Hibbard 2013

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The New Natural Resource Economy:

Environment and Economy in
Transitional Rural Communities
a b
Michael Hibbard & Susan Lurie
a
Department of Planning , Public Policy, and Management,
University of Oregon , Eugene , Oregon , USA
b
Institute for Natural Resources , Oregon State University ,
Corvallis , Oregon , USA
Published online: 30 Nov 2012.
To cite this article: Michael Hibbard & Susan Lurie (2013) The New Natural Resource Economy:
Environment and Economy in Transitional Rural Communities, Society & Natural Resources: An
International Journal, 26:7, 827-844, DOI: 10.1080/08941920.2012.720358
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Society and Natural Resources, 26:827–844
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ISSN: 0894-1920 print=1521-0723 online
DOI: 10.1080/08941920.2012.720358
The New Natural Resource Economy: Environment

and Economy in Transitional Rural Communities
MICHAEL HIBBARD
Department of Planning, Public Policy, and Management,
University of Oregon, Eugene, Oregon, USA
SUSAN LURIE
Downloaded by [West Virginia University] at 02:34 11 March 2015
Institute for Natural Resources, Oregon State University, Corvallis,

Oregon, USA
Recent developments in resource management suggest an important opportunity to

address the declining socioeconomic health of rural communities struggling to fill
the gap left by the transformation of primary production in agriculture and natural
resources. Commodity production creates direct links between producers and urban
centers, bypassing rural communities and making them economically redundant. A
range of activities have emerged in the last 20 years—watershed restoration, com-
munity forestry, sustainable agriculture, and ecosystem services, for example—that
constitute a ‘‘new natural resource economy’’ (NNRE) that can help diversify rural
economies while also enhancing environmental, social, and cultural assets. Constitu-
ent components of NNRE have been studied, but there has been no attempt to map
the whole territory. In this article we report the findings from a scoping survey and
three case studies, as a first cut at describing the NNRE economic sector and
identifying barriers to its development.
Keywords community economic development, community resilience, healthy

environments=healthy economies, multifunctionality, natural resource manage-
ment, sustainable rural economies
One of the most interesting challenges for environmental planning and natural
resource management in the early 21st century is the declining socioeconomic health
of rural communities. It is a concern across the developed world. In 1950, the popu-
lation of the world’s more developed countries was about evenly divided between
urban and rural dwellers; the estimate for 2007 is 75% urban and 25% rural. In
the United States, the rural population declined from 35.8% of the total in 1950
to 17.7% in 2007 (United Nations 2007). The relative decline of the rural population
has been accompanied by relative socioeconomic decline. A study of 176 Australian
Received 24 October 2011; accepted 1 July 2012.

Research for this article was supported by a grant from the Ford Family Foundation,
Roseburg, Oregon. An earlier version was presented at the 52nd Annual Conference of the
Association of Collegiate Schools of Planning, Salt Lake City, UT, October 13–16, 2011.
Address correspondence to Michael Hibbard, Department of Planning, Public Policy,
and Management, University of Oregon, Eugene, OR 97403, USA. E-mail: mhibbard@
uoregon.edu
827
828 M. Hibbard and S. Lurie
regions between 1976 and 1991 found substantial differences in incomes and wealth
across the rural–urban divide (Walmsley and Weinand 1997). A United States–Japan
comparative study found that in both countries poverty has become the norm in
communities where the economic base is in primary production (Fisher 2001). In
the United States, Castle et al. (2011) found a growing divergence over the last 40
years. The gap in earnings per job between metro and non-metro workers was
26.3% in 1969; by 2008 it had increased to 32.9%. And Kilkenny (2010) reports that
the median household income in rural U.S. counties is less than two-thirds that of
urban households, and the median value of a rural home is less than half that of
an urban home.
How are we to explain rural decline? Not all rural communities are in decline, of
course. Those located in amenity-rich areas are experiencing unprecedented growth
as centers for tourism, recreation, retirement, and long-distance commuting
(Matarrita-Cascante et al. 2006; Nelson 2001). But the economy of most rural areas
centers on primary production in agriculture and natural resources; they are
struggling.
Through most of the 20th century rural communities were tied economically to
primary production. However, the rise to dominance of commodity production—the
industrialized approach to agriculture and natural resource management including
specialization, standardization, and consolidation in pursuit of increased efficiency—
in the latter part of the century transformed the rural economy. It disconnected pri-
mary producers from rural communities. Commodity production encourages direct
links between producers and urban centers, bypassing the rural communities that
were once essential to primary producers. Thus, many rural communities have been
uncoupled from the larger economy and made economically redundant (see, e.g.,
Lyson and Guptill 2004; Cochrane 2003; Robbins 2000; Stoll 1998; Hirt 1994). They
are struggling to find new economic bases to fill the gap left by the transformation in
primary production.
Recent developments in environmental planning and resource management
point to an important opportunity. Activities over a wide range have emerged in
the last 20 years—watershed restoration, community forestry, sustainable agricul-
ture, value-chain differentiated products, and ecosystem services, to mention several
examples—aimed at more environmentally sustainable agriculture and natural
resource management. They also have important socioeconomic implications for
the rural communities in which the activities are carried out. They have the
potential to constitute the beginnings of one element of a new rural economic base,
a ‘‘new natural resource economy’’ (NNRE) that can help diversify the economies of
rural communities while also enhancing their environmental, social, and cultural
assets.
The activities and businesses that comprise NNRE may not be new; what is new
is accounting for them collectively as an emerging economic sector in its own right,
one that can help diversify rural economies and increase local resilience as a comp-
lement to the traditional natural resource economy. Our aim in this study is to begin
that accounting. Although many of the constituent components of NNRE have
received a good deal of attention, there has been no overarching analysis, no attempt
to map the whole territory. That is the purpose of this article: We use the findings
from a scoping survey conducted in Oregon in early 2011, along with three in-depth
case studies, to make a first cut at describing NNRE as an economic sector and at
identifying barriers to its development.
The New Natural Resource Economy 829
In the following section we define ‘‘rural’’ and discuss the socioeconomic

implications of the rise of commodity production. Next we explore ways of thinking
about community resilience in the context of well functioning ecosystems as mutually
reinforcing elements of NNRE. We then examine NNRE in practice, through our
scoping survey and case studies. Finally, we discuss some problems and opportu-
nities in the development of NNRE.
The Rural Dilemma

As a starting point, it is useful to briefly discuss what we mean by ‘‘rural.’’ Defining
rural has been a surprisingly thorny project. Gilbert (1982) observed more than 25
years ago that there is a tendency to think of rural as a residual—anything that is
not urban. That approach doesn’t get us very far toward a substantive understand-
ing of what it means to be rural. Black (2005) has identified three types of definitions
of rural in wide use:
. Sociodemographic characteristics, such as small settlement size and low population
density.
. Predominant forms of economic activity and=or land use, such as farming, grazing,
mining, and logging.
. Sociocultural characteristics, particular values and kinds of social relationships.
However, there are difficulties with these approaches. For example, population size=
density would seem to be very concrete, yet different U.S. government agencies use
different measures of size=density to distinguish ‘‘rural’’ from ‘‘urban’’ or ‘‘non-
metropolitan’’ from ‘‘metropolitan’’ (ERS n.d.).
Rather than a precise definition, Michael Bell (2007) offers a more helpful
approach for our purposes. He posits that ‘‘rural’’ has two dimensions, materialist
and idealist. In the materialist sense, rural is characterized by low population den-
sity, primary production, and closeness to nature—‘‘the rural everyone knows as
rural’’ (408). In the idealist sense, rural is a set of associations, the perceived rural
influences on people’s lives regardless of where they live. Examples of rural influ-
ences include the value of neighborliness, self-sufficiency, and fear of isolation.
The shifting rural economy threatens rural communities in both of Bell’s senses
of the meaning of rural. The economic history of rural communities in industrialized
nations broadly parallels that of cities.1 The industrial revolution shaped agriculture
and natural resource extraction in much the same way it shaped manufacturing.
Prior to industrialization, both were characterized by small, individually owned
operations—craft-based workshops in the case of urban manufacturing; small farms,
timber lots, fishing boats, and the like in the case of the rural economy. The techno-
logical advances of industrialization brought specialized production, vertical inte-
gration, and ‘‘scientific management’’—‘‘commodity production’’—to agriculture
and resource extraction as much as to manufacturing.
Initially, small towns and rural communities served the needs of primary produ-
cers. However, as commodity production took hold, the substitution of capital for
labor, product specialization, increased scale of operation, and consolidation of
ownership allowed for vast increases in output with decreased labor inputs. Essen-
tially, commodity production takes fewer farmers, loggers, miners, and ranchers to
produce more wheat, timber, minerals, and beef. Accompanied by improvements
in transportation and communication, the result was a disconnect between primary
producers and the local communities on which they once depended (Hayter, 2003;
Hibbard 1999; Tonts 2000). For example, at the turn of the 20th century farmers
made up almost one-third of the American population; their income was one fourth
of the gross national product (GNP); and their output was primarily for the dom-
estic market. Additionally, a major part of U.S. industrial output was in the manu-
facture of agricultural equipment for the domestic market. In stark contrast, today
farmers are less than 5% of the population; their output is less than 5% of GDP; and
they are a minor market for American manufacturers. All this is despite the fact that
agricultural output is at record levels and a major portion of that output is for world
markets (Hibbard and Römer 1999). Similarly, after a long upward secular trend
over most of the 20th century, forests and forest communities have been in decline
since the 1980s, buffeted by changes in markets and technology, changes in envir-
onmental values, and changes in public policy related to the management of both
private and government lands (Hayter 2003; Hibbard 1999).

Since the rise of commodity production, poverty rates have consistently been
higher in rural than in urban areas (Weber et al. 2005). Partridge and Rickman
(2006) attribute this to local economic characteristics, especially labor market con-
ditions characteristic of commodity production. Rural people accept the reduced
standard of living associated with commodity production, seemingly because they
value both dimensions of Bell’s definition: the material characteristics of low popu-
lation density, primary production, and closeness to nature; and the rural influences
on their lives. Thus, many rural communities are seeking ways to rebuild their econ-
omic base around agriculture and resources. To do so, they are searching for new
ways of thinking about and using resources, a new natural resource economy.
Multifunctional Landscapes and Community Resilience

There has been an important convergence recently between scholars, policymakers,
and practitioners working in community development on one hand, and those
involved with environmental planning and natural resource management on the
other. It begins with the observation that there has been a shift in the use of rural
landscapes. Nature is the key asset of most rural communities—timber, water, soil,
and minerals, but also wildlife habitat, recreational opportunities, and the like.
Under commodity production, nature is managed with a primary—some would
say exclusive—emphasis on the production of food, fiber, lumber, and other com-
modities. The decline of commodity production as the economic base for rural com-
munities is leading to a rethinking about the human uses of rural space. There has
been a shift from the dominant use of rural landscapes for production toward a more
complex and often overlapping mix of uses—production, consumption, and protec-
tion—that scholars have termed multifunctionality (Holmes 2006; see also Wilson
2010; Brunson and Huntsinger 2008; Smithers et al. 2005).
Multifunctionality has important implications for rural communities. Drawing
on the resource base for uses other than commodity production enables a more
diverse rural economy. It also enables uses that support the environmental as well
as the economic health of the local community. For example, there is accumulating
evidence of the local socioeconomic benefits of ecosystem restoration. Hibbard and
Lurie (2006) found that every dollar in administrative support received by local
watershed councils from the Oregon Watershed Enhancement Board brought an
additional $5.09 to the local economy. Hjerpe and Kim (2008) found that fuels
reduction programs on five southwestern national forests generated 500 jobs in 2005.
Most recently, Nielsen-Pincus and Moseley (2012) found that each $1 million
invested in forest or watershed restoration generates between 15.7 and 23.8 jobs,
and between $2.1 and $2.4 million dollars for the local economy. All sectors of
the local economy benefit as the investment dollars circulate through it. Hibbard
and Lurie (2006) estimated a multiplier of 1.7 from restoration activity. Nielsen-
Pincus and Moseley (2012) calculated multipliers in the range of 1.4–2.4, depending
on the nature of the project.
In addition, the concept of payment for ecosystem services is growing in impor-
tance. For instance, utilization of ‘‘natural’’ hydrological services such as water
filtration and purification, flow regulation, erosion and sediment control, and habi-
tat provision have been shown to reduce capital, operation, and maintenance costs
for water utilities and their ratepayers (Postel and Thompson 2005).
The consolidation and vertical integration that characterize commodity pro-

duction in agriculture have also stimulated new ways of utilizing resources. In the
well-known case of beef production, four packers (Tyson, ConAgra, Cargill, and
Farmland) control over 80% of the North American beef commodity production
market (Hendrickson et al. 2001). Many producers of grass-fed beef have emerged
in response, from the family-owned but gigantic (150,000 acres) Hearst Ranch on
the central California coast, to marketing coops such as Country Natural Beef and
Tallgrass Beef Company, to individual ranches around the country. In managing
their ‘‘working landscapes’’ to meet the Department of Agriculture requirement that
‘‘grass-fed’’ cattle be fed only grass and forage, these operators must also address such
issues as soil and water conservation, and protection of wildlife habitat (USDA n.d.).
This is an example of the agriculture of the middle (Stevenson and Pirog 2008).
These producers generally target local or regional markets and do business with local
and regional suppliers, distributers, and wholesalers. In contrast to commodity pro-
duction, which operates at too large a scale to benefit the local economy, and
very-small-scale producers such as community-supported agriculture units (CSAs)
and farm stands, which operate at too small a scale, the agriculture of the middle
can contribute to a community’s economic and social health and builds local culture
and institutions (see, e.g., Barnes and Hayter 2005; Besser 2009).2
Consistent with the concept of multifuctionality, these are all efforts to build on
an expanded conception of the potential of the rural landscape and its resources to
support communities, opening the field for a new natural resource economy (NNRE).
NNRE views rural regions and their resources as assets rather than as inputs to pro-
duction. It draws on them for production, consumption, and protection activities
that utilize natural resources in ways that sustain them economically and socially
while restoring and safeguarding the ecosystems that are the foundations of the
goods and services on which the local economy is based. Its practical purpose is
to build a more diverse local economy and thus a more resilient community.
Until quite recently a healthy natural-resource-based community was thought to
be a stable community. The paradigmatic case is the forest community in which the
local mill is supplied with timber managed for even-flow sustained yield (Kelly and
Bliss 2009). But the experience of the last quarter-century shows commodity pro-
duction to be unstable, along with the economy of communities tied to commodity
production. Thus, as thinking about resource management has evolved away from
commodity production, so has thinking about community socioeconomic health
evolved away from notions of stability.
Scholars and practitioners have recognized that change is ever-present and

long-term stability is unattainable—for communities as well as industries and firms.
Rather than stability, they seek to promote community resilience, the ability to
absorb change in ways that preserve or enhance essential functions, structure, and
identity (Magis 2010). A resilient community is an active agent on its own behalf
in developing and utilizing the necessary resources to advance community
well-being. Wilson (2010) maintains that a resilient community exhibits a well-
developed and well-balanced mix of economic, social, and environmental capital,
associated with a diverse local economy that continuously generates new sources
of incomes and jobs to replace those being lost, strengthening community self-
sufficiency.
One way of understanding a resilient local rural economy is in three broad
dimensions (Halseth et al. 2010). (1) It has a strong ‘‘traded sector’’—it produces
goods and services for export out of the local region, generating revenue into the
region. (2) It engages in ‘‘import replacement’’—produces goods and services locally
for local use, replacing those that were formerly imported into the local region. (3) It
‘‘plugs the leaks’’—makes sure that needed goods and services are locally available,
through a combination of the retail sector and subsistence production of goods and
services by people for their own use.
Taken together, multifunctionality and economic resilience point to NNRE as a
possible way forward for rural communities that have lost their economic base in
natural resources and=or agriculture. However, empirical research is needed to more
fully understand NNRE—what it is and the barriers to its development. To begin to
fill that void we conducted a Web-based scoping survey across rural Oregon,
followed up by case studies in three rural communities.
Methods
We invited rural community leaders across Oregon to respond electronically to a set
of open-ended questions about several aspects of their local economy. Relevant to
this article, we asked them about new ways people in their community have found
to generate income from local natural resources, and to identify policy and program-
matic barriers to local business startup and expansion. We field-tested the questions
with people involved in economic development in three different rural settings. Our
purposive sample consisted of 340 community leaders participating in an ongoing
statewide rural development program organized by an Oregon nonprofit organiza-
tion (NPO). We posted the questionnaire on Google Survey and then contacted each
participant by e-mail and invited each to go to the site to complete the questionnaire.
After one week we sent a reminder. We received 59 responses, including at least one
from every Oregon county.
The survey gives a clear sense of the scope of NNRE activities in rural Oregon
communities. However, to understand the multifunctional nature of NNRE it is
helpful to examine the activities in context. We therefore conducted case studies in
three rural Oregon communities chosen to reflect the diverse range of Oregon’s
geography, climate, and community characteristics. Prior to the site visits, we col-
lected demographic and economic trend data on each community. We made site vis-
its and conducted extensive interviews in two of the case study communities; in the
third we conducted telephone interviews, since we had visited it extensively for
another recent project.
In each case we conducted semistructured interviews lasting from an hour to an

hour and a half. Prior to the interviews, we provided a summary of the survey results.
We asked participants to comment on the results in terms of their own community
and to fill in any additional information they perceived as important. We specifically
asked them to react to the NNRE categories from the survey results, identifying those
activities that existed locally and those that did not, including whether there might be
an opportunity for their development. We further asked them to identify activities
unique to their local area that did not appear in the survey results.
Results: NNRE in Practice

We present our results in three parts, an inventory of the types of currently operating
NNRE enterprises, case studies, and policy=program considerations.
Inventory
Forty-seven of the 59 respondents (80%) said they know of NNRE businesses in
their community. They reported an extensive range of activities. We have organized
the types of currently operating enterprises into the three multifunctional categories
of production, consumption, and preservation=protection (Table 1).
This gives a summation of the NNRE activities in rural Oregon communities. As
we observed in the introduction, not all of these business types are new; however,
many are. What is new is thinking strategically about NNRE as an emerging
economic sector in its own right. Viewed strategically, NNRE presents significant
possibilities to diversify rural economies and increase local resilience.
Case Studies
To help rural communities make the most of NNRE’s potential, it is important to
understand the range of businesses it comprises and their multifunctional nature,
as well as policy and program needs in support of NNRE. To do so, we examined
NNRE in specific landscapes, by conducting case studies in three rural Oregon
communities in a range of contexts.
Grant County3
Grant County is an isolated area in eastern Oregon. It is about 90 miles from the
nearest Interstate onramp and has no bus, rail, or commercial air service. It has
an area of about 4500 sq. mi. and the population in 2010 was 7,445,4 down from
a peak of about 8,200 at 30 years ago. Public lands, including portions of four
national forests, account for more than 60% of the county’s land area. Population
density is about 1.6 people per square mile, compared to about 39 people per square
mile for Oregon as a whole.
Euro-American settlement of the area began with gold mining in the 1860s.
Sheep ranching was prominent in the late 19th and early 20th centuries. By the
1920 and 1930s, cattle ranching and timber harvesting and processing became the
dominant economic sectors. Commodity production in cattle and timber remains
important. However, production and profitability in both those industries have been
in long-term decline since the 1980s. In 1970, earned income constituted three-
quarters of total personal income in Grant County and transfer payments were
Table 1. Types of currently operating Oregon NNRE enterprises

Production (a mix of traditional and newer forms of agricultural and forest output)
. Farming=ranching
Native plant nurseries, raising plants for habitat restoration
Sustainably produced food products—including meat, milk, cheese, eggs, fruits
and vegetables—sold locally and in metropolitan areas, for household,
restaurant, and institutional (schools, hospitals, etc.) use
Wine grapes and wine production
Herbs and seeds sold by catalog and online
Suppliers to producers of emerging products (e.g., grape growers and wineries)
. Forest products
Community-owned multiple-use forest
Post and pole manufacturers utilizing ‘‘waste’’ from thinning and wildfire
mitigation activities (e.g., small-diameter logs and species such as Western

juniper, which have invaded historic rangeland habitats)
Utilization of slash—biomass—both as hog fuel and by processing it into pellet
fuel, to generate heat and electricity for schools, hospitals, and homes
. Alternative energy
Utilization of plantation-grown hybrid poplar trees for electricity generation
Geothermal heat—for state prison, hospitals, and schools, as well as industrial,
business, and residential users
Numerous biomass plants under construction
Numerous wind farms
Consumption (amenity-based landscape uses)
. Ecotourism
River=paddle trails, including maps, haul-outs
Kayak companies
Mountain bike guides, hunting guides, fishing guides, hiking guides, birding
guides, and horseback guides
. Harvesting firewood, mushrooms, berries, and other plant life from the forest for
personal use (subsistence)
. Agritourism—farm and ranch stays
Restoration=protection (activities that reflect societal goals concerned with
sustainability)
. Watershed restoration
. Wildlife habitat protection and restoration
. Forest restoration
. Environmental education
about 10% of the total. Currently, earned income is less than half of total personal
income and transfer payments are nearly 30%. Paralleling the shift in income source,
in 1970, per capita income on Grant County was about 90% of the U.S. average;
today it is about 75%.5
Because Grant County is struggling to maintain an economic base there is wide
interest in economic development. The county employs an economic development
coordinator, there is an active Chamber of Commerce, and there is a grassroots
organization, the Grant County Resource Enhancement Action Team (GREAT).
As in most communities that have historically been based in natural resources, a seg-
ment of Grant County citizens feels strongly that the only hope for the local econ-
omy is the revitalization of commodity production. But another segment argues
that even if output in commodity production returned to historic high levels, because
of changing markets and technology it would not produce a return to high levels in
jobs or incomes. They also contend that a return to commodity production is not
politically feasible because of changing societal views of resource management,
especially on the public lands that predominate in Grant County. They argue for
new ways to think about and utilize natural assets—for NNRE, though not using
that term.
Three initiatives reflect this new way of thinking. The first is the effort at water-
shed and forest restoration. There has been substantial investment across the Pacific
Northwest in recent years in efforts to recover salmon and steelhead populations.
Stream restoration has been and will continue to be a major part of that effort.
Restoration projects are aimed at improving salmon and steelhead habitats and
increasing water quality and quantity, but they have important socioeconomic
effects as well. One of the most active locations for restoration is the upper Middle
Fork John Day River, which bisects Grant County. Between 2007 and 2011, 15 res-
toration projects were planned on the main stem of the upper Middle Fork and 22
scheduled for the tributaries, with a large number of additional projects of varying
size and scope to be implemented over the following 10 years. It is estimated that
20 contracting firms were involved with these projects, and they brought
$1,251,839 to Grant County in 2007 and $924,719 in 2008; it is further estimated that
there are more than 60 government, tribal, and NPO staff members employed in
restoration-related professional positions in Grant County (Hibbard and Lurie
2012).
Forest restoration efforts are less well developed in Grant County but their
potential is recognized. Blue Mountains Forest Partners (BMFP) was formed in
2006 with help from Sustainable Northwest, a statewide ‘‘eco-eco’’ (ecology-
economy) group. It has included Grant County elected officials, conservation
organizations, representatives from the local forest products sector and forest con-
tractors, community residents and landowners, and representatives from tribal and
federal land management agencies. The dual mission of BMFP is to enhance forest
ecosystem health while creating jobs on and around the Malheur National Forest in
Grant County. One promising approach is the effort at wildfire mitigation.
There has been a significant increase in fuel loading in Western forests, including
the Malheur, with a consequent need for thinning to remove hazardous biomass and
enhance forest ecosystem health. There is substantial interest by BMFP and others in
finding markets for the material taken off the forest. While BMFP cannot claim
direct credit, an important example of what they have in mind is emerging in Grant
County. This is the second Grant County initiative that embodies the NNRE way of
thinking.
The Malheur Lumber Company is the last operating mill in Grant County. In
2009, there were concerns that it, too, would close. In that year the Oregon Business
Development Department awarded the Malheur Lumber Company a $5 million
grant for a facility to utilize biomass for production of pellets and briquettes. In
addition to preserving 75 existing jobs, it is projected that the facility will add
between 30 and 40 new jobs to the local economy. Supply will come from forest fuels
treatment. There is currently an oversupply of pellets generally, so there is some
concern that the plant may struggle unless the market expands. In response, the local
hospital and airport have retro-fitted their heating systems to utilize Malheur
Lumber’s output. In addition, there is the potential for local schools to utilize pellets
from the plant.
The third Grant County initiative that embodies the NNRE way of thinking is in
beef cattle. At least one area rancher is a member of the Country Natural Beef coop-
erative, a value-chain, differentiated product beef producer. There are at least two
other natural beef producers in the area: Strawberry Mountain Beef and Field’s
Grassfed Beef.
These 165 jobs—60 restoration jobs, 75 mill jobs saved, and 30 new ones cre-
ated—may not seem significant. However, extrapolating from a paper by eastern
Oregon regional labor economist Jason Yohannan (2007) provides some valuable
context: It is the equivalent of adding 22,000 jobs to the economy of the Portland
metropolitan area. The implication is that in the small Grant County economy a firm
considered small in Portland, with say 100 workers, would likely have difficulty find-
ing enough workers in Grant County. What the community needs is a range of
microbusinesses.
Vernonia6
Vernonia is located in the Upper Nehalem Valley of the Oregon Coast Range,
approximately 45 miles west of Portland and about 12 miles north of the main high-
way route between Portland and the Pacific. It is about 30 miles from the western
Portland suburbs that are major centers for high-tech research and development
(R&D) and manufacturing. Vernonia’s population is slightly over 2,000 according
to the 2010 Census.
Initial Euro-American settlement of the area occurred in the 1870s and 1880s.
The town built up around the confluence of Rock Creek and the Nehalem River,
one result of which is that Vernonia has experienced numerous catastrophic flood
events since its establishment.
Industrial logging came to the Coast Range in the early 1900s. The Oregon-
American Sawmill located in Vernonia in the 1920s and the community became a
classic single-industry rural mill town. Prosperity lasted from the 1920s into the
1950s when, following the exhaustion of timber supplies, the mill closed in 1957.
Fifty years later there has been no replacement for commodity timber pro-
duction and sawmilling. At this point Vernonia seems on its way to becoming an
exurb of the Portland metropolitan area. People seeking a rural or small-town life-
style live with their families in Vernonia and commute to locations on the west side
of Portland. According to interviews with local officials and citizens involved in
economic development, Vernonia’s ‘‘exurbanization’’ has so far not been very help-
ful to the local economy. The community lacks a critical population mass to support
the retail and services necessary for a vital downtown core; commuters often shop in
the urban areas where they work, because prices and selection are better.
In this circumstance there has been some NNRE activity. On the conventional
side, there are still many small, private forest owners in the area. They are mostly
engaged in nontimber forest products such as firewood and harvesting cones and
boughs for florists and other decorative uses. There is also an emerging recreational
market catering to bicyclists, particularly those using a new 21-mile rails-to-trails
project with one terminus in Vernonia. In a feature story, the Portland Oregonian
quotes a Vernonia café owner as saying ‘‘this place is a madhouse on Saturday
and Sunday’’ because of the number of cyclists (Tims 2011). But the community has
also recently embarked on an ambitious program called Rebuild Vernonia.
Vernonia has had two ‘‘500-year’’ flood events in recent years, in 1996 and again
in 2007. The 2007 flood changed the course of the community. It damaged approxi-
mately 400 houses within the city, along with businesses and essential services. In
addition, the elementary school, middle school, and high school were all flooded
with contaminated water from the local water treatment plant. Amended flood maps
place the schools in the high-risk zone, precluding the community from obtaining
private insurance on the structures.
In response, the community launched an effort to redevelop itself as a green,
self-contained community. With help from the State’s Oregon Solutions program,7
the Pinchot Institute, a Washington, DC, conservation NPO, and FEMA, Vernonia
has been working on a number of projects, at the heart of which is rebuilding the local
schools. New school buildings are being constructed to LEED (Leadership in Energy
and Environmental Design) standards and will be heated with local biomass materi-
als. The school system will host the Vernonia Rural Sustainability Center (VRSC). It
will include science classrooms and labs and meeting spaces. VRSC will develop
college, community college, and private-sector research and job training initiatives
associated with forest sustainability and clean energy. The VRSC and the rest of
the school system are being designed to demonstrate the potential for school systems
as catalysts for rural economic development and recovery.
Confederated Tribes of the Umatilla Indian Reservation8

The Umatilla Reservation is located in northeastern Oregon, adjacent to the town of
Pendleton. Historically, the Confederated Tribes—the Cayuse, Walla Walla, and
Umatilla—occupied separate territories along the Columbia–Snake River basin
and in the Blue Mountains. The reservation was established by treaty in 1855. The
tribes ceded 6.4 million acres of land in the Columbia basin and Blue Mountains,
in exchange for which they agreed to live together on a permanent homeland. They
retained hunting, fishing, gathering, grazing, and other traditional use rights on the
‘‘ceded lands.’’
Today the reservation encompasses an area of just over 172,000 acres and the
CTUIR has 2,787 enrolled members, of whom about 1,500 live on or near the
reservation (CTUIR 2010). For context, the population of Pendleton is 16,4809
and that of surrounding Umatilla County is 75,889.10
Like most Indian communities, CTUIR experienced a long period of deep
impoverishment following the tribes’ confinement on the reservation. That began
to change in the 1970s. Passage of the Indian Self-Determination Act of 1974 gave
the tribes control of their planning and programs for the first time. The first CTUIR
Overall Economic Development Plan (OEDP) was created in that year and the first
comprehensive plan was drawn up in 1979. Since then the tribes have built a viable
tribal economy virtually from scratch.
Initially, CTUIR invested in agriculture and related industries. However, as its
most recent OEDP (CTUIR 2009) comments, those ‘‘industries have not proven to
be a sound economic base in recent years. When natural resources are commodities
traded on the global market the pressures for mechanization are immense—profit
margins are slim, and job creation is minimal’’ (3). Over the last 20 years the tribes’
economic base has moved largely toward gaming=tourism, and to a lesser extent
toward other tribal enterprises such as retail and land development. The tribes
now provide more than 1,300 jobs, and the unemployment rate among tribal mem-
bers living on or near the reservation has gone from an estimated 60% in the early
1970s to about 12% today, which is comparable to that of Umatilla County as a
whole. Umatilla County per-capita income is 83.4% of that of Oregon, while for
CTUIR it is 57% of the state average; the latter is mitigated somewhat by the
important role of subsistence (hunting, fishing, foraging for berries, camas roots,
mushrooms, and so on) in the tribes’ culture.
Its success with what could be characterized as conventional economic develop-
ment has given the CTUIR (2009, 4) room to ask, ‘‘How do we meet our economic
needs while protecting our values?’’ Their answer is the concept of ‘‘economic sov-
ereignty,’’ which CTUIR defines as ‘‘expanding the Tribes’ economic choices in a
resource-constrained environment’’ (CTUIR 2009, 2).
The overall CTUIR notion of economic sovereignty is based in trying to gain
more control over the local economy—by diversifying beyond the dependence on
gaming=tourism, for example, or understanding and capitalizing on the tribes’ com-
petitive advantages. Some elements are fairly predictable, such as support for small
business startups and expansions and workforce development. But other elements
seem to directly embody the CTUIR values of responsibility and stewardship. Some
examples are: (1) to increase the number of acres of Tribal Farm Enterprise that are
farmed using no-till practices; (2) to expand and strengthen the business practices of
the Native Plant Nursery that was created by the CTUIR Wildlife program to capi-
talize on opportunities for native plant restoration by federal and state agencies; and
(3) to expand CTUIR involvement in the generation of renewable energy within the
homeland (reservation and ceded lands).
As well as embodying CTUIR cultural, social, and environmental values, these
elements are also examples of NNRE in that they reflect a multifunctional view of
landscapes. However, the most interesting multifunctional activity engaged in by
the tribes is the restoration of First Foods (Jones et al. 2008). In CTUIR creation
belief, the Creator asked the foods, ‘‘Who will take care of the People?’’ Salmon
was the first to promise; then other fish lined up behind salmon. Next was deer, then
camas, then huckleberry. Each ‘‘First Food’’ represents groupings of ecologically
related foods. The traditional First Food serving ritual is based on this order and
is meant to remind people of the promise the foods made and the people’s reciprocal
responsibility to respectfully use and take care of the foods.
The longevity and constancy of these foods and serving rituals across many gen-
erations indicate the cultural and nutritional value of First Foods to the CTUIR
community. Recognizing that, the CTUIR Department of Natural Resources has
organized its policies, population and habitat management goals, and actions
around restoring and protecting First Foods. First Foods provide an organizing
principle for CTUIR resource management; also, by this approach the Department
of Natural Resources confirms the simultaneous economic (subsistence), ecological,
and social importance of these resources to the tribes.
What we see, then, is that the CTUIR engages in active resource planning and
management, including aspects of NNRE, on the reservation and the ceded lands.
CTUIR does so not because of economic pressures, which it has largely dealt with
over the last 20 years, but for cultural reasons.
It is helpful summarize the case study findings in a table similar to that for the
inventory, Table 2. As with the inventory, the case studies show a wide range of
activities, and, as with the inventory, most are in sustainable forms of production.
Table 2. Types of NNRE enterprises in case study communities

Production
. Pellet mill (Grant County)
. Grass-fed beef (Grant County)
. Nontimber forest products (Vernonia)
. No-till farming (CTUIR)
. Native plant nursery (CTUIR)
. Alternative energy (CTUIR)
Consumption
. Nature-based recreation (Vernonia)
. First Foods (CTUIR)
Restoration=protection
. Watershed and forest restoration (Grant County)
. Vernonia Rural Sustainability Center (Vernonia)
Policy/Program Considerations
NNRE is not an alternative to the traditional natural resource sector; it is a
complement. But it is a critical complement to the extent that it can bolster rural
economies in ways that are culturally and environmentally healthy. To thrive,
NNRE needs appropriate policy supports. As one of our interviewees put it,
‘‘Economic development on the frontier is very different than in more populated
areas, in terms of inventory and use’’—that is, in terms of the kinds of assets that
are available and the uses to which they can be put. Rural communities are highly
reliant on natural capital, in contrast to significant reliance on intellectual and finan-
cial capital for business development in urban settings. Additionally, rural businesses
are generally very small—sole proprietorships are typical; half a dozen employees
verges toward medium size.
Given those realities, we asked survey respondents and case study interviewees
about policy=program issues that require attention in the development of the NNRE
sector. The most important, according to our interviewees and survey respondents
are these:
1. Prevailing definitions of ‘‘small business’’—less than 100 or less than 500 workers,
depending on the agency—that shape access to capital through federal and state
agencies are not appropriate for rural communities. Different lending criteria and
loan amounts and terms are needed that respond to the circumstances of very
small businesses.
2. Rural zoning regulations generally assume large-scale commodity production—
high-volume, low-value production on large tracts of land. They are not designed
to accommodate small-acreage, high-value production such as specialty crops. As
a result, when commodity production becomes less viable, for financial and=or
environmental reasons, the lands are taken over for hobby ranches, private
hunting preserves, high-end resorts, and the like, rather than for multifunctional
purposes that would contribute to the health of the local community.
3. There are similar regulatory barriers to small-scale production. Often the fee
structure for licensing is prohibitive. Also, health and safety regulations are scaled
for very-high-volume mass production and do not make sense for small-scale
and=or specialty production.
4. A major barrier to startups, especially those with new products, is the lack of
markets. Governments could be influential in increasing demand for NNRE
products. For example, the federal and state governments could require building
projects that receive public funds or over which they have regulatory authority to
consider biomass as a heat source.
5. Rather than recruiting outside the United States for ‘‘green industry’’ firms, state
governments could help rural communities by supporting existing and potential
NNRE activities.
Discussion
The purpose of this article is to make a first cut at describing NNRE as an economic
sector and at identifying the barriers to its development. Current thinking about
rural development encourages communities to move away from natural resource uti-
lization, to recruit new firms in such sectors as light manufacturing and call centers,
and to recruit new populations such as retirees. Our results indicate that rather than
moving away from natural resource utilization, rural communities are finding new
ways to utilize resources. We identified a broad range of activities that suggest
NNRE is an emerging economic sector that can help diversify rural economies by
producing new goods and services for export as well as increasing local resilience
by generating new incomes and jobs and strengthening the self-sufficiency of com-
munities. Table 3 summarizes the ways the NNRE activities identified in the survey
and case studies contribute to each of the three broad dimensions of every healthy
local rural economy: producing goods and services that are exported out of the local
region, generating revenue into the region; import replacement, producing goods and
services locally, for local use, that were formerly imported into the local region; and
closing the leaks through retail and subsistence.
The times seem ripe for NNRE. Rural communities searching for pragmatic
approaches to reinvigorating local economies are finding rural entrepreneurs who
have identified opportunities to utilize resources in new ways that preserve locally
important natural and cultural assets. However, the barriers to further development
of NNRE enterprises need to be further explored. In general, as our respondents and
interviewees pointed out, state policies and programs need to acknowledge the spe-
cial context of rural communities and the distinctive circumstances facing rural
entrepreneurs. They encounter different issues than their urban counterparts with
respect to access to financial capital, appropriate sites for their operations, the regu-
latory environment, and access to markets.
We have only opened the subject with this study. All of these issues need
in-depth study to produce the understanding necessary to design effective state poli-
cies and programs in support of NNRE. Perhaps most in need of better understand-
ing is the key asset that underpins NNRE, nature or natural capital—water, soil,
timber, minerals, wildlife, and so on. Managing natural capital so that it can be used
without being used up—providing jobs and wealth today and into the indefinite
future—is the promise of NNRE. How to achieve it is the challenge.
At base, NNRE entails locally owned small and medium-sized enterprises that
utilize local resources to produce goods and services for sale outside the community;
for sale locally, replacing imports; and=or for personal consumption. Rather than
recruiting new firms or residents, rural communities might benefit more from
Table 3. NNRE contributions to local rural economies
Import Plugging
Multifunctional activity Export replacement leaks
Production
. Scoping-survey results
. Farming=ranching x x x
. Forest products x x x
. Alternative energy x x
. Case-study results
. Pellet mill (Grant County) x x
. Grass-fed beef (Grant County) x
. Nontimber forest products (Vernonia) x
. No-till farming (CTUIR) x

. Native plant nursery (CTUIR) x
. Alternative energy (CTUIR) x
Consumption
Scoping-survey results:
Ecotourism x
Forest harvesting for personal use x x
Agritourism x
Case-study results:
Nature-based recreation (Vernonia) x
First Foods (CTUIR) x x
Restoration and protection
Scoping-survey results:
Watershed restoration x
Wildlife habitat protection=restoration x x
Forest restoration x x
Environmental education x x
Case-study results:
Watershed and forest restoration (Grant x x
County)
Vernonia Rural Sustainability Center x x
(Vernonia)
policies and programs that promote opportunities and loosen constraints affecting
rural business startups—tools to facilitate and support rural community NNRE
entrepreneurialism.
Notes
1. This discussion is drawn from Hayter (2003), Igler (2000), Smithers et al. (2005), and Stoll
(1998).
2. For more information regarding agriculture of the middle, see http://www.
agofthemiddle.org and http://www.cias.wisc.edu/category/economics/ag-of-the-middle.
3. Information for this case is based on fieldwork conducted by the authors in Grant County
during 2008–2010, for an applied research project supported by the Oregon Watershed
Enhancement Board (Hibbard and Lurie 2012), and follow-up interviews in 2011.
4. http://pdx.edu/sites/www.pdx.edu.prc/files/Grant_CT2000.pdf.
5. http://oregon.reaproject.org/analysis/comparative-indicators.
6. Information for this case is based on site visits and interviews, supplemented by document
analysis.
7. See http://www.orsolutions.org/ for details on Oregon Solutions criteria and processes.
8. Information for this case is based on document analysis supplemented by site visits and
interviews.
9. http://oe.oregonexplorer.info/rural/CommunitiesReporter.
10. http://quickfacts.census.gov/qfd/states/41/41059.html.
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This article was downloaded by: [West Virginia University]

On: 11 March 2015, At: 02:34

Society & Natural Resources: An

The New Natural Resource Economy:

To link to this article: http://dx.doi.org/10.1080/08941920.2012.720358

PLEASE SCROLL DOWN FOR ARTICLE

The New Natural Resource Economy: Environment

Institute for Natural Resources, Oregon State University, Corvallis,

Recent developments in resource management suggest an important opportunity to

Keywords community economic development, community resilience, healthy

Received 24 October 2011; accepted 1 July 2012.

In the following section we define ‘‘rural’’ and discuss the socioeconomic

The Rural Dilemma

private and government lands (Hayter 2003; Hibbard 1999).

Multifunctional Landscapes and Community Resilience

The consolidation and vertical integration that characterize commodity pro-

Scholars and practitioners have recognized that change is ever-present and

In each case we conducted semistructured interviews lasting from an hour to an

Results: NNRE in Practice

Table 1. Types of currently operating Oregon NNRE enterprises

mitigation activities (e.g., small-diameter logs and species such as Western

Confederated Tribes of the Umatilla Indian Reservation8

Table 2. Types of NNRE enterprises in case study communities

. Vernonia Rural Sustainability Center (Vernonia)

Table 3. NNRE contributions to local rural economies

. No-till farming (CTUIR) x

digm for natural resource-dependent communities? Society Nat. Resources 22:519–537.

U.S. Department of Agriculture. n.d. Grading, certification and verification; Grass-fed

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