Saturday, January 29, 2011

Barter Networks Provide Link to Rural Economic Development

Bartering conjures up images of trading chickens for a house call by the rural family doctor.  Yet, barter networks have emerged as vehicles for a reported transaction value of more than $8 billion per year, plus the billions more swap and trade transactions that go unreported.  From personal to corporate transactions, from in-person to online exchanges, the barter infrastructure offers significant opportunities to move goods outside the realm of cash and credit contracts.
For the most part, trade exchanges flourish where there is a diversity of products or services being offered and, consequently, are focused mainly upon urban networking. Bartering may have begun as a mechanism to allow businesses, countries and individuals with limited cash flow but access to desired goods or services to participate in and benefit from a capitalistic market, but has evolved as a valued way of moving surplus inventory or capabilities stock expeditiously.  It is estimated that more than 350,000 businesses in the USA alone participate in trade exchanges.  The International Reciprocal Trade Association boasts membership of more than 80 corporate barter networks around the world, the National association of Trade Exchanges lists 60 more, with claiming to have identified over 700 personal and business networks.
The ease with which a barter network can be set up makes it attractive for neophytes to the process.  Guided packages that detail the steps involved are readily available online.
In addition to ease of setup, linking of these myriad exchanges through formal and informal agreements mean that small groups can access a much broader array of goods and services.  Local operations easily can tap into the national and international exchanges, often paying only a nominal amount to participate.
Because of the ability to expand the reach of modular exchanges, the very nominal start-up costs and efforts and the appeal of cashless transactions, barter networks are ideally suited to rural economies.  However, it is ironic that, with the variety of unique products and services available and the propensity to turn to community for support, rural entrepreneurs have been reluctant to establish their own unique brand of barter. 
Perhaps it is the misperception that the only goods that they have to offer to each other are farm goods.  Yet, aside from the rural retailers and service providers that have inventory and services to trade, individuals and farmers also have a wealth of goods that may be exchanged.  Equipment and personal assets are only a few of the valued goods that could be bartered, while produce of varying grades, livestock, and even leases and rentals on production equipment make excellent offerings.
To set up a network involves little more than a good bookkeeping software package, an Internet connection, a website and a coordinator to arrange and list the items to be bartered.  In some instances, organizers may require a refundable deposit, to allow for a credit account to be set up for each exchange member.
Similar to the eager online entrepreneur who traded a giant paperclip upwards and laterally sixteen times in order to acquire a house in Kipling, Saskatchewan, bartering offers latent potential to generate profits and benefits where none were previously seen.  Realistically, an old tractor may become a holiday excursion to the Caribbean, or a few hours of babysitting nurtured into a substantial discount on a vehicle.  The possibilities are endless for the trader, but invaluable for the rural communities who are seeking ways to stimulate enterprise in their regions.