| 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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