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100 <br />Putting Smart Growth to Work in Rural Communities 11 <br />Oregon has 28 million acres of forest and 17.1 million acres of <br />farmland- together, well over half of the state's total land cover. <br />Oregon is the nation's leading producer of timber and forest <br />products, and farming is one of the state's largest industries, <br />comprising 10 percent of the state's gross domestic product. <br />As a result of the importance of these rural industries to the <br />state's economy, Oregon has made protecting its rural resource <br />economy a priority. <br />In addition to the RRED zones discussed above, Oregon uses <br />value-added processing for farm and forest products and has <br />tion materials, and paper; value -added food products <br />include ice cream made from milk produced at a <br />local dairy. These products can be developed through <br />producer -owned cooperatives and local manufacturing <br />plants and can also provide work for other residents <br />in the community. Many states have adopted policies <br />supporting value - added processing. For example, Min- <br />nesota has adopted legislation to establish a value - <br />added processing and marketing grant program to help <br />farmers establish cooperatives and markets for their <br />value -added products.15 The Blue Ridge Forest Coop- <br />erative (BRFC) in southwest Virginia provides another <br />example of value -added forestry products. The BRFC <br />is a community -owned and operated forestry business <br />that joins landowners to make value -added forestry <br />products like trim, decking, paneling, and flooring <br />while maintaining sustainable forest management <br />practices. 16 <br />Developing renewable energy capacity on rural lands can help <br />farmers, ranchers, and foresters increase their profit margins, <br />which provides incentive to keep the land in productive use. <br />made protecting rural resources and the related economies a <br />central part of its statewide planning goals. The statewide goals <br />of preserving farmland, conserving forest land, and protecting <br />natural resources outline planning strategies, including special <br />zoning designations, which help limit development and urban <br />growth on working lands. Using these strategies, Oregon has <br />helped ensure that its rural resource economy continues to <br />grow and thrive' <br />1 Oregon Department of Land Conservation and Development. "Rural Issues." <br />httpJ/www.oregon.gov/LCD/urbanrural.shtml#Rural_lssues <br />Oregon has worked to protect its agricultural and resource <br />lands with statewide planning goals and special zoning <br />designations, which limit growth on working lands. <br />Ecosystem services markets <br />Rural lands provide valuable ecosystem services, <br />including sequestering carbon, filtering and storing a <br />clean water supply, maintaining a habitat that sup- <br />ports biodiversity, and mitigating natural hazards, <br />such as floods and fire. Markets are emerging for these <br />ecosystem services. In an ecosystem service market, <br />the landowner sells ecosystem service credits to a <br />bank, which in turn sells them to a buyer that has <br />exceeded limits in carbon emissions, water pollutants, <br />or biodiversity loss, based on a cap and trade system. <br />Ecosystem services markets allow landowners to cap- <br />ture the value of the ecological benefits their land pro- <br />vides to the public. One of the best examples of this <br />approach is in New York's Catskill Mountains: New <br />York City provides payment for ecosystem services in <br />order to protect its drinking water supply, ensuring <br />that the land in the watershed will not be developed. <br />0 <br />