Kimberly-Clark and America’s Dairyland

I am writing about two stories that point out how our economic development system and government could better serve the state. Both stories made headlines last week and I feel they are connected; in fact, they should be very connected by the press. They are not.

Let’s start with Kimberly-Clark. The company recently enacted a strategic initiative, Focus on Reducing Costs Everywhere, or FORCE. To force Wisconsin’s hand, a decision was made to close a plant in either Wisconsin or Conway, Arkansas. In response, Gov. Walker offered $28 million in tax credits over five years to keep the plant open in Fox Crossing (formerly the Town of Menasha), and K-C agreed to keep the 388 jobs at the Wisconsin plant and make a $200 million “investment” in infrastructure. Using the 388 figure, that’s $72,000 per job, although the state prefers to use the entire state K-C employment base of 4,100, which lowers the figure to $7,000 per employee. It is important to note that no new jobs are guaranteed in Wisconsin. The plant in Arkansas will close and, while it is only speculation on my part, much of the $200 million in infrastructure will come from a transfer of the manufacturing and packaging equipment currently in Conway to Wisconsin.

While I am not opposed to working with K-C, I still strongly suggest we would do far better as a state if we simply offered tax credits to any company expanding its employee base in the state and property tax credits for improvements yielding taxable infrastructure. I like the figure (for discussion’s sake) of $20,000 over 10 years for every new hire, and 10 percent TIF for new buildings with a signed development agreement guaranteeing property tax value in hand. This would place Wisconsin much higher on the economic development scale nationwide than it is now. It would also eliminate the political games now played to get tax credits. Wisconsin is ranked well bellow its development and growth potential, and that is after Foxconn is figured in. We need to address the needs of all growing businesses in Wisconsin. We are not.

Now, let’s contrast the K-C 388 jobs figure with the 638 dairy farms that closed last year in the state. Wisconsin has gone from 16,000 dairy herds in 2004 to 8,000 in 2018, or a 50 percent reduction in family farms. In that same time frame, we have added slightly to the total number of cows being milked (1.2 million-plus). How does this happen? Large corporate farms, milking thousands of cows, using far fewer employees per head, and waste management that spreads manure far beyond what is needed by the land for nutrition exponentially reduces costs. Small farms cannot compete. Our legislature ignores this problem because we are talking about maybe 20,000 votes and very little in the way of campaign contributions, most of which comes from the corporate farms anyway. I suggest it is fair to make the comparison between the 388 K-C jobs and the well over 1,000 farm jobs.

This problem can also be easily fixed legislatively. If we require farms with more than, say, 1,000 head to digest their manure and heat the effluent to reduce phosphorous and pathogens, we can create safer and better farms. We would be treating large farms like small cities, which they are, even using the most conservative figures I can find. I am only addressing the highly concentrated waste stream of large farms because we have been using manure successfully on smaller farms for centuries with little ill effect. Digestion on larger farms should be a win-win scenario for the state in that it protects our waterways and levels the playing field for smaller farms. Small farmers built Wisconsin, and addressing their decline should be at the top of the legislative agenda. It is not.

We can step away from politics and look at problems and solutions, or we can listen to the paid professional lobbyists who represent a specific company or specific interest and address their very specific requests. We should not.

Ken Harwood is editor of Wisconsin Development News.

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