BioCrossroads is a public/private/academic partnership focused on creation of high paying life science jobs in Indiana. In 2004 BioCrossroads undertook an analysis of Indiana�s agricultural and agribusiness economy in order to identify opportunities to stimulate economic development. The 112 sub-segments of Indiana�s ag economy were studied to determine where the jobs are today, what they pay, where growth indicates strengths, and where weaknesses exist. An advisory board of state ag leaders then used that information to recommend actions to support and expand the State�s job base in this important part of our economy.

The year long study of Indiana�s ag economy resulted in six major findings:

� Indiana�s ag economy can be better viewed as composed of nine clusters of inter-related industries (rather than the traditional 14 sectors used by the Federal Bureau of Labor Statistics). These comprise Wood Products, Grains, Pork & Beef, Canning, Baking, Poultry, Dairy, Beverages and a miscellaneous category.

� Over 80% of jobs and wages today reside in 5 of these clusters � Wood Products, Grains, Pork & Beef, Canning and Baking.

� Indiana has significant competitive strengths we can leverage. Examples include:

    � 4.3 million acres of high quality hardwood forests supporting an industry which employs 47,000 Hoosiers   

    � A central location within a day�s drive of two-thirds of the US population

    � A world leading land grant university providing trained workers and modern technologies.

� Indiana has significant weaknesses which must be redressed. These include a serious decline in food processing, a negative environmental regulatory image in the industry which dissuades investment here, and lack of coordination between multiple state agencies involved with ag economic development.

� Significant threats to Indiana�s ag economy include global competition from SE Asian, Chinese and Latin American wood product manufacturers, continued global pressures on commodity grain prices along with political pressures to reduce domestic price supports, and the need to meet rising environmental stewardship standards and to deal with the consequences of urban encroachment.

� The Agriculture Advisory Board convened by BioCrossroads also identified six opportunities for the state to defend its existing job base, redress its key weaknesses, and build upon its strengths. Three strategies deal with our wood products cluster of jobs, and three with the food related clusters (Details below).

Following are recommendations which deal with leadership of economic development efforts state-wide, the focus of those efforts and six specific strategies tailored to Indiana�s opportunities and threats.

The Agriculture Advisory Board of BioCrossroads recommends that Indiana establish a central authority to drive economic development in the agriculture and agribusiness sectors, coordinating those activities which currently reside in various agencies and programs. Whatever governing structure is chosen for agriculture, Indiana needs focused leadership to assure that the State:

� Integrates agricultural economic development into the state�s overall economic development efforts.

� Identifies and implements state-wide strategies to defend and expand our ag economy in a globally competitive arena.

� Annually updates its analysis of the strengths, weaknesses, opportunities and threats to our ag economy and uses this information to guide its economic development activities.

� Establishes metrics and tracks and publishes progress toward the goals of these strategies, especially from the perspective of jobs and wages.

The Board further recommends that this authority be charged with prioritizing strategies to a) defend and expand our top job-supporting clusters, and b) position IN to attract investment in future food and ag technologies and businesses. Both priorities will require that our state become adept at forging novel alliances across the public, private and academic sectors.

The Agriculture Advisory Board of BioCrossroads recommends that Indiana designate the following five agricultural clusters as immediate priorities for defense and expansion into domestic and global markets. These five currently represent 84% of Hoosier�s 2003 income from our ag economy (more if owner-operator farm income is considered).

Six specific strategies are recommended to support and expand Indiana�s agricultural and rural economies. Three focus on the hardwood cluster in marketing, manufacturing and improvement of our forest base, while three address weaknesses and opportunities in the food and ag clusters. Note that specific efforts in a number of these strategies are already underway, but today operate without the coordination and urgency which could be provided by focused state leadership. These six strategies address all five of the largest clusters, but will also strengthen our smaller clusters which have potential for growth:

Strategy 1 - Develop and implement a global branding and marketing strategy for Indiana�s wood products. The high quality of our hardwoods underpins a range of Indiana products employing 47,000 Hoosiers, and provides the opportunity to compete globally with low cost producers on the basis of higher quality. This requires a clearly articulated and aggressively executed effort to create and globally market an Indiana quality brand. The State should take the lead in organizing our private sector and trade offices in this effort, as private companies are constrained by anti-trust provisions and competitive pressures.

Strategy 2 - Introduce advanced manufacturing techniques to improve the competitiveness of IN�s hardwood product companies. Efforts are already underway to identify technologies which can aid Indiana�s competitiveness. The Indiana Hardwood Lumberman�s Association/Purdue Center for Advanced Manufacturing activities to commercialize log scanning and cryogenic cooling technologies is one example. State leadership is needed to accelerate and expand such efforts to counter the imminent threat from Southeast Asian and Latin American imports which decimated the domestic furniture-based industry in the Carolinas in only three years.

Strategy 3 - Improve the health and future value of IN�s hardwood forests by creating mechanisms to produce, distribute and plant improved seedlings. Indiana has the materials (improved tree genetics) needed to assure the future health and value of our forests and woodlots. But we currently lack adequate mechanisms and incentives to see them planted. The Purdue/US Forest Service Center for Hardwood Tree Genetics in West Lafayette can provide improved varieties of most Indiana hardwoods today. The state needs strategies to produce, distribute, and provide planting incentives to assure that a) woodlot owners and foresters plant seedlings selected to maintain and improve the health and species diversity of the forests, and b) plantation owners plant seedlings selected to provide the highest value wood to assure our state�s continued leadership in high quality wood products.

Strategy 4 - Recognize the importance of IN�s part-time farming workforce and develop policies to maintain and support this segment by explicitly linking it to non-farming rural development. Of Indiana�s 63,000 farmers, over half farm part-time. Our State has a rural workforce of over 30,000 who derive supplemental income from part-time farming and combine this with non-farm jobs. This is somewhat unique to our State. Indiana should explicitly target rural development efforts to the needs of this rural workforce, including consideration of educational and training programs for combination farming and �off-farm� careers.

Strategy 5 � Create in Indiana a national food processing research center to address IN�s declining strength in this value-added segment. In the early �90�s Indiana began losing ground in key segments of the food processing industry. In one area by �97 Indiana had dropped from processing 80% of what we grew to only 46%. Increasingly we ship raw agricultural products to other states, whose workers process them and sell us back finished products� the definition of a colony. Yet Indiana hosts the nation�s largest food science department (Purdue), making it a logical candidate for a national food processing laboratory which would provide a powerful base to redress this weakness in our economy.

Strategy 6 - Position IN as a national pilot site for integrated, environmentally sound production of food and bio-energy. Food production, particularly animal-based, faces growing constraints from rising environmental standards and encroaching urban populations objecting to odors and noise. Technologies to solve many of these challenges are being developed at universities like Purdue, but are often too expensive for individual operations to afford. Indiana has an opportunity to take a national leadership role in defining and piloting an integrated solution to these challenges. Indiana should form a novel public/private/academic coalition to design and build an �Ag Enterprise Zone� in which greater environmental stewardship is made economically achievable, turning environmental stewardship from a liability to an IN competitive advantage. A pre-permitted, pre-zoned park for animal, food, and bio-energy operations could be designed in which the cost of the latest waste treatment facilities are shared across many operations. Further, by clustering operations in which the side-stream of one is a feedstock for another (e.g., soy protein from a biodiesel plant fed to chickens whose waste is burned for bioenergy) economics can be maximized and environmental footprint minimized.