Growing The Growing Economy

September 8, 2006
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BEULAH — Expanding the state’s economy by nearly 1,900 jobs and creating another $187 million in annual personal income might only cost Michigan $9.5.million. And the money wouldn’t be spent on high-tech gadgets or bio-tech promises.

The cash would fund a campaign to reposition Michigan fruits, vegetables and potatoes as fresh foods in the wholesale market, where state consumers spend nearly $2 billion each year. Right now, most of these products become ingredients in processed foods.

The potential of a fresh market scenario was recently laid out for many in agriculture, the state’s second-largest industry, in a study called Eat Fresh and Grow Jobs. The results from the research piece are being digested by the Michigan Food Policy Council, which will soon give Gov. Jennifer Granholm its recommendations on how to promote a stronger business climate for the industry.

“We are keenly focused upon keeping up the momentum of this growing sector through the promotion of our quality, homegrown products,” said Mitch Irwin, director of the state’s agriculture department and head of the council.

The C.S. Mott Group for Sustainable Food Systems at Michigan State University conducted the study with the Entrepreneurial Agriculture Project of the Michigan Land Use Institute and the W.E. Upjohn Institute for Employment Research. The work was a groundbreaking piece as it was the first job-forecasting study ever done for the fresh food business.

“What this study shows is that Michigan can improve the economy by creating linkages between farmers and consumers throughout the state,” said Michael Hamm, director of the C.S. Mott Group.

“There are big opportunities to tie into the national trend toward local food, use that to add to their bottom line, and create jobs with their increased spending capacity,” added Hamm.

Michigan farmers could gain $164 million in annual revenue from a successful switch to the fresh food market. And that figure would be in addition to the growth in jobs and personal income.

The requested investment, $9.5 million, is small for a statewide economic endeavor. The Eat Fresh report pointed out the figure amounts to just $5,000 for each potential job the effort could create, and nationally that number is closer to $15,000.

“If you just go on the cheap, compared to what you normally spend, you can generate some jobs,” said Patty Cantrell, director of the Entrepreneurial Agricultural Project at the Michigan Land Use Institute, from her office in Beulah.

“That amount of money could accomplish a lot, because a lot of the recommendations are coordination things and emphasis things. Where are we putting our research dollars? Or where are we putting our efforts with farm business development? Are we looking at this fresh market as a huge opportunity? Or are we putting most of our eggs in the basket and selling more apples to China with China shipping them here? Those sorts of things,” she added.

The study has excited many in the industry because they know that Michigan offers the second-widest variety of grown products in the nation, right behind California. They also know that the agriculture and food industry employs 1 million in Michigan and is worth $59.1 billion in revenue to the state’s economy each year, according to a recent MSU study.

The Eat Fresh report said 74 percent of Michigan fruits and 44 percent of its vegetables are sold at relatively low prices as ingredients for canned, frozen, dried and other processed products. It added that much of the $1.9 billion worth of higher-value fresh fruits and vegetables bought and consumed in Michigan comes from other states and countries.

Eat Fresh also noted that consumers are buying more fresh fruits and vegetables, while chefs and restaurant owners are purchasing more locally grown products. Both actions are contributing to a growing market, and Cantrell said it was time for the industry to increase its investment in the fresh sector to take advantage of that trend.

Cantrell also said economic developers, organic farmers and those in the health industry are getting involved in building a rural-to-urban economy. They are seriously looking at redeveloping brownfield sites to help establish a physical foundation for that system.

“There is a lot of business infrastructure and business opportunities that come between the actual supplier and the local food buyer, so building that economic infrastructure is a real focus of that effort,” said Cantrell, whose agency has formed partnerships with business and economic development groups in the northwest region of the state.

So the advancement toward capturing more of the fresh market is underway and, at least for the time being, it is being driven at the local levels. Their hope is that the Eat Fresh study will leave enough of an impression in Lansing that the state government will climb aboard and supply some of the fuel for the rest of the journey.

“There is a very large grassroots movement in Michigan. A lot of local organizations are working together to bring these ideas forward at the local level and the state level,” Cantrell said. “It’s really a statewide policy evolution.”    

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