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Beyond Convention on Farm Profitability, Land Conservation

Michigan gubernatorial candidates urged to consider promising home-grown ideas

September 6, 2002 | By Patty Cantrell
and Keith Schneider
Great Lakes Bulletin News Service

  Democrat Jennifer Granholm and Republican Dick Posthumus have been invited to discuss their ideas about how to improve farm profitability and land conservation at a farmland protection conference in Lansing on September 28.

Lieutenant Governor Dick Posthumus, the Republican gubernatorial candidate who was raised on a farm in West Michigan, says the prescription for encouraging profitable farms and protecting farmland is to first pass a constitutional amendment that lowers agricultural property taxes, and second to eliminate regulations pushed by "radical environmentalists."

His opponent, Democratic Attorney General Jennifer Granholm, who is far more sympathetic to environmental goals, says keeping farmers on their own ground involves developing sensible land use measures that prevent sprawl from "gobbling up green space," and investing public funds in "farmland and open space conservation."

In interviews two weeks ago with the Michigan Farm Radio Network, the candidates offered markedly different perspectives on how to help farmers except on one more crucial facet of farm profitability: adding value to their products.

Mr. Posthumus cited a turkey processing facility in Grand Rapids, and ethanol plants in the Thumb region as examples of value-added processing that he would encourage. "Those things are part of my agenda as Michigan’s next governor," he said.

Ms. Granholm noted that "in light of the strength of agriculture to our economy, and the fact that we produce over 120 different types of agricultural commodities, it’d be crazy for us not to focus on value-added processing, marketing, exporting our homegrown renewable commodities."

Mr. Posthumus and Ms. Granholm have been invited to discuss their ideas about how to improve farm profitability and land conservation at a farmland protection conference in Lansing on September 28. "For the first time ever, the environment and farmland protection have surfaced as platform issues in Michigan's race for governor," said Scott Everett, Director of the American Farmland Trust's Great Lakes Regional Office in Lansing, which is sponsoring the event.

Indeed, both candidates could expand on the idea of adding value to farm products by recognizing promising new home grown and government-encouraged initiatives to support the farm economy, curtail the loss of farmland, and protect the environment.

One is the role that economic development agencies are starting to play to support and expand regional farm economies, just as they do with the manufacturing sector. Another is a new entrepreneurial spirit among farmers that is leading to real profits as they begin to think and act like small businesses rather than bulk producers for distant buyers.

  A new entrepreneurial spirit among farmers is leading to real profits as they begin to think and act like small businesses rather than bulk producers for distant buyers. In Petoskey, Bill’s Farm Market is putting that principle to work for local growers.

A business model germinates in northern Michigan
One example is now taking shape in the rolling hills of Antrim, Charlevoix, and Emmet counties at the tip of Michigan’s mitt, a region covered with small dairy and fruit farms and with tight knit rural communities that farm families built. This picture of what the three-county area is all about hit Tom Johnson, executive director of the regional economic development corporation, like a rock one day two years ago as he drove down one of the area’s many quiet country roads.

Mr. Johnson says: "I asked myself, ‘Does agriculture generate money in the regional economy? Certainly. Is it part of the economic base? Certainly.’" Then, he says, he had to ask himself why his organization, the Northern Lakes Economic Alliance, didn’t work with agriculture.

The answer revealed a tall wall that has built up over the years with farmers, farm organizations, and agriculture agencies on one side and business leaders, economic development groups, and departments of commerce on the other. Working with local Michigan State University Extension offices, he has put farm and business groups together on the job of supporting and expanding the region’s most basic industry and its greatest quality-of-life asset.

Mr. Johnson hired Wendy Wieland, an agribusiness development specialist, to study the area’s farm base, explore new markets, and work with farmers in the region to capitalize on the new opportunities. "We want to provide farmers with another choice besides selling their farm to developers," she says. "If we can help them increase their choices and decrease their risk, then we feel those people will be here."

Oilseed Production in the Thumb
Another example is Vern Reinbold, a farmer from the Thumb region who wasn’t satisfied selling his organic soybeans at four times the price of conventional soybeans. Mr. Reinbold knows the real money — and the only way to get off the "get big or get out" treadmill of large-scale agriculture — is to take his soybeans a few steps closer to the consumer.

"There are companies out there that are taking that soybean that sells for $18 a bushel organic, or $4 conventional, and turning it into hundreds of dollars per bushel," Mr. Reinbold says. "I’m not saying there’s anything wrong with that. I’m saying, let’s go get some of that."

And that they are. Mr. Reinbold and 209 other soybean farmers created the Thumb Oilseed Producers Cooperative in 1997 to turn the crops they used to hand over to middlemen into higher-value food products. The business is part of a new generation of farm cooperatives in the United States that do much more than just buy members’ crops and sell them in large commodity volumes at low global market prices. Instead they are developing and marketing products from their raw materials.

The Thumb Oilseed Producers Cooperative has developed its own trademarked, nongenetically modified soybean oil and is positioning itself to take custom processing jobs through its new certified-organic refinery. "Doors are swinging open to us now because we can give that organic assurance to those customers who want it," Mr. Reinbold says.

Jo Ann Rutkowski, the cooperative’s chief operating officer, says this focus on consumer demand is a dramatic shift in traditional thinking for Michigan’s row crop farmers. "I used to work at a feed mill, where we watched the crops go in the rail car and never thought about them again. Now I’m seeing a whole new side of it. I’m excited to go in the store soon and buy soybean oil under our NexSoy® trademark."

The cooperative is meeting the goals of its five-year business plan, say executives. "All of our projections and the business plan show us returning a profit to our members in the next two years, if not sooner," said Ms. Rutkowski.

Mr. Reinbold says the cooperative’s members simply decided to take control of their situation. "We said, ‘Instead of griping about low prices, why don’t we spend the same energy and try and improve the value of the crop?’"

A more robust farm economy
Like farmers, local governments are beginning to recognize that the future of their farmland and rural communities depends on developing a new farm economy, one that seeks profits by producing and marketing to consumer demands rather than producing as much as possible for whatever price bulk markets will pay. Viable, consumer-oriented farms — whether one-acre flower growers on the edge of town or a group of fruit producers marketing to a local hospital — mean more green space, fresh food, and local commerce. That’s the most valuable part of entrepreneurial agriculture for communities that need and want a quality of life that keeps and attracts residents, says Dr. Dick Levins, professor of applied economics at the University of Minnesota. "It preserves a rural environment, and it preserves a pleasant living environment in a way that’s self-supporting, and I think that’s not given enough attention."

The challenge now before Michigan’s government and economic development officials, say authorities, is to recognize they have a new and important role in increasing the number of such entrepreneurial farmers in their communities. At stake is nothing less than the future of Michigan’s rural economies, the fate of its reawakening cities, and the power of its valuable farmland to protect water and wildlife.

Patty Cantrell, a journalist and economist, directs the Institute’s Entrepreneurial Agriculture project. Reach her at patty@mlui.org. Keith Schneider, the Institute’s program director, contributes regularly to the Detroit Free Press, New York Times, and gristmagazine.com. Reach him at keith@mlui.org.

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