| February 13, 2003:
Thriving Blackstar Farms in Leelanau County is an example
of "new entrepreneurial agriculture," a blend of
small-scale farming and business practices that eschews middlemen
and sells finished products directly to customers.
While most American farmers scramble to keep up with agribusiness’s
unrelenting "get big or get out" model, a small
farm tucked away in the scenic northwest corner of Michigan’s
lower peninsula is following a more promising path. Instead
of growing endless acres of corn, soybeans and other commodity
crops, Blackstar Farms in Leelanau County operates a winery,
a stable, a cheese factory, and even a bed and breakfast.
The thriving 120-acre farm is an example of "new entrepreneurial
agriculture," a blend of small-scale farming and business
practices that eschews middlemen and sells finished products
directly to customers.
But there’s more going on at Blackstar than just the
careful aging of award-winning Pinot Noir and some of the
region’s first fruit brandies. Don Coe and partners
Kerm Campbell, a retired corporate executive, and Jack Stegenga,
a stockbroker, have created an entrepreneurial model that
they say allows farmers to hop off the high-volume, low-profit
treadmill that’s killing off so many smaller operations.
When they are not busy boosting their own profits, Mr. Coe
and company are teaching their neighbors how to do the same
by developing fresh, new approaches to an ancient human endeavor.
For instance, Blackstar helps neighboring farmers by purchasing
huge quantities of their fruit. Nearby grower Mike Mikowski
sells his pears to Mr. Coe for about ten dollars apiece rather
than for the pennies the baby food industry paid him, now
that he grows them inside bottles as a first step in producing
Blackstar’s high-end brandy.
Blackstar's other enterprises including housing overnight
guests and using its ample grape harvest to produce high quality
wines instead of simply selling the grapes in the open market.
Recently, Blackstar also heightened the wine-cheese connection
in the county by renting space at the farm to the Leelanau
Cheese Company, a producer of some of the region's finest
hard and soft cheeses. The arrangement is good for Blackstar
because it bolsters their business strategy of promoting Leelanau
County as an agricultural destination for visitors. It's also
good for the cheese company because it provides consumers
easier access to great cheese.
Entrepreneurship Pays in Agriculture
Blackstar’s strategy is the same one entrepreneurs everywhere
use: Increase the value of everything you produce. Compared
to farms still playing the commodity game, Blackstar adds
four more dollars to each dollar worth of product grown on
its property or entering its gate. It’s enough to make
a middleman cry.
This approach, which saves agricultural land from sprawling
development by increasing farm profits and creating jobs,
comes at a pivotal time for agriculture, both in Leelanau
County and throughout Michigan. Small farms are struggling
with low prices for huge commodity crops and rural communities
are slowly becoming ghost towns ripe for more commercial exploitation.
Blackstar’s strategy helps keep land in farming and
improves the local economy. It also offers Governor-elect
Jennifer Granholm several policy options that could produce
new jobs in Michigan. During the campaign Ms. Granholm said
she was looking for ways to stem sprawling development, preserve
Michigan’s remaining farmland, and cut a state budget
that’s facing huge deficits. She identified processing
and product development programs that could increase the value
of commodity crops. She also favored coupling purchase of
development rights programs with promoting consumer demand
for Michigan products. (See: Dick Posthumus Thinks Small Farms
Are Dead in Michigan? He’s wrong. http://www.mlui.org/reportarticle.asp?fileid=16356
).
Using tools that are already at hand, particularly the state
government’s highly effective economic development expertise
and the ingenuity of many of its small farmers, Ms. Granholm
could generate a new policy that catalyzes a host of new farming
operations which create jobs and increase rural economic prosperity
without environmental sacrifices or increased red ink. Suddenly,
the challenge – to somehow find the money to protect
farmland – would become an opportunity to create new
jobs and increased prosperity in Michigan’s farming
communities.
Keep Adding Value
The "beverage business," as Mr. Coe calls winemaking,
helps make Blackstar competitive in a rural county where property
values are soaring and many growers teeter on the edge of
a financial disaster triggered by a disastrously late spring
frost that killed their delicate fruit tree crops. But the
problems run even deeper. "We have a farm community in
considerable trouble," Mr. Coe said. "Their kids
aren't interested in going into farming and they're looking
at escape strategies. What will we do when our savings are
gone?"
So while many farmers see selling land as a survival strategy,
Blackstar is showing that squeezing more value out of every
piece of fruit grown on smaller parcels of land, and avoiding
the high cost of buying and farming ever more acreage, can
be just as profitable. A former corporate executive with the
Hiram Walker distillery in Canada, Mr. Coe noted that the
current era is hardly the first time farmers have downsized.
The region’s first crop, grown right after the Civil
War, was potatoes; a 300-acre farm could provide a good living.
When new, post-war federal taxes forced those pioneering operations
down to half of their size, farmers turned to the cherry trees
that still define Leelanau’s landscape.
"You can make a living on 150 acres of cherry trees,"
Mr. Coe said. "Now we're on to the next intensive agriculture:
Grapes. A family can make a living on 25 acres of grapes."
The Cost of Saving Farmland
The Leelanau Agriculture Alliance, a local farmland conservation
group, also is working on the problem of economic competitiveness.
In September, it released a long-awaited report that documented
the loss of 10,000 acres of active farmland in the county
from 1990 to 2000. Of that amount, 1,500 acres have already
become lots for small homes. The report also noted that development
pressures have increased property taxes and land prices, making
the selling of farmland to residential developers even more
tempting.
The Alliance report calls for purchasing farmers’ development
rights with a mix of local, state, and private funds. The
report found widespread public support in Leelanau for an
annual $105 household property tax hike to preserve farmland,
but it would protect only a fraction of the county’s
farm operations.
Agriculture economist Doug Kreiger, who worked on the Alliance
report, said it will be hard to find enough money to make
a real difference. "It doesn’t have to come through
a millage," he said, but "right now the options
for local governments are limited – development fees,
impact fees, tourist room fees all can’t be done now
under existing state laws."
With many county officials drawing the line at new levies
to protect farmland, raising enough local funds during tough
economic times is challenging. That’s why Mr. Krieger
recognizes that a "program to lease or buy development
rights by itself won’t preserve the agricultural industry.
It has to be part of a larger strategy. Just preserving farmland
isn’t going to do any good. Tax burden and low prices
for commodities need to be addressed."
Benefits: Land and Jobs
Mr. Coe and his business partners are doing just that at Blackstar
Farms. They’ve put 120 acres of former residential land
– an old mansion and its accompanying estate lands –
back into agriculture. Without the value-added strategy, their
land might have become yet another subdivision. Today their
four-year-old venture employs 60 full-time and 20 part-time
people in year-round, high-paying jobs.
Arlin Wasserman, a Kellogg Food and Society Policy fellow,
is policy director at the Michigan Land Use Institute. Reach
him at arlin@mlui.org.
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