Four major concerns are currently shaping national rural development policy: (1) rural population and employment are increasingly diverse but physical isolation and low population density limit essential public services; (2) many geographically concentrated rural communities continue to have high rates of very low income; (3) rural governments are faced with adapting to change and providing a diverse array of public services; and (4) significant relationships exist among natural resources, agriculture, and rural communities. To deal with rural development, the Rural Development Policy function has been elevated within the Department of Agriculture (USDA). The Administration has directed that USDA rural development grant and loan programs focus on the most rural communities and that farming be treated as an integral part of rural development. The Administration will rely heavily on the private sector for development initiatives. Responsibilities of the Cabinet Council on Food and Agriculture have been expanded to include rural development, the Office of Rural Development Policy has been established, and the Advisory Council on Rural Development Policy has been announced. Participation in rural development policy formation will be sought via Advisory Council input, public hearings, national interest group input, and the direct participation of certain states and communities. (SB)