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Innovative Approach Has Tennessee Setting Its Sights on Agribusiness Development.

The past 200 years of Tennessee statehood have been inseparable from agriculture. The health and vitality of our people have always been closely tied to the land -- our forests and farmland. The same is true today and will be true tomorrow.

Since taking office in 1995, Don Sundquist has placed an emphasis on agribusiness development like no other governor in recent history. As Tennessee's Commissioner of Agriculture, I am proud to serve a governor who recognizes the importance of a strong agricultural industry to the general welfare and health of our state. He knows that actions to build agriculture are actions that will ensure the economic viability and livability of the entire state.

It has been the goal of Governor Sundquist's administration to chart a course of action that will help Tennessee agriculture and forestry bridge the millennia. For the first time in history, we now have a business plan for agribusiness development and recruitment. A greater emphasis has been placed on international marketing opportunities. And, a greater effort is being made to help farmers and forestland owners meet challenges both on and off the farm.

One only has to travel the roadways outside our urban areas to realize the impact that agriculture has on our state. The pastoral landscape dotted with cotton fields, barns, cattle, and many other symbols of agriculture contributes significantly to our quality of life.

Beyond these landscapes exists a huge and diverse industry that is of critical importance to Tennessee. Memphis, long recognized as the state's "agricultural capital;' contains many fine agricultural and forest products industry concentrations. Memphis hosts the world's largest spot-cotton trading market and is the hardwood lumber capital of the world. A sampling of globally significant firms include Dunavant Cotton Inc., Anderson Tully Company, Archer-Daniels-Midland Inc., Cargill Inc., and many others.

Farm production in Tennessee is a $2 billion per year business, with major commodities representing a diverse fanning base including cattle and calves, broilers, dairy products, horses, tobacco, cotton, nursery products, soybeans, corn, fruits and vegetables, wheat, and hogs. Tennessee's agricultural production is broadened with its hardwood lumber production.

International trade continues to have a significant impact on Tennessee's agricultural economy, with exports of raw products totaling $382 million in 1999. Estimates of total food and fiber exports of processed products show that as much as $3 billion moves to international destinations through Tennessee air and waterway ports.

Economists at The University of Tennessee Institute of Agriculture have measured the direct and total effects of agriculture and forestry on the Tennessee economy.' Agriculture and forestry in Tennessee account for 21 percent of the state's economy and generate more than $53 billion in output. This definition includes the primary production industries of agriculture and forestry, the input supply industry, value-added sub-sectors, food and kindred products manufacturers, apparels and textiles, and forest products manufacturing.

Agricultural and forest products industries, as large and diverse as they are, face tremendous challenges. In particular, the farm production area is faced with many critical issues including low commodity prices, weather, environmental issues, international competition, and many others. It is production agriculture and forestry that forms the foundation for the jobs, income, and profits that are generated in other sectors of the agricultural and forestry economy. To maintain the health and vitality of production agriculture in our state, we must work diligently to ensure that farming remains economically viable and profitable for Tennessee farmers.

In one of his first actions upon assuming office, Governor Sundquist appointed a blue-ribbon committee of agricultural and forest industry officials to review the status of agriculture and forestry in Tennessee and look at ways to transition our industry into the 21st century. The Governor's Council on Agriculture and Forestry (GCAF) after a year's intensive work presented thirty--eight recommendations on meaningful issues. One of the most important aspects of GCAF was recognition that agricultural and forest industries and businesses had important roles to play in our state. The council recommended an ambitious effort to recruit and develop agricultural and forest industries. Not only do these businesses contribute thousands of jobs in the processing, transportation, input, and distribution sectors, they also create accessible and profitable markets that boost farm income in Tennessee.

The task of developing agricultural business in the state presented many challenges. Competition is intense; many states are working hard to develop value-added agribusiness to benefit their farmers. With the desire to be smart, focused, and have a competitive edge, the Tennessee Department of Agriculture (TDA) contracted with Memphis-based Sparks Companies, Inc.(SCI), one of the world's premier agricultural consulting firms. SCI possesses an in-house staff of nationally-recognized economists, livestock specialists, agronomists, and others. Additionally, they have one of the most extensive computer databanks in the industry. SCI provides services to hundreds of agricultural industries in this country and abroad. We were confident that with SCI's analytical expertise and industry network we could be much more effective in attracting agricultural industry that could help provide additional markets for Tennessee farmers.

A strong team was assembled to initiate our agribusiness development efforts. The team included a public/private partnership of our sister agency, the Tennessee Department of Economic and Community Development, the University of Tennessee Institute of Agriculture, the Tennessee Farm Bureau Federation, USDA/Rural Development, and regional and local economic development agencies. Each of these agencies and organizations has sincere interests in the economic development of rural areas in Tennessee. This team provided guidance and funding for our agribusiness development efforts.

The initial phase of our work involved analyzing the strengths of the agricultural production sector in Tennessee. A series of meetings were conducted across the state with both producers and agribusiness professionals. Following these meetings, SCI analysts conducted extensive research into identifying specific agricultural production areas in which Tennessee could compete in a global market. Recruiting efforts and resources were re-directed to these areas.

Major sectors identified as having potential for growth and development in Tennessee include poultry production, pork production and processing, soybean and cottonseed crushing, forest products, and a forest industry showcase. While actively pursuing all industry development opportunities, these areas have become the focus of efforts by TDA.

In addition to identifying areas of strength, SCI also produced a detailed prospectus for each commodity. These documents analyzed in-depth factors that could influence an industry's decision to expand in Tennessee. Factors include worldwide supply and demand, competition, production information and capabilities, infrastructure, and geographical areas in Tennessee that would support expansion. Each prospectus, attractively written and presented, became a valuable tool in our recruiting efforts.

Following completion of the analytical phase of the project, TDA, in concert with the Tennessee Department of Economic and Community Development, began recruiting visits to companies located across the United States. Currently in the midst of extensive recruiting activities, the future looks promising. Tennessee is one of the few states in the nation that has taken this proactive approach to recruiting agricultural industry for our state, and we think the opportunity to build our industry is worth the effort.

Because of the economic importance of the hardwood lumber industry to our state (Tennessee ranks second nationally in hardwood lumber production) and the initial successes of the Sparks Companies, Inc., project, the Department of Agriculture has also retained the services of a renowned forest products engineering and market development firm to assist in determining incentives that influence forest products manufacturing business expansion and relocation decisions. In doing so, the state recognized that furniture manufacturing today is going through many changes--changes that may make traditional incentives not as relevant for existing expansion/relocation decisions. The need for work in this area was also driven by a conservative estimate that more than 60 percent of hardwood lumber production in Tennessee leaves the state as green or kiln-dried lumber without additional value-added processing. Oregon-based Mater Engineering, worldwide experts in forest products manufacturing and market research, was the fir m selected.

Analytical work by Mater Engineering will be completed by the end of this year. We will then begin intensive recruiting of targeted forest products industries that will use our large and renewable production of hardwood lumber presently being shipped out of state. The purpose of this project is not only to provide additional jobs to Tennesseans, but also to bring value-added returns to our forest landowners and primary forest products industries.

While we are excited about the prospects of success in recruiting new agri-industry to Tennessee, we have a number of ongoing programs and services in other areas. TDA's "Pick Tennessee Products" campaign encourages consumers to purchase Tennessee products. An international marketing effort seeks to develop all-important foreign markets for products grown and processed in Tennessee. We actively work to develop markets for new or non-traditional farm products, which includes fruits and vegetables, aquaculture, equine, horticulture, agricultural tourism, and others. These products provide opportunities for farmers to diversify or shift production and add value to farm operations.

TDA's web site,, lists the market development programs, services, and activities conducted by the department. Visitors can find out where to purchase agricultural products ranging from strawberries and apples to forest products and processed foods. An attractive listing of tourism sites features agricultural themes including corn mazes, pick-your-own farms, horse facilities and trails, and much more.

Despite the challenges facing our farmers today, there are many bright spots in Tennessee agriculture. We've measured a 259 percent increase in sales of horticultural products over the past decade. Landowners have benefited from favorable timber sales at the same time that our forestland resources have increased. Poultry production continues to abound as one of the fastest growing sectors of our agricultural economy. Farmers are finding success in entrepreneurial ventures like agri-tourism and value-added processing. And, Tennessee's equine industry, a national leader in many respects, represents more farm investment than ever before.

The times are changing. We operate in a totally different economic, social, and political environment than we did even just five or ten years ago. It is imperative that we make sound, prudent investments in agriculture and forestry in order to be competitive in this fast-changing world. At the Department of Agriculture, we are committed to building upon our state's strong agricultural heritage and ensuring the future growth and development of the industry. We are fortunate in Tennessee to have tremendous resources in terms of people and land to be successful in this new age of agriculture.

Agriculture in Tennessee is very important, and I am pleased that through the activities of the Department of Agriculture, we can continue to work to maintain the viability of this, our most basic industry. Dan Wheeler was appointed by Governor Don Sundquist as Tennessee's 32nd Commissioner of Agriculture in January 1995. He is a native of Cumberland County, Tennessee, where he grew up on the family grain and livestock farm. He attended public schools in Cumberland County and received his B.S. degree from The University of Tennessee College of Agriculture in 1964.

He began his career with the Farm Bureau in 1965 as an agent for the Farm Bureau Insurance Companies in Marion and Sequatchie counties. He later served as a regional field service representative for The Farm Bureau Federation in 21 counties in the Cumberland Plateau and Chattanooga areas.

In 1969, he was promoted to Assistant Director of Field Services in the Columbia headquarters where he worked in membership acquisition and organizational service activities. In 1973, he was named Assistant to the President and Director of Field Services. In 1980, he assumed additional responsibility as the organization's Chief Legislative Lobbyist and was named Chief Administrative Officer in 1990.

He is a past member of the Board of Governors of The University of Tennessee National Alumni Association. He has served as a member of the Council of Advisors to the Vice President for the University of Tennessee Institute of Agriculture Alunmi Council. He is a past member of the Advisory Board of Maury Regional Hospital. As commissioner, he serves on The University of Tennessee Board of Trustees and the Board of Regents for the State University and Community College System.

Commissioner Wheeler currently serves as President of the Southern United States Trade Association (SUSTA), representing 15 member states, Puerto Rico, and the Virgin Islands. He also serves on the Tennessee Board for Economic Growth and is a member of the Board of Directors of First Farmers and Merchants National Bank of Columbia, Tennessee.

(1.) Facts and figures from The Agro-Forestry Complex: A $53 Billion Contribution to the Tennessee Economy by Dr. Burton C. English, Dr. Kim Jensen, and Mr. Jamey Menard of the AIMAG/Agri-Industry Modeling and Analysis Group, Department of Agricultural Economics and Rural Sociology, University of Tennessee Institute of Agriculture.
 Tennessee Cash Receipts, 1999
Nursery 7.0%
Other Crops 5.0%
Cattle and Calves 11.0%
Dairy 6.0%
Broilers 8.0%
Other Livestock 6.0%
Cotton 14.0%
Soybeans 11.0%
Tobacco 20.0%
Corn 12.0%
Source: Tennessee Agriculture 2000: Department
Report and Statistical Summary. Tennesse
Department of Agriculture, August 2000.
 Direct Effects of Agriculture on the
 Tennessee Economy
Total Industrial Output $20.1 billion
Employment $ .2 billion
Wages and Salaries $ 3.4 billion
Value-added $ 6.2 billion

Source: Dr. Burton C. English, Dr. Kim Jensen, and Jamey Menard. The Agro-Forestry Complex: A$53 Billion Contribution to the Tennessee Economy. The AIM-AG/Agri-Industry Modeling and Analysis Group, Department of Agriculture Economics and Rural Sociology, University of Tennessee Institute of Agriculture.
 Total Effects of Agriculture on the
 Tennessee Economy
Total Industrial Output $36.3 billion
Employment $ .4 billion
Wages and Salaries $ 7.8 billion
Value-added $14.4 billion

Source: Dr. Burton C. English, Dr. Kim Jensen, and Jamey Menard. The Agro-Forestzy Complex: A $53 Billion Contribution to the Tennessee Economy. The AIM-AG/Agri-Industry Modeling and Analysis Group, Department of Agriculture Economics and Rural Sociology, University of Tennessee Institute of Agriculture.

Tennessee Agriculture and Forestry Facts

* Tennessee's diverse agro-forestry complex includes the primary industries of agriculture and forestry, the input supply industry, the value-added sub-sectors, food and kindred products manufacturing, apparel and textiles, and forestry products manufacturing.

* Tennessee's agricultural and forest products account for 21.0 percent of the state's economy and generate more than $53 billion in output.

* About 290,000 Tennesseans are employed by the agro-forestry complex, with 106,000 employed in agricultural production.

* Agricultural products generate nearly $2.5 billion in farm cash receipts every year.

* Critical value-added industries include food processing, paper and allied products, and apparel and textile products. These sub-sectors account for more than 70.0 percent of the value added to agricultural and forest products.

* Important manufacturing employers include apparel and textile products, food and kindred products, and furniture industries.

* During the 1990s, the value of shipments from the lumber and wood products industry grew more than 13.0 percent each year, and grew more than 8.0 percent each year in the furniture industry.

* Agricultural and forest products are leaders in Tennessee's export sales. Agriculture and forestry contribute about 22.0 percent of the state's export base and are worth more than $1.9 billion.

* Outdoor sports enthusiasts spend more than $1.2 billion on hunting and fishing activities in Tennessee each year, for a total impact of $3.6 billion on the state's economy.
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Author:Wheeler, Dan
Publication:Business Perspectives
Geographic Code:1USA
Date:Sep 22, 2000
Previous Article:The Challenges in Agribusiness.
Next Article:A Message from U.S. Secretary of Agriculture Dan Glickman.

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