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Chicago Fed Letter, No. 239, June 2007
Globalization and Rural America
Many parts of rural America have benefited significantly from globalization. American agriculture sells the production of one acre out of three overseas; this generates one-quarter of U.S. farm sales revenue. Without this outlet for its enormous productivity, American agriculture would be much less profitable, and land values, which make up a significant part of many rural communities’ tax base, would be lower. Globalization has also reduced the cost of many things that rural people buy while substantially increasing the variety of goods available for purchase locally. Nevertheless, globalization also gives rise to concerns in rural areas about U.S. jobs being shifted overseas. And the once large balance of agricultural trade has shrunk to close to zero as agricultural imports have grown. Despite the rapid rates of productivity growth in American agriculture, most U.S. farm families now earn most of their incomes from nonfarm sources.
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