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Improving the Business Environment

Smarter regulations help supply meet demand

March 26, 2009 | By Patty Cantrell
Great Lakes Bulletin News Service

Patty Cantrell
Small processing operations like Lake City’s L&J Meat Market are harder to find as industrial-scale regulations squeeze them out.

In early 2008, schools all across the country were throwing away hamburger patties, burrito filling, and other beef products after a federal recall of millions of pounds of beef from a California meat processing plant.

At the Grand Traverse Area Catholic Schools in Traverse City, however, students ate sloppy joes just like normal. That’s because their beef came directly from a fourth-generation farm just 35 miles away.

“We didn't have to worry about the recall at all,” dining services administrator Michael Bauer told the Traverse City Record-Eagle that week. “We're trying to use that whole mentality of locally grown products. It hasn't been stored in a warehouse in California.”

But, surprisingly, Benzie County beef farmer Randy Rice, who supplies the Catholic schools, does have to worry about the recall. Each time the big companies have a problem, federal regulations get stricter, and smaller companies have to bear the same compliance cost even though their operations, serving a smaller territory, do not pose as much risk to as many people.

That means more stress, for example, on the already tiny number of meat processors in Michigan that are still in business and able to serve Mr. Rice’s growing operation. It also means more stress on Mr. Rice himself, and his cattle.

“I have to drive an hour farther to get my beef slaughtered now that the closest plant, 30 minutes away, stopped doing it,” he said. Even though the closer plant, in Manistee, is still in business, it is no longer slaughtering animals from local producers because of the additional paperwork and procedures that came out of an earlier nationwide recall.

Meat processing is just one example of a big, thorny thicket of regulatory issues involved in the expansion of local food markets. It’s a hot topic on the road to regional food systems because regulations are a key part of how encouraging or discouraging the business environment is to entrepreneurs.

Of course, smaller, local producers expect to be held to the highest food safety, environmental, and labor standards. Yet the rules that apply are generally written for large-scale factories, not small-scale farmsteads. This “scale neutrality” in regulations can create many unnecessary cost barriers.

Zoning for Success
Another major barrier to local farming and food production in Michigan is the welter of different township, village, and county zoning regulations.

Most zoning ordinances define farms as crop producers only: For example, farmers may produce milk from cows on their land, but they may not make cheese with it. As more farms take on cottage-scale processing, like artisan cheese making, they run into zoning regulations that either prohibit such activities or make it costly to get approval.

Fortunately, some communities are thinking ahead.

For example, 14 years ago residents of Peninsula Township, just outside of Traverse City, were the first in the state to tax themselves to save farmland by purchasing farmland development rights. But even before that historic initiative, the area’s residents and leaders knew that such a program, known as purchase of development rights, was not by itself enough to support the local farming culture that protects the township's breathtaking landscape.

“We recognized we need to preserve an industry,” said Gordon Hayward, Peninsula Township planner.

So, in August 2002, the township board took another major step forward. It adopted Farm Processing Amendment 139, making it the first township in Michigan to move a set of processing and retail activities from “special uses” on farms to “uses by right.”

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