This paper provides an overview of research policy considerations and conceptual analyses for the South for three economic development issues: the relationships of Southern agriculture to rural areas and communities; trends and adjustments underway and having an impact on economic development in the region; and the directions economic development research should take to analyze and understand the current situation. The paper concludes that for much of the rural South agriculture is not the key to rural economic development. Economic restructuring underway is likely to widen the rural-urban economic gap. Policy intervention will be needed to reduce the size of the gap. Rural development policy will be primarily a state and local responsibility with very limited aid from the Federal Government. State experiment stations can and should provide the expertise needed by state and local agencies to evaluate the effectiveness of alternative rural economic development strategies and programs. Effective rural development policy must be designed with the region in mind. This will require a careful accounting of the economic structure in the particular rural region of interest, estimation of its linkages with urban centers, and the sensitivity of the region to external economic forces. (NEC)