Arkansas is among the states listed as having the highest concentrations of jobs in industries that produce bioproducts -- goods made with plant-based chemicals, plastic and other materials -- according to a report released this week by the U.S. Department of Agriculture.
Agriculture Secretary Tom Vilsack said the new analysis demonstrates how agriculture can create jobs and spur innovation as research enables products with renewable, plant-based ingredients to compete with those containing petroleum-based ingredients.
"When you basically tell folks that now this is a $369 billion industry that helps to support 4 million jobs, displaces 300 million gallons of petroleum, you're getting people's attention," Vilsack said in a telephone interview Thursday.
Raising awareness about the role played by the biobased products industry will bolster demand for crops, which in turn will stabilize commodity prices that have been falling due to high domestic yields and increased foreign competition, Vilsack said.
The report, produced by the Duke Center for Sustainability & Commerce and the Supply Chain Resource Cooperative at North Carolina State University, examined the national market for biobased products, their economic value and ability to create jobs, as well as the ability of bioproducts to displace similar petroleum-based products and other environmental impacts.
Bioproducts are defined as goods manufactured with ingredients or components derived from U.S.-grown crops, including items such as plant-based chemicals, enzymes and plastics.
The report estimates that in 2013, bioproducts contributed $369 billion in value to the U.S. economy, directly employed about 1.5 million workers and supported another 2.5 million jobs. Researchers evaluated bioproducts in seven industrial sectors: agriculture and forestry, biorefining, biobased chemicals, enzymes, bioplastic bottles and packaging, forest products, and textiles.
It specifically excluded the economic impact of other agriculturally sourced items including food, livestock, feed, biofuels and pharmaceuticals.
Despite its relatively small size, Arkansas was one of nine states listed in the report as having the highest concentrations of jobs related to industrial activities involving biobased products. Others were Mississippi, Oregon, Maine, Wisconsin, Idaho, Alabama, North Carolina and South Dakota.
For Arkansas, the report identified grain and oilseed milling for biobased products; forest product manufacturing; biobased plastics and rubber; and agriculture, forestry and supporting services as making up a larger segment of the state's employment compared to the nation as a whole.
One of the report's co-authors, Robert Handfield of North Carolina State University, said comparisons were based on the number of jobs that could be attributed to bioproduct industries compared to a state's overall employment.
"For Arkansas, the biobased economy plays a greater role in the overall economy than other states," Handfield said, which he attributed largely to the forest products industry. But he said bioproducts in other economic sectors are having an effect as well. The presence of the world's largest retailer, Bentonville-based Wal-Mart, in Arkansas influences the figure, he added.
With Wal-Mart's current push to place biobased products on store shelves, "There's good potential there," he said.
"Our intent was really to look at what are the other uses for biobased products that are impacting the economy outside of fuels," said Handfield. The report also looked at "drop-in" products, those used in lieu of petroleum-based products that have to be competitive in terms of functionality and cost because customers and consumers often won't pay more for them.
Vilsack said bioproduct industries provide good opportunities for economic growth, especially in small states such as Arkansas, which is home to 13 firms on the USDA's "BioPreferred" website, which produce biobased products including spray foam, candles, lubricants and diesel fuel additives.
The BioPreferred program encourages and tracks the purchase of biobased products by federal agencies and sponsors a voluntary labeling program for such products. Currently about 20,000 biobased products are listed, Vilsack said, and the report estimated more than 20,000 others are currently on the market but not listed.
"I think what this report is suggesting is that America is back in the business, particularly in rural areas, of creating and innovating new products that are capturing the interest of a lot of folks," Vilsack said.
Vilsack also said the USDA is expanding its loan guarantee program for new or existing businesses that produce biobased products. Companies will be eligible for up to $250 million in loan guarantees, which he said should result in more manufacturing operations opening in states such as Arkansas.
"There is a lot of innovation taking place in this space and certainly there's a lot of research that's being done on university campuses across the United States in this area," Vilsack said.
Some of that research is happening at the University of Arkansas in Fayetteville.
Danielle Carrier, a professor of biological engineering, is currently using a grant from the Arkansas Science and Technology Authority to research development of an anti-microbial agent from the bark of sweet gum and pine trees.
"In the normal way of thinking, people think of agriculture as producing food," Carrier said. "But this biobased thing is trying to produce classical and sometimes even better products with bio-based resources."
Bioproduct research can involve many things, including energy sources, carbon capture technology, and development of new kinds of packaging and water filters, she said. Currently, plant materials other than wood are being used in particle board and plant proteins can be used as binding agents, she said. "They're starting to creep in more and more."
Carrier said that while biobased products can be cost-competitive with traditional ingredients and materials used in products, they also can carry a higher price tag that sometimes discourages consumers.
"But we have a whole new generation of people coming up behind me that are very interested in renewable, more naturally-based products," she said. "They are willing to pay that extra buck to have a more renewable product."
Business on 06/19/2015