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|Reason to be optimistic|
A move by the Legislature's Joint Budget Committee to appropriate some $50 million to assist Foster Farms in its purchase of a Pilgrim's Pride chicken processing plant in Union Parish should fuel a bit of optimism among residents of northeastern Louisiana.
The Joint Budget Committee acted on the matter Wednesday evening at the capitol in Baton Rouge.
Drowning in a pool of red ink, Pilgrim's Pride sought bankruptcy protection earlier this year. As part of its bankruptcy filing, Pilgrim's Pride announced it would shutter its processing facility in Farmerville. Some 1,300 direct jobs would be lost while it has been estimated that another 3,000 indirect jobs would disappear as well. Let us not forget about the financial institutions in the region, which loaned money for chicken growers to buy the appropriate equipment to raise chickens to be processed at the plant. Those financial institutions were staring at huge losses if the Pilgrim's Pride facility went out of business permanently.
Into the picture arrived Gov. Bobby Jindal. He announced his plan in March to tap the state's economic development rapid response fund, or mega fund, to aid Foster Farms' bid to buy the Pilgrim's Pride facility in an $80 million transaction. The move, according to Jindal, would save more than 1,300 direct and indirect jobs.
Yet, an obstacle stood in the way of Jindal's proposal to give Foster Farms some $40 million toward the purchase of the Farmerville plant as well as some $10 million to upgrade equipment at the facility. That obstacle was language in the state law that created the so-called mega fund.
When the Legislature created the mega fund it gave a governor a tool to offer financial assistance to a business or industrial concern that desired to do business or expand in Louisiana. The law did not give a governor the authority to commit mega fund dollars to a business's efforts to buy an existing business in the state. Thus, the mega fund law needed to be amended.
That prompted Sen. Mike Walsworth of West Monroe, who represents Union Parish, to offer legislation to amend the mega fund law to give a governor the green light to commit mega fund monies in instances like the one involving Foster Farms and Pilgrims' Pride. The Legislature approved Walsworth's bill in rapid fashion; Jindal signed it into law earlier this week, setting the stage for the Joint Budget Committee to act.
Pilgrim's Pride idled its Farmerville plant not long ago. Foster Farms indicated recently that it could be up and running at the Union Parish facility in a matter weeks, or not long after Foster Farms finalizes its agreement to buy the Pilgrim's Pride plant.
We should note that a bankruptcy judge must sign off on the transaction.
We suspect a bankruptcy judge will not stand in the way of the Foster Farms/Pilgrim's Pride deal. After all, many jobs in one of the most impoverished regions in America are at stake.
While there is reason to pause for a moment or two to rejoice in the Joint Budget Committee's decision to appropriate the money for Foster Farms to buy the Pilgrim's Pride facility in Farmerville, we should never forget Jindal's and Walsworth's work on the matter. They delivered when it counted.