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Delta ag impact runs into hundreds of millions each year

The direct economic impact of agriculture in one county in the Delta alone, Bolivar, is estimated at more than $100 million for 2004.

“Probably a third of all the jobs in our county are directly related to agriculture,” said Scott Luth, executive vice president of the Cleveland-Bolivar County Chamber of Commerce and Industrial Development Foundation. “In our county, ag is definitely one of the main drivers of the economy. We do have a good balance with the public sector, including Delta State University, and the industrial sector. But ag is probably the largest economic driver in our region.”

Eyeing subsidies

There are big concerns in farm country about the proposed changes to the farm bill in Congress that would reduce ag subsidies.

“It could have tremendous negative effects in this area because those dollars those farmers receive in farm payments ripple through this economy, and all the industries that have developed to support agriculture could also be affected,” Luth said. “We are all watching and waiting to see what may happen this next year.”

“We are obviously scared of some of the things the president has proposed as far as cuts in the farm program,” said Robert D. Ingram, executive director Greenwood-LeFlore Industrial Board. “Ag always has been and always will be one of the major drivers of the Delta economy. We’re working hard to diversify the economy so it is not so dependent on the ups and down of agriculture. At the same time we’re building a manufacturing base, we are working to develop high-tech and non-traditional jobs such as those in call centers. It is important that the Delta not be totally dependent on any one segment so we can do a better job of riding the ups and downs of the economy.”

Current high fuel prices are going to affect ag profitability. Not only do farmers need fuel to run their vehicles, but many ag chemicals are petroleum based.

“Energy prices are going to affect all of us,” Ingram said. “It is a real concern for the economic development community right now. As a short-term thing, the spike in prices hasn’t had that great of an impact yet. I think we will see demand soften in the U.S. as prices continue to go up. Prices will have an effect on company profitability, which will affect what they can pay workers. So much of the world’s economy is based on the U.S. economy and sales to the U.S., and if something isn’t done at some time, high energy prices could cause a recession here or worldwide.”

The possibility of ethanol

On the flip side, high costs for oil could help spur the development of an ethanol industry in the state. Ingram said that would help Delta agriculture tremendously.

“There are a number of groups looking at producing ethanol that could provide a substitute for MTBE, which is a chemical additive to gasoline that has been found to be highly cancer producing. At today’s prices, ethanol can be produced a whole lot cheaper than gasoline and can be used in fairly high percentages as an additive to or replacement for gasoline. Most places use 10% ethanol right now, but you can go to a much higher blend of up to 40%, and produce it much cheaper than normal gasoline. I hope that will be an answer, and I hope Mississippi will get in early to be on the cutting edge of the reducing the dependence of the U.S. on foreign petroleum.”
Ingram said increasing gas consumption by China is putting supply pressures on the world’s oil reserves that have never been there before.

“As long as demand is outstripping daily production, prices are going up,” Ingram said. “You must have more production or less demand for prices to drop. There are some positive things that could make that happen, and some very negative things that could prevent that from happening. It is something we should all be worried about, and should all be encouraging finding more petroleum products in the short run and funding alternate products for producing energy in the long run.”

Tommy Hart, executive director of the Industrial Foundation of Washington County in Greenville, also believes the escalation in gasoline and diesel prices has sparked renewed interest in ethanol production.

“All of that is being assessed,” Hart said. “Every time the price of fuel goes up, they seem to go into a new round of assessment for ethanol plants. It creates quite a lot of new activity. We just came off a period in the past 30 days with intensive work with two firms that are considering ethanol plants in the area. Rising fuel costs have rekindled these ethanol initiatives.”

Hart said high energy prices will certainly impact the current planning and production of this year’s crop. Last year, fuel costs weren’t as bad; fuel costs didn’t really start escalating until toward the end of the year.

Good year

Overall, 2004 was a good year for ag in the Delta.
“We had a very good crop last year regarding production,” Hart said. “The agricultural economy in Washington County makes a major contribution. In many ways, as farming goes, so goes the community economically.”

Historically, a good crop and prices for ag means money in the bank, loans paid, bonuses for farm employees and purchases of big-ticket items like cars, said Charles A. “Chuck” Jordan Jr., president of Planter’s Bank and Trust, Greenville.

“It has far-reaching impacts,” Jordan said. “Most Delta banks have gotten away from ag lending because it is so risky. We still do a lot because we are a local bank in nine Delta towns. We see first hand the benefits of having ag loans available.”

Loans are also available from groups such as Staplcotn, ag chemical companies and production credit associations.

Developing diversification

Jordan said while the significance of agriculture in the Delta is appreciated, there is a natural evolution to diversify the economy by promoting the Delta as “the Napa Valley of Music.”

“If we could turn this rich agricultural area into a tourism site, as well as continue the agricultural efforts, we could double our efforts in improving the economy of the Delta,” Jordan said. “There is a real effort with different museums and the Blues Commission to capitalize on the fact that the Delta is the birthplace of modern music, including, blues, country, jazz and rock and roll.”

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

About Becky Gillette

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