Transcripts

"Farm Town Futures"-The New Homestead Act

GHARIB: Paul some have called the nation's heartland "the empty quarter." Its vast farms produce a bounty of wheat and corn, but many of its rural areas have been losing population for years. As we continue our series "Farm Town Futures," Jeff Yastine reports that many people believe a new twist on some old legislation might help draw people to the heartland once again.

JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: For most people, this is "fly-over" country, the sparsely-populated agricultural heartland, where jumbo jets leave condensation trails in the sky. And on the ground, there has been a constant trail of departing residents; many of these rural communities in the Midwest have been in decline for decades. But now new settlers are coming into town, encouraged by a revival of the entrepreneurial spirit that built this country in the first place. Encouraging entrepreneurs to create small businesses in the windy open spaces of the Great Plains is one thing, but some think that more help is needed from Washington. And for the first time help could be forthcoming, in a piece of federal legislation called the New Homestead Act.

It's broadly based on the original Homestead Act, approved by Congress in 1862. Back then, it offered an incentive, land, to people who were willing to farm the property for five years. Now, the New Homestead Act offers its own incentives for people willing to start businesses in rural areas losing population over the past decade. The act repays up to half of recent graduates' college loans, provides tax and savings credits, and seed money for start-ups. Nebraska Congressman Tom Osborne co-sponsored the legislation.

REP. TOM OSBORNE (R), NEBRASKA: I think people out in this part of the world are beginning to understand we can't continue to do things the way we've always done them, just continue to raise No. 2 yellow corn is not going to support one family on 160 acres like it did back in the 1930s. So we have to look for some other things and I think people are understanding that.

YASTINE: Experts say the New Homestead Act could help attract some people back to slumping rural areas. It also represents a departure from decades of government policy.

JOHN ALLEN, DIR., APPLIED RURAL INNOVATION CENTER: If you think about in the United States, we've correlated rural policy and ag policy. We've basically taken public dollars and funneled those into agriculture with the idea that if ag did well, rural would do well. That hasn't been the case for some time.

YASTINE: Versions of the New Homestead Act were introduced in the House and Senate last year. Neither bill has made it to a vote yet. But Midwesterners are hopeful the legislation, along with homegrown efforts at creating small business, could represent another step in bringing people back to the rural areas of the plains. Jeff Yastine, NIGHTLY BUSINESS REPORT, Columbus, Nebraska.