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Agriculture: Will it be Indiana’s high-tech ticket

To investors, three letters deliver heart palpitations: IPO, which stands for initial public offering. Everyone wants to invest in a hot company, but few people want to buy Amazon.com stock at $275 a share. The greatest rewards come to the earliest investors.

The trick, of course, is knowing which new ventures to invest in.

"The two hot high-tech industries of the moment are life sciences and information technology, and agriculture fits right into that," says Vic Lechtenberg, dean of agriculture at Purdue. Lechtenberg says researchers at Purdue foresee three high-tech areas with a large potential for economic development in agriculture. "First, there is the emerging new science of genomics, which will allow us to make great strides in improving the genetics of crops and food animals," he says. "This will be especially important as it relates to human and animal health and to the environment. Next is using technology to improve global competitiveness. Finally, there is the reality of greater environmental regulations and controls, and the economic opportunities these new rules create."

Indiana is well poised to become a leader in this merging of agriculture, medical sciences and information technologies. It is home to three of the nation’s most well-known research universities, Purdue, Indiana and Notre Dame, as well as the nation‘s fourth-largest medical school, the I.U. School of Medicine, and one of the nation’s preeminent agricultural schools. Add to that mix the industrial might of science-based companies such as Eli Lilly & Company, Boehringer Mannheim Corp., Great Lakes Chemical and Dow Agrosciences, and Indiana emerges as a potential leader in the next age of high-tech life sciences.

If an investment in high-tech life sciences is made, the payoff would be jobs. According to Purdue’s Office of Manpower Studies, across the nation high-tech employment is expected to increase twice as fast as overall non-farm employment for the next seven years, a 32 percent increase versus a 15 percent increase. Jobs in agricultural life sciences are expected to increase by 42 percent in that time period.

This would be good news for Indiana in many ways. Not only would new jobs be created, but it could also help reverse one of Indiana’s most intractable problems, which is college graduates leaving the state for better opportunities elsewhere, a problem known by colloquial shorthand as "the brain drain." Indiana ranks 15th in the nation in producing college graduates, but only 48th in the nation in the percentage of the population with college degrees. According to the Indiana Fiscal Policy Institute, Indiana is dead last among the 50 states in the percentage of its labor force employed in professional specialty occupations.

It doesn’t take an agricultural scientist to tell you that if you want something to grow, you have to create a favorable environment. In his 1999 State of the State Address, Indiana Gov. Frank O’Bannon proposed creating a $50 million 21st Century Growth Fund to pay for university research and business incentives to create and retain jobs in biotechnology, computer science and other high-tech fields. The Indiana General Assembly responded, creating a $50-million investment fund.

"We’ve seen this work in other states," says Randy Woodson, director of Purdue’s Office of Agricultural Research Programs. "In California and in Massachusetts, research was funded at Stanford and MIT, and the computer industry took off in those states because of that. North Carolina put money into the research triangle and launched a major pharmaceutical industry." (The research triangle is the area between the University of North Carolina in Chapel Hill, North Carolina State University in Raleigh and Duke University in Durham.)

In 1990, Georgia created the Applied Genetic Technology Resource, an alliance of six research universities and high-tech industry. Their effort has already spawned seven new high-tech companies, with several more planned. The Georgia program would be a good model for Indiana, Woodson suggests.

"The bottom line is this," says Woodson, "Here at Purdue, we’re doing the type of research that will attract jobs–well-paying, high-tech jobs–to Indiana."

 

Here are reports on these three emerging areas of high-tech agriculture:

Biological manufacturing

Just as the invention of the microprocessor eventually ignited the rocket-like ascent of the computer industry, many scientists believe recent insights into the genetic structures of organisms, a relatively new branch of biology called genomics, will spark enormous economic opportunities in the discovery of new genes. "There could be literally one or two companies that come out of the discovery of just one gene," Woodson says. "When you multiply that by the hundreds of thousands of genes that are important to humans, animals and crops, you begin to realize the economic opportunities that exist today in life sciences."

Lechtenberg says that a convergence of the applied biological sciences of medicine and agriculture is both inevitable and beneficial. "New advances in genomics, particularly plant genomics, will allow us to link agriculture and medicine. We will be breeding and producing new crops that lower cholesterol or block fat absorption, and consumers will soon see the benefits of this new emerging basic science."

Purdue professors Avtar Handa and Suresh Mittal are looking at using genetically modified plants to deliver vaccines to animals and humans. By increasing the number of antigens in the mouth and throat (antibodies are anti-viral compounds in our bodies), the researchers theorize that diseases that typically enter the body through the mouth and nose will be less likely to cause respiratory and gastrointestinal diseases. By eating foods produced from plants genetically modified to produce the vaccines, humans and farm animals could have improved health at a very low cost.

Although the marriage of medicine and nutritious foods seems obvious, less apparent but equally promising are techniques that would ultimately convert farm fields into biological production facilities for important industrial chemicals and materials.

"For example, it is possible to modify genes of plants to produce materials that today can only be made from petrochemicals," Woodson says. "Using crops instead of fossil fuels has environmental advantages and reduces our reliance on foreign markets."

Global competitiveness

It is of little surprise that globalization is an important factor in economic development–"If you go back a decade and compare, the globalization of agriculture is having a phenomenal effect on today’s economy," Lechtenberg says–but that doesn’t discount the idea that globalization will continue to be a driver of Indiana’s future agricultural economy. A critical component in being able to compete globally is being able to create foods that people in other countries care to eat.

Mike Boehlje, professor of agricultural economics at Purdue, says "Most of the private-sector research-and-development activity has focused on the United States and Western Europe, but these are relatively mature markets. Today, the growth opportunities are greater outside these regions–in areas such as Mexico, South America, Eastern Europe and Asia."

Fry & Associates, a food technology company in Indianapolis, recently contracted to develop a Chinese-style chicken broth for a Taiwanese company. Fry turned to Purdue’s Food Science Department for technical assistance and received advice on packaging, heat processing and production. During the first year, more than seven million cans of the broth were produced in the United States for export to Asia. "There were more than $500,000 worth of ingredients bought from Indiana producers for just this one product, with growth expected for the coming year," says Dennis Fry, owner of Fry & Associates.

Fry says that over the past seven years, Purdue has assisted his company with international food and product development for markets in Argentina, Chile, China, England, France, Germany, Poland and Russia, as well as Taiwan.

"Purdue’s new food science complex gives us the opportunity to set up a technical assistance program to the food technology industry," Lechtenberg says. "This is especially important for new start-up companies that lack the resources of larger corporations."

Environmental research

Many business people view new environmental regulations as added burdens on the nation’s economy, but Ronald Turco, director of Purdue’s Environmental Sciences and Engineering Institute, says that increased environmental concern also brings new business opportunities. "I’m an open-market advocate who thinks that the best way to implement the regulations is just to put them out there and let the marketplace come up with solutions and the people to deal with them," Turco says. "The business community is quick to respond with innovative technology. If you put the regulations there and you enforce them, you will create jobs because of it. Look at all of the new companies that sprang up after the clean air regulations were put into place."

In agriculture, the most pressing environmental problem involves disposing of animal waste. As food animal production moves away from a few animals on a family farm to large, efficient industrial production facilities, disposing of the waste produced by those animals changes from being a small barnyard chore to becoming a large environmental challenge. "This is a problem that has technological solutions," Woodson says. "We just need to do the research and come up with those solutions. But this is a problem that we can solve."

One of the problems with manure, according to Turco, is that it is an inexact material, which makes it difficult to use precisely. "But we can build computer-controlled bioreactors that can convert the waste into a standardized crop nutrient," he says. "It’s going to take some brainpower to do that. But there will be economic opportunities in the development, testing and marketing of these new waste disposal methods."

Taking a broader, long-term view of the economic potential in environmental regulations, Turco says that farmers may even find economic opportunities in new regulations enacted because of concerns of global warming.

If the United States signs the recent United Nations Kyoto Protocol, which calls for treaty nations to reduce their net carbon emissions to 1990 levels by 2008, Turco sees opportunities for farmers to be paid to adopt farming practices, such as no-till, that increase carbon sequestration so that the United States can achieve this goal.

"Carbon sequestration adds value to agriculture beyond food and fiber," Turco says. "You can imagine people being paid for keeping farms because the farms are giant carbon sinks. The carbon in the atmosphere is absorbed by the plants and soil and reduces this atmospheric levels of carbon dioxide.

"It’s a national benefit of farming that we haven’t really talked about."

Story By Steve Tally

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