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New Comfort on the Farm with Taking Business Chances

Entrepreneurs can save farmland, spur economy

February 12, 2003 | By Patty Cantrell
Great Lakes Bulletin News Service

Patty Cantrell
  Martin and Mary Smeltzer take risks and try something different so they can live an American dream: Work the land, be your own boss, and pass the farm on to future generations. It’s what brought the Smeltzers back to Benzie County, Michigan after 10 years of auto jobs.

When Martin and Mary Smeltzer watch their children playing in the Benzie County orchards and fields that Smeltzers have farmed since the 1870s, they know that they must — and will — find a new way to make a living on that land.

“What do you do? Sell this homestead off just because it’s not making money right now?” Martin Smeltzer asks.

Not the Smeltzers. They are part of a new generation that is willing to take a risk and try something different so they can live an American dream: Work the land, be your own boss, and pass the farm on to future generations. It’s what brought the Smeltzers back to Martin’s hometown in 1992 from 10 years of automobile industry jobs. And it’s what has them, and many other small farmers, looking for new ways to make a profit in an increasingly merciless farm economy.

“I’m not talking about abandoning the wholesale fruit market,” Mr. Smeltzer said of his current business. “We’re looking for ways to supplement that with a different farm business or find new niches for what we already produce.”

And like many other farm families committed to their land and communities, the Smeltzers believe they are creative and persistent enough to succeed. In fact, so many farmers are pursuing new economic options on their land that the fourth annual Northern Michigan Small Farms Conference, held on a recent snowy Saturday at a church in Gaylord, was one of the largest business gatherings in the northern Lower Peninsula. The conference’s popularity demonstrates that “new entrepreneurial agriculture” is becoming a powerful tool that leaders in Lansing and towns across the entire state can use to grow jobs and help protect farmland.

Something’s Cooking
More than 450 people crowded classrooms and a chapel auditorium at the small farms conference on Jan. 25 to learn about marketing and management from speakers that have attracted attention from The Washington Post and CNN. Hallways buzzed with excitement over new products, new methods, and opportunities to bring new profits home.

“That's pretty impressive!” Tom Albrecht, professional event coordinator and co-owner of Traverse City-based Meeting Site Solutions, said of the turnout, which reflected an increase of 150 people over last year. He said that just a few area conferences of any sort are larger, with 1,000 people or more.

But even a well-attended “small farms” conference may not sound very impressive to most people in the mainstream business community. Farms don’t employ many people, and family farms seem to be a dying breed. In fact, farms do not even count as business establishments — like clothing stores, construction companies, or accounting firms — when analysts size up local economies.

Yet the land that farmers hold and the small towns they support — with taxes, purchases, and participation in churches and schools — are northern Michigan’s bread and butter. That is the driving force behind both this conference and a brand new partnership of local and state agencies working to bring farmers the business skills and resources they need to help their land and communities thrive.

Republican state Senator Jason Allen of Traverse City is one of the growing numbers of elected leaders who believes it’s time to start thinking of farms as essential elements of the small business sector. They’re just like Main Street retailers and other locally owned businesses that are committed financially and personally to their communities, he said. To save farmland and rural economies, Sen. Allen says an important question is, “How can we carve out these niche businesses for farms? What are those other ways you can encourage more revenue streams per acre coming onto your farm?”

Solution Shift
Key to helping entrepreneurial agriculture succeed is recognizing that much of the publicly funded assistance farmers now receive does not match their needs.

“State government needs to understand where these farms are and where they want to go,” says Jack Middleton, Otsego County Extension Director and one of the conference’s organizers. “Instead of helping them increase production so they lose only 25 cents a bushel rather than 50 cents a bushel, we need to be talking about how to add value to that product, how to find and reach new customers.”

Some state agencies are taking notice and taking action. For example, this year the Michigan Small Business Development Center launched a major, statewide effort to provide business training for farmers at its regional offices in conjunction with Michigan State University Extension and the U.S. Department of Agriculture.

The courses are a good match between the Michigan SBDC’s business expertise and the fundamental management and marketing needs of farmers interested in new ventures, said SBDC Director Carol Lopucki. “We felt we brought something to the table in terms of the business side of it. Working in partnership with the lead players in agriculture made sense.”

Another partner in the effort is the Michigan Economic Development Corporation, the state’s lead resource for generating jobs and economic growth by recruiting and developing businesses.

“We’re taking it in small pieces,” said MEDC Vice President John Czarnecki. “First is how to come up with some business successes so people can stay on their farms.” He added that, in addition to supporting the SBDC’s business training courses, the MDEC is working to develop “kitchen incubators” around the state, where farmers can produce and test new value-added products, such as specialty cheeses or new, local brands of snack foods.

Tip of the Iceberg
So far, the response to this new entrepreneurial side of farm assistance has been overwhelming, indicating that these agencies are on the right track.

The Boyne City-based Northern Lakes Economic Alliance has a full load of students for the 10-week business training course it is running as an SBDC satellite. Twenty four people from as far away as Benzie County — a two-hour drive — brave icy, snowy roads every Wednesday evening to work through the market research, financial analysis, and production schedules that go into the kind of business plans that banks like to see.

“We’re pleased but not surprised by the response,” says Wendy Wieland, NLEA’s value-added agriculture specialist. “I think we’ve just touched the tip of the iceberg, really. There are so many people looking to innovate their agricultural business or get into a new agricultural business.”

Martin and Mary Smeltzer are taking the class. Their strategy is to get into the business of marketing specialty food products for other farmers who like to raise crops and make tasty products but are not good at selling them. They’re also hoping that the customer base they develop might buy something new and different the Smeltzers could grow on their own farm.

The Leelanau Conservation District has begun helping farmers find new options. Director Judy Egeler says the district will host a grape-growing workshop March 12 to help answer questions that an increasing number of farmers have about working with the county’s new, successful wineries.

“Every year there’s another winery or two opening up in the county,” she says. “An awful lot of people are interested in the production of grapes as an alternative to some of the other fruit crops as a way to augment their income.” 

Not Just Jobs
The new, entrepreneurial activities these workshops aim to generate can add more to rural, regional economies than just a few jobs.  A new report from Kalkaska County Extension about the Traverse Bay region, for example, shows that without farms and their purchases of fencing, machinery, and groceries stimulating the local economy, employment would shrink by as much as 21 percent in Leelanau County, 14 percent in Antrim County, and 10 percent in Benzie County.

And although farms pay a relatively small portion of total tax revenues in a given region, they are actually much more valuable than those numbers indicate. Both state and national studies show that, for every tax dollar a farm pays, it uses only about 30 cents in municipal services, such as fire and police protection. That’s a big bargain compared to new residential development, which requires about $1.50 in services for every tax dollar paid. In essence, farms provide a sizeable tax subsidy to their communities.

Probably the most powerful and least quantifiable economic benefit of farms, however, is their contribution to landscape and quality of life, says Bill Palladino, regional economic specialist with the Northwest Michigan Council of Governments and the new director of the Traverse Bay area’s SBDC office.

“The number crunching that is done with economic development always comes down to jobs. In manufacturing, it’s pretty easy to see where jobs are created or maintained. With agriculture, it’s a little more difficult to show those things,” Mr. Palladino said.

“But our  lakes, farmlands and forestlands are some of our richest resources. They also drive the largest industry up here, tourism.”

Patty Cantrell, an economist and journalist, manages the New Entrepreneurial Agriculture project at the Michigan Land Use Institute. To reach her, write patty@mlui.org. For more information on New Entrepreneurial Agriculture see the Farmland Protection section of the Institute's Web site.

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