The National Commission on Agriculture and Rural Development Policy, established by Congress to provide broad, long-range policy perspectives, examined rural development policy issues and made many field visits to observe rural conditions and rural development projects. The Commission recognized the diversity of rural communities and identified causes of rural economic change to be: (1) the decline of traditional resources-based industries;; (2) international competition; (3) changes in technology and the job market; and (4) the phuysical distance and social isolation of rural communities. The following principles are suggested to guide rural development: (1) rural areas and people must be economically self-reliant; (2) rural areas and people must be able to adapt rapidly and effectively to changing market conditions; and (3) the rural physical and cultural environment--valuable elements of national life--should be protected. To achieve these goals, the federal government should undertake to: (1) review all of its policies to determine their effects on rural areas; (2) improve the availability of information about rural conditions and development strategies; (3) adopt a comprehensive and strategic approach to rural development; (4) foster better cooperation among rural development participants; (5) incorporate flexibility in its policies to accommodate the diversity of rural America; (6) promote innovation and experimentation in the pursuit of rural development; and (7) make education a major component of rural development policies. Improved rural education is necessary to attract high-wage high-skilled industries and to foster entrepreneurship and small-business growth, but rural schools are hampered by lack of funds and higher costs per student. (SV)