Federal block grants and consolidated programs related to poverty reduction may compel states to streamline administrative structures and approaches that have deterred collaboration in the past. This report considers the block grant environment in making key policy recommendations for reducing poverty in rural areas, formulated during a Pathways from Poverty meeting in New York. Unique attributes of the rural poor and challenges of providing services and support in rural areas suggest that collaboration among service providers and agencies is the most logical way to address community needs. Policies that support integrated planning, outcome versus process measurement, and regulatory flexibility are critical to development of successful rural poverty strategies. Policy recommendations are organized around eight key principles: commitment to statewide minimum benefit standards that meet basic needs; making work pay for the working poor; improving statewide technological and administrative supports and quality assurance mechanisms; developing an inclusive work force development system that offers education and training to meet specified local needs; managing cooperation at the local level in rural health care systems; promoting service planning in a community context; achieving interagency collaboration and service integration; and evaluating programs on the basis of achievement of outcomes, rather than process measurements. Sidebars discuss underemployment in New York, caution local policy makers about the cost-cutting intent of federal proposals, and list members of the New York State Pathways from Poverty Team. (SV)