Michigan Land Use Institute

MLUI / Articles from 1995 to 2012 / ‘What’s Good for Farms Is Good for Michigan’

‘What’s Good for Farms Is Good for Michigan’

New study, state’s troubled economy confirm farmland’s preciousness

December 12, 2005 | By Keith Schneider
Great Lakes Bulletin News Service


Peninsula Township north of Traverse City, which in 1994 established Michigan's first purchase of development rights program, was awarded $268,862 this month by the state Agricultural Preservation Board.

GRAND RAPIDS—Winter has settled over the barns and cornfields that Linda Bradford Anderson’s family has tended since 1917, and which her son, Jason Bradford, intends to farm well into the 21st century.

Almost 600,000 people now live in Kent County, nearly four times more than in 1917. The 15 miles that separate the Bradford farm from Grand Rapids, once a protective belt of forest, fields, and orchards, is filled with new houses, big-box stores, auto dealers, and strip malls. The Bradfords, like hundreds of other Michigan farmers, are taking every step they can think of to ensure that their profitable, 1,200-acre dairy farm won’t be swallowed by another subdivision. They are among the first farmers in Kent County to apply for a limited number of dollars in a highly competitive state farmland preservation program. But state funds and county matching dollars are in short supply despite farmers’ rising demand for them.

That’s a shortsighted shame, says Mrs. Anderson. And many economists agree. Protecting farmland not only aids thriving farms, it is also vital to the state’s economy. Agriculture forms the state’s second largest economic sector, and is becoming even more important as a source of jobs and profit as Michigan wages flatten and manufacturing jobs disappear, according to new research by Michigan State University and the state Department of Agriculture. One million Michigan residents are employed in agriculture-dependent industries, including processing, manufacturing, marketing, transportation, tourism, and recreation. Even in the face of sprawling development patterns that are rapidly consuming Michigan’s countryside, state government and business leaders are reluctant to make investments that assure the farm sector’s success.

“The point is that what’s good for agriculture is also good for Michigan,” said Soji Adelaja, the John A. Hannah Distinguished Professor in Land Policy and director of the Land Policy Program at Michigan State University. “We have to recognize that as a state and design a new agriculture policy that is centered on how to move agriculture forward as an industry. Agriculture has huge public benefits. It is a strategic resource.” 

Indifference to a Good Deal
In Kent County alone, there are 318 commercial farms, 4,500 farm-related jobs, and $150 million in annual farm sales. Statewide, Michigan’s 53,000 farms earned a record $4.3 billion in cash receipts in 2004. More tellingly, net farm income increased 42 percent in 2004 over 2003, a terrific showing in a state with one of the nation’s highest rates of unemployment.

Furthermore, Michigan’s farms generate $59.1 billion in economic activity—processing, manufacturing, marketing, transportation, and tourism—each year, according to the state Agriculture Department. A Michigan farm supports, on average, 20 jobs, and those jobs tend to stay in Michigan rather than moving overseas. Many economists now see agriculture as one of the state’s most stable sources of prosperity and employment.

But the Legislature, the state Chamber of Commerce, the governor’s office, and the Kent County government display a remarkable resistance to permanently protect the resource that this economic engine depends on: productive farmland. 

Kent County, which established a farmland preservation program three years ago, refuses to spend money on land preservation, relying instead on the federal government, Grand Rapids foundations, local townships, and the farmers themselves. The state devotes just over $1.3 million for farmland preservation each year, enough to protect perhaps 1,500 acres—a tiny fraction of Michigan’s 10.1 million acres of farmland.

“If we had more money we could do a lot more,” said Wayne Wood, president of the Michigan Farm Bureau, and the chairman of the nine-member state Agricultural Preservation Board, which awarded grants to two counties and seven townships this month. “This is a start, so that’s good.”

Mitch Irwin, the director of the Michigan Department of Agriculture, defended the state’s tiny preservation investment.

“We’ve got the message,” Mr. Irwin said. “Promote our economic base and preserve resources. Stabilize and diversify our economy. That’s what we’re talking about in Lansing. The farm industry is a big part of that. But these are tough times and we are trying to live within our constraints. Nobody’s discovered a new pot of gold out there.”

But others suggest that what’s missing is not money, but political will. A study by the Michigan Land Use Institute earlier this year found that Michigan taxpayers spend more than $10 billion annually for economic development on a broad array of state and local grant, tax, loan, incentive, revenue sharing, training, and construction programs, many of which promote sprawling development that paves over farmland. A small shift in those priorities could make a big difference to one of the state’s most important industries, and help to curb sprawl at the same time.

More Enthusiasm Than Money
Dr. Adelaja, in a new study on farmland conservation, recommends that the state spend $50 million annually for preserving 25,000 acres of farmland each year to build what he calls a “diverse, resilient, and flexible” 21st-century agriculture industry. Dr. Adelaja and his colleagues developed a ranking system to identify and protect the most valuable farmland. Their study identifies about 700,000 farm acres, mostly in 18 counties in southern, eastern, and western Michigan, including Kent County, that could be permanently protected for less than $1.8 billion.

“We need new public policy to strengthen agriculture,” said Dr. Adelaja, who arrived in Michigan over a year ago, after helping to establish a farmland and open space conservation program in New Jersey with a $1 billion state-financed preservation fund. “Michigan has plans for most things that matter. We also need one for agriculture.”

But Michigan has not considered such an ambitious farmland conservation program since 1974, when former Republican Governor William G. Milliken signed Public Act 116, which gave farmers property tax credits in exchange for keeping their land in agriculture for at least 10 years. 

At the program’s peak in the early 1990s, farmers had enrolled 50,000 parcels representing 4.5 million acres of land in the program, more than any state in the country. But since then, Michigan has alternately drained and then re-invested resources in it.

For example, farmers’ tax credits fell from roughly $14 an acre to less than $5 per acre when Michigan cut property taxes in half in 1994, so thousands of farmers opted out of their agreements and removed 1.2 million acres from preservation. A few years later the Legislature tried to fix that problem by increasing farmers’ tax credits, but the renewal rate for the 10-year agreements, once 80 percent, fell to 68 percent, meaning more land was coming out of the conservation program than going in, said Rich Harlow, the Michigan Agriculture Department’s farmland preservation manager.

Recognizing that something else was needed, the Legislature then established the Agricultural Preservation Fund, which dispenses grants to local governments to preserve farmland. The funds come from the original PA 116 conservation program, which requires farmers who do not renew their 10-year agreements to pay back the previous seven years of tax credits, plus six percent interest, a system that this year netted $1.3 million—the state’s entire farmland conservation program.

Careful Choices
Even though that is a small sum, it has encouraged counties and townships to purchase some farmers’ development rights, at prices that reflect the difference between the land’s value if it were converted to strip malls or subdivisions and its value for raising crops — typically $2,000 to $4,000 per acre.

Because funding is scarce and the fund’s board strives to ensure that the land saved will remain in agriculture, eligible farms tend to be those with good soils that can be part of larger blocks of protected farmland, and farms in communities that either match the state’s investments or offer their own conservation programs.

In November, the board considered applications requesting $12.8 million to preserve 3,567 acres. The preservation board recommended that Kent and Eaton Counties, five townships in Macomb County, Pittsfield Township in Washtenaw County, and Peninsula Township, which has the oldest purchase of development rights program in the upper Midwest, receive between $252,000 to $271,000 in state funds. Final awards were approved by the state Agriculture Commission on December 7 in Grand Rapids.

Linda Bradford Anderson’s 80-acre cornfield was one of seven parcels, totaling 394 acres in Sparta, Grattan, and Ada Townships, that were included in the Kent County proposal, which together totaled $1.5 million. The county received a $252,000 state farmland preservation grant. 

Whether that is enough to cover the cost of purchasing the development rights to Mrs. Anderson's 80-acre field is not clear. Like the state, Kent County's allegiance to farmland preservation is inconsistent. Three years ago, the county Board of Commissioners voted 14-5 to establish a purchase of development rights program, but the commission has refused to spend any of its general fund revenue on protecting farmland. And, earlier this year, a county subcommittee recommended not paying for farmland conservation at all, asserting tight budgets and the county’s history of not funding specific industries.

But a coalition of conservation organizations, business executives, and community leaders, known as United Growth of Kent County, strongly criticized that decision. The group pointed out that successful farms slow down sprawl, require far less public infrastructure than new subdivisions, and are as vital to the county’s economy as tourism, an industry the county indeed supports through the Convention and Visitors Bureau.

“The agricultural income produced in Kent County has the same multiplier effect that ripples through the general economy that is produced by other, non-agricultural sources of income,” said the coalition’s letter, signed by 30 prominent leaders and organizations. “As the manufacturing sector of our local economy continues to diminish in importance, the importance of the agricultural economy to the overall economic health of the community will grow.”

Growing Interest
Meanwhile, Kent County farmers are clamoring for farmland preservation. Since 2004, 78 Kent County families in 12 townships have applied for funding to conserve thousands of acres of farmland.

“I can tell you there is a lot of interest here in preserving farmland,” said Kendra Wills, a land use educator at Michigan State University who staffs the Kent County Agricultural Preservation Board, and who is United Growth’s project coordinator. “I get at least one call a week from a farmer asking about the program.”

Farmland advocates are raising the money from a number of sources. For example, $1.1 million in federal conservation grants have come to Kent County since 2004. And some township governments are stepping up: A year ago Ada Township residents approved a property tax increase to finance a farmland and open space conservation program, while Grattan Township has committed taxpayer funds for land conservation. Together, the two townships have committed almost $30,000. Three area foundations—Wege, Steelcase, and Grand Rapids Community Foundation—have committed $642,448 to farmland conservation, and farmers have committed nearly $700,000 to the program.

All told, efforts in Kent County have amassed $2.7 million for farmland conservation, or enough to conserve 700 to 750 more acres at the going rate of roughly $3,500 to $4,000 per acre.

Meanwhile Mrs. Bradford Anderson and Jason Bradford know it could be months before they close on the purchase of development rights for just 80 acres of their farm, but they are determined to keep milking 1,200 cows in a business that is profitable. “We want to continue farming. It’s what my son wants to do for the rest of his life,” she said.

Keith Schneider, a writer and editor, is deputy director of the Michigan Land Use Institute. Reach him at keith@mlui.org. This is the second article in a series on farmland conservation and Michigan’s agriculture industry.

Michigan Land Use Institute

148 E. Front Street, Suite 301
Traverse City, MI 49684-5725
p (231) 941-6584 
e comments@mlui.org