Predicts Future of Michigan’s Food and Agricultural Industry
The Michigan Economic Development Corporation today released a study that predicted a mixed future for food processing and agriculture in Michigan. The study contained a number of suggestions to revitalize Michigan’s food and agricultural industries, including strengthening target and niche markets, establishing differential or farmland use-value assessment, and establishing a strategic initiative center for agriculture, among others.
Conducted by Sparks Companies, a leading food and agricultural consulting firm, the Trends in Michigan Agriculture study pointed to powerful global and national trends currently influencing agricultural production in the US and Michigan. While these trends will likely limit Michigan’s ability to influence economic change in commodity agriculture, the study also outlined sectors with strong future growth potential and recommended the state pursue and expand agribusiness where niche markets exist.
"These global trends may be difficult to reverse," said Doug Rothwell, President and CEO of the Michigan Economic Development Corporation. "However, recognizing these trends is half the battle. Michigan’s strong economy makes it easier for our state to act."
Perhaps the brightest sector in Michigan agriculture is greenhouse and nursery products. Nursery products have been the state’s fastest-growing agricultural sector over the past three decades, according to the report. Michigan’s climate and geography make it likely that this sector will continue its strong, positive growth. In addition, Michigan’s fruit crops should also experience positive growth over the next five years.
However, the state’s traditional reliance on canning and processing fruits and vegetables will require significant changes to continue to grow the industry. Changing consumer tastes and demands for fresh produce may keep the industry stagnant, according to the study. On the animal agriculture side, the outlook for the cattle and hog sectors in Michigan is moderately positive, according to the report.
"Michigan agriculture is in a crisis. Enacting the recommendations of this study will help save farmers and farmland. Providing tax relief, expanding agriculture processing and enhancing the agriculture biotechnology industry will help Michigan farmers and secure a future for Michigan farm products," said Senator George McManus. "Many of the recommendations complement what the Senate Task Force on Agricultural Preservation offered after its eight public hearings last year."
In order to make the best use of study results, several recommendations were given to help the Michigan Department of Agriculture (MDA) and the Michigan Economic Development Corporation effectively support Michigan’s food and agricultural industry. The recommendations include:
- Differential property tax assessment, also called farmland use-value assessment, criteria should be enacted to preserve farmland and reduce the property tax burden.
- A strategic initiative center for Michigan’s food and agricultural industry should be created.
- Michigan Economic Development Corporation should work to attract the agricultural biotechnology industry to the state.
- The current state law regarding treatment of production agriculture cooperatives should be updated.
- The MDA should strengthen its Office of Agriculture Development and its relationship with the Michigan Economic Development Corporation and Michigan State University to promote the agricultural processing industry in the state.
- The MDA and Michigan Economic Development Corporation should work in partnership to explore opportunities to attract and expand agribusiness and food processing.
- The State of Michigan should continue efforts to fully connect and integrate its transportation system.
- Classes in English as a second language should be offered to increase the efficiency of processing operations.
- Michigan State University should enhance its placement and executive education services in order to attract skilled workers to the state.
"We will be closely reviewing recommendations in the Sparks report," said Representative Mike Green, chair of the House Agriculture committee. "We know that profitability on the farm is key to reducing the amount of farmland lost to development and preserving a way of life in Michigan."
The Sparks study is one of a handful of recent reports that suggest significant changes must occur in the food processing industry to stabilize the state’s agricultural base. A December 1999 study by Michigan State University on perceptions of Michigan’s business climate for food processors and a 1998 survey of Michigan food processors both indicate that agriculture in the state must be more innovative in the 21st century.
"While the reports outline steep challenges to long-term profitability, we believe the entrepreneurial spirit of Michigan farmers together with state support of Project GREEN and the Animal Initiative will lead to a more profitable future for agriculture in Michigan," said MDA Director Dan Wyant. "To be successful in the 21st century, Michigan agriculture must adopt new technology and pursue value-added products."
Contact: Kathleen McMahon, Michigan Economic Development Corporation, (517) 335-4590 Denise Yockey, Michigan Department of Agriculture, (517) 335-1300