By Christine Stebbins
CHICAGO (Reuters) - Agriculture is poised to drive economic growth and job creation led by the dynamic north central region but proposed budget cuts may threaten that outlook, a study by an Ohio-based research firm said.
"Cuts are proposed in forthcoming budgets: cuts that will ripple through a system that leverages federal funding with state and local matching financial support," Battelle, a Columbus, Ohio, research group, said in the study.
"Ideally, recognition of the large-scale market opportunities in the agbioscience space should spur increased investment," the Battelle study said.
"Using just bio-based products as an example, it is estimated that there is a potential to replace up to two-thirds of petro-based chemicals with agricultural-based materials, representing 50,000 different products - a $1 trillion global market," the study stated.
The report, sponsored by 12 large universities in the north central U.S. who benefit from publicly funded agricultural research, said Europe, India, China and Korea also see agriculture as a driver of economic development, investing in research to reach food security, including biobased projects.
"With funding challenges coming across multiple fronts we have a system at risk -- a system in which the U.S. currently has a leading position and tremendous potential opportunities, but one that can be rapidly eroded by foreign competitors if the U.S. fails to support the system and its key institutions," the study said.
The region - Iowa, Kansas, Michigan, North Dakota, Ohio, Indiana, South Dakota, Illinois, Minnesota, Missouri, Nebraska, and Wisconsin - accounts for a fifth of the nation's land mass but 45 percent of farm exports, led by grains and meat.
The farming industry in the region was valued at $125 billion accounting for 2.4 million jobs, with 10 of the top 25 food and beverage manufacturers based in the region, top seed and equipment companies, and 90 percent of ethanol production.
The region's 800,000 farms are supported by about 88,000 companies in the "agribusiness value-added chain," it said.
Battelle said the driver behind the region's world-leading farm productivity had been the land-grant universities, with their "extension" services that work with farmers and business on everything from crop breeding and soils to developing new markets in health, biofuels and biobased products.
"These institutions should be considered priorities for further strategic investment and development given their importance in realizing the intrinsic growth potential of agbiosciences for the U.S. and regional economies," said Simon Tripp, lead author of the Battelle study.
In 2009, colleges and universities in the north central region attracted $3.6 billion in funding for academic research in agbiosciences and related disciplines, the report said.
"The issues addressed by agricultural sciences are strategic to the nation," Wendy Wintersteen, dean of the College of Agriculture and Life Sciences at Iowa State University, said in a statement on Wednesday about the study.
"In challenging budget times, funding support is critical to maintaining and expanding U.S. leadership in agriculture and agricultural sciences," she said.
(Reporting by Christine Stebbins. Editing by Peter Bohan)