticated rural-land and natural resource management for the 150-year sliding future. It seeks voluntary cooperation among landowners. Its message is "money talks" and if the land and its managers and neighbors do not say "profits," the enterprise may not be working. Sustained profits are the quest but, regrettably, "cut and get" may prevail. We believe that managed land sale value will exceed the value of desecrated lands and we believe we will soon have the numbers to prove that. Nevertheless, a combination of strategies in land taxation and regulations may be needed to assure desired land use for the future. What if it fails? Any enterprise can fail for one or several of many reasons. Low capital investment and facility requirements suggest that the fall will not be very great. It needs to succeed. There are few alternatives that will serve the entire county and region. Current land use and natural resource management now seem to fail by several criteria and new direction is needed. Several people have asked: "How do we start?" No humor suggested, the answer is: "as if to describe an elephant … anywhere that you want to." There are many ways to get started and selecting the best one has risks. Potential investors, managers, and landowners are invited to begin discussions. Enterprises now involved in the units listed may be interested in cooperative arrangements, a startup-coalition. You are encouraged to ask questions and call or write Bob Giles at 540-552-8672 or email RHGiles@RuralSystem.com. A visit can be readily arranged. He will gladly address interested groups.
Appendix- Notes, February 7, 2005
Ranging is an application of well-known concepts of outdoor recreation, ecology, and marketing. It attempts to avoid some of the difficulties of current rhetoric about the needs for "stimulating tourism." The need is to create a ranging system. The characteristics are:
|Last revision: February 8, 2005|