Extra help for Farmland on state agenda

Published 12:00 am Wednesday, January 2, 2002

While Farmland Foods delays its decision on the reopening of its meat-processing plant in Albert Lea, Sen.

Wednesday, January 02, 2002

While Farmland Foods delays its decision on the reopening of its meat-processing plant in Albert Lea, Sen. Grace Schwab (R-Albert Lea) is preparing two bills that intend to help the displaced plant workers and the schools that serve their children.

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The bills will be proposed during the next Senate session starting Jan. 29, but they need to jump over hurdles that look very high at this time.

One bill Schwab is considering is to extend the unemployment benefits for the displaced workers. Former Farmland employees are entitled to the unemployment insurance benefit for up to 26 weeks.

Schwab seeks an additional 10 to 26-week benefit so the workers can maintain their lives before recovering their employment, possibly at a new Farmland plant in Albert Lea.

According to Workforce Development Inc., 475 workers became jobless after the fire. Many of them are in subsidized job-training programs while living on the unemployment benefits.

&uot;The extension is crucial for those who are waiting for good news from Farmland because the unemployment benefit will be drying up in January and February for the most of them,&uot; Schwab said.

A similar extension was recently applied to LTV Mining Company in Hoyt Lakes in northern Minnesota. The closedown of the iron mine last January took 1,200 jobs away and had a devastating impact on the local economy. Legislation allowed an addition of 26 weeks of unemployment benefits.

The bill also stipulated the following criteria for future unemployment insurance benefit extensions:

– The employer involved in the layoff has permanently ceased operations and has commenced bankruptcy proceedings.

– The communities in which affected employees live are disproportionately affected by the layoff.

– The communities in which affected employees live are remote locations where reemployment opportunities are limited.

– Employees receive extra benefits only while they are making satisfactory progress in an education or job-training program.

It is uncertain if the Farmland case can meet those criteria.

The Farmland closedown imposed a huge negative impact to the local economy. However, the reopening of the plant is still on the agenda despite the delay. And while the area unemployment rate rose significantly by the shutdown, the most recent number of 4.4 percent is still below national average of 5.3.

Curt Schoenrock, Program Manager of the Minnesota Workforce Center, is afraid the chance for the proposal to be endorsed in the State Legislature is slim. &uot;The area labor market here is very different from the LTV case,&uot; he said.

But Schwab thinks the Farmland workers deserve the remedy. &uot;The plant was in the middle of expanding its production when there was the fire. It means that the unemployment was absolutely unpredictable for the workers,&uot; she said.

The other bill Schwab is preparing is for special state aid for school districts where student enrollment was significantly affected by the Farmland fire.

According to Schwab, the bill will help the school districts sustain their staff and purchase contracts already made before the July fire.

&uot;The schools are not able to adjust those expenditures after the unexpected enrollment decrease due to the Farmland fire,&uot; Schwab said. &uot;The idea of the bill is to let the districts have time to react fiscally responsible to the unforeseen circumstances.&uot;

Schwab has already sent a letter to six districts – Albert Lea, Glenville-Emmons, Alden, NRHEG, Austin, and Lyle – to survey the number of the decline.

In the recent past the state appropriated the declining enrollment aid to Yellow Medicine East School District where a tornado hit in July last year. The district will receive $156,700 in 2002, $111,700 in 2003, $78,000 in 2004 and $39,000 in 2005.

Derby Olsen, union representative of the Albert Lea plant, welcomes the senator’s effort, but wonders how the financial woes of the state will affect the discussion in the legislature.

&uot;The state of the state looks too bad,&uot; he said.

Farmland Industries, parent company of Farmland Foods, has been postponing its final decision on the future of the Albert Lea production plant originally scheduled on October.

According to a blueprint submitted by the company to the city, the new 350,000 to 400,000 square-foot plant would produce 170 million pounds of processed meat per year. The construction cost is estimated at more than $80 million. The plant would create 720 jobs and the total annual payroll and benefits would be $25 million.

Farmland explains the delay is due to negotiation with am insurance company, and keeps refusing to name a specific date for the decision.

The company recorded a $90 million net loss in the last fiscal year ended Aug. 31. Management has started a comprehensive adjustment in its production by closing down unprofitable plants and shifting to more value-added products.