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Finished chairs are lined up on hooks after assembly and finishing at Jasper Seating Co. One-fourth of all Indiana agricultural employees work with hardwoods, a recent study shows. -- Mike Fender / The Star

Indiana's sprawling corn and soybean fields have nothing on its forests, a new study of Hoosier agriculture shows.

Employment and wages in the state's sawmills, furniture factories and other sectors of the hardwood industry rival those of the farms, grain elevators and food manufacturers that drive the most visible aspect of agriculture, according to an interim report released this month by BioCrossroads, a life sciences economic development nonprofit.

Last year, one in 15 Hoosier workers -- 190,000 -- made a living from agriculture, the report says.

One-fourth of those work with hardwoods. And the nearly $1.4 billion they earned in wages was virtually identical to the total salaries paid to state workers in the past fiscal year.

Not only is hardwood big, but it's surviving the onslaught of Chinese exports better than Carolina residential furniture makers, the study found.

"Very few people understand how important the hardwood industry is to Indiana," said author Ron Meeusen, BioCrossroads special projects director.

"It's one of our jewels. Nobody can ship our forests to China."

Economic development experts long have known Indiana is as much a center of office furniture making as North Carolina is to residential furniture.

Indiana's epicenter is Jasper, a southern Indiana community that the local Chamber of Commerce estimates is home to 40 furniture firms.

But BioCrossroads discovered hardwood's towering stature almost by accident.

An earlier study lumped agricultural biotech in with cardiovascular, protein analysis and five other human-oriented life sciences segments deemed to have the most potential to grow in the state.

But when Meeusen began asking deeper questions about ag biotech, he realized no one understood the extent of even the most basic agricultural sectors and how they affect each other.

By parsing the jobs into "clusters" of interdependent businesses Meeusen and collaborator Rob Swain, a consultant and former ag banker, realized 84 percent of the state's ag jobs and wages were driven by hardwood, grain, canning, pork and beef, and baking.

Hardwood's 47,000 jobs represented 31.4 percent of all ag employment, excluding farmers.

Agriculture accounted for 190,000 jobs and $5.1 billion in wages in 2003, both about 5 percent of the state total. That's not close to pharmaceuticals and human health.

Wages and jobs grew in both hardwood and in agriculture in general in the decade from 1993 to 2003.

Hardwood grew slower than grain because it was hit by the recession that clobbered other manufacturers four years ago.

Ag is critical for rural areas that attract fewer well-paying white-collar service jobs and are having trouble replacing the loss of manufacturing shop floor jobs.

"Ag really ought to be part and parcel of rural economic development," said Meeusen, formerly chief of research and development of plant genetics and biotechnology at Indianapolis-based Dow AgroSciences

The Hoosier hardwood industry is scattered across the state, although virtually none of it is in Central Indiana.

Most activity centers in southern Indiana's forests of oak, hickory, cherry and walnut. A secondary pocket is in northern counties, including the Mishawaka area.

Potential for hardwoods is so great that half of the six recommendations for helping agriculture will focus on the industry, Meeusen said.

When released in January, the detailed hardwood recommendations will promote global marketing and branding as well as improving forests and manufacturing technology.

Forests may be entrenched in Indiana, but the wood isn't.

Indiana hardwood companies need all the help they can get to compete against China, which imports wood from Indiana and other parts of the United States and turns it into furniture in some of the world's most advanced factories.

Imports, mostly Chinese, have eliminated a third of domestic furniture production since 2001. Chinese workers are paid as little as 60 cents a day, and plants are funded by the government.

And Indiana hardwood companies are woefully short of marketing and technology prowess, said Del Schuh, president of Indiana Business Modernization and Technology Corp., a private nonprofit in Indianapolis that helps businesses adopt technology and improve business practices.

"They can't see the problem, even though it's hitting them in the eyes," Schuh said. "They aren't motivated to do anything."

For more than a year, Business Modernization and Technology Corp. has encouraged hardwood businesses to share ideas to prepare for the growing threat of Chinese imports.

But Schuh is frustrated at resistance to change that has some boasting of "state-of-the-art equipment built in 1968." At one company, he noticed an employee measuring veneer not with a precision instrument but with a ruler.

In September the organization received a federal grant to help Indiana hardwood companies update their marketing plans, but only 15 of 400 members of the Indiana Hardwood Lumbermen's Association have signed up.

It won't be long before Indiana hardwood businesses are reduced to importing Chinese goods, and then the Chinese will start their own distributorships, and one of the state's strongest industries will vanish, Schuh predicted.

Ron Beck, who heads manufacturing at chair-maker Jasper Seating Co. in the state's hardwood capital in the southern Indiana community, said many business owners are too proud to let someone help.

"I see a lot of stubbornness. Those companies are not going to survive," Beck said.

But he doubts more than 15 percent of the industry's business has been overtaken by Chinese competitors.

Offshore competitors found residential furniture easy pickings because most of it is mass- produced, Beck said. Office furniture usually is ordered in custom dimensions, styles and colors.

For example, Jasper Seating typically supplies a certain look for executives and another for managers.

Equipment investments exceeding $3 million in the past couple of years have improved the amount of work turned out by each Jasper Seating employee at least 15 percent, he said, and the productivity gains are just beginning.

Jasper Seating will use robots instead of people to spray finishes, for instance.

The recommendations will be passed to Gov.-elect Mitch Daniels, who emphasized agricultural development as part of his campaign and said the industry will have a seat on the Indiana Economic Development Corp. board.

BioCrossroads probably will focus on biotech aspects of the study and hand off the rest to the state or another organization to pursue.

Meeusen is encouraged that the Jasper area has recognized the rise of imports and began to respond through the modernization group, even if progress is slow.

"It's a lot easier to put some juice behind an existing model than create something from scratch."

Call Star reporter Norm Heikens at (317) 444-6532.

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