By Michael Heins
Dick King, executive director of the Bear Paw Development, Inc., opened its annual banquet with a welcome and an introductions honored guests Thursday.
King spoke on Montana's economic conditions and how it ranked in the nation.
Montana ranked 44th in household incomes in 1990 and in 1999 ranked 45th, King said. Montana also ranked 47th per income per person in '90 but in '99 in it ranked 49th. It also ranked ninth below poverty level in '90 and in '99 it ranked sixth in the nation, King said.
"The good thing is that Montana was third in the nation for college enrollment in '90 and in '99 it ranked second," he said. "We are not retaining enough of our college graduates to add to our economy. Many of our college graduates go to other states for better paying jobs."
One of the industries that could help Montana prosper is the value added processing industry, King said. He talked about Bio Gold and its plans of making particle board from locally grown straw.
The plans for the Bio Gold plant are only tentative, he said. The company itself proposes a plant to convert agricultural waste into value-added building material.
The capital needed for the project is $40 million. Bio Gold would need to raise $10 million in equity for the plant toproceed.
A study by The Management Firm showed that the project, as initially designed, is not feasible and would have a negative cash flow.
The Management Firm has invested in Bio Gold and has representatives on the company's board.
A new proposal is for cooperative funding for construction and agricultural procurement, for the proposed plant including 50 percent cost sharing and cap on construction, 25 percent cost sharing on operating expense and 100 percent straw supplied from local farmers.
"Cost sharing with the federal government would make the straw board plant feasible and would be a better deal for the government and our local economy than the CPR program," King said.
Approximately 270,000 acres of farmland in Hill County are locked up in CRP, this is 22.5 percent of the available farmland. Cost to the government over a 10 year period for CRP, for 303,000 acres, would be $104 million.
During the same period and acreage wheat straw would cost the government $77 million.
"The benefits to our economy over the same 10 year period would be about $434 million," King said.
In contrast, the benefits to the local economy with CRP over this same period is $48 million, according to King.
The plan is for the federal government to contribute $200 million to the project over a 10 year period for construction.
The tribal component would be $120 million and non-tribal $60 million. King said he believed that this would be a win-win project for our community.