| BLOOMINGDALE
-- Gabriel Barajas is the picture of success. At 21, this
handsome young man with the slightest mustache sits in his
kitchen and explains how he might start a fresh blueberry
marketing business.
Mr. Barajas first tested the market last year, when he brought
some berries from his father’s 33-acres of bushes in
Van Buren County to the Benton Harbor Fruit Market (www.bhfm.com),
which serves wholesale buyers and fruit and vegetable stands
from Wisconsin to Indiana that are searching for the freshest
produce.
“My dad said to just give him what the processor would
pay and I could keep the rest,” Mr. Barajas said.
The Barajas berries quickly established a reputation for
good taste among the buyers in Benton Harbor. They also made
the young man a fair profit, because the difference between
the prices farmers receive for fresh berries and the prices
that canning companies and other processors pay for bulk loads
can be significant, especially when the berries are so good.
“They started calling here for the berries,”
he said. “People were saying, ‘Check out the Barajas
berries.’”
Looking into Gabriel Barajas' future is like looking at
the best possible scenario for Michigan agriculture in the
21st century, according to Soji Adelaja, John A. Hannah Distinguished
Professor in Land Policy at Michigan State University. Dr.
Adelaja, who directs the university’s Land Policy Program,
recently led a team of researchers trying to determine where
the best opportunities are in Michigan for securing and growing
agriculture—the state’s second-largest industry.
The “success factors” the team used indicate that
Mr. Barajas is on the right track in developing new markets
for fresh berries.
With nearly everything changing in the world of farming—from
federal subsidies that may soon decline, to the increased
vulnerability of cross-country shipping, to rising fuel prices—it’s
high time Michigan developed a new vision for successful agriculture,"
Dr. Adelaja said. And, in an era when only very small and
very large farms seem to be prospering, he insists that size
really does not matter.
“It’s a matter of which farms are the most resilient,
diverse, and flexible,” Dr. Adelaja said.
Success Factors
Mr. Barajas says he will expand his wholesale blueberry
marketing experiment next year. If all goes well, he will
put his pending business degree from Western Michigan University
to work, partnering with his father, mother, and uncle, who
operate a medium-sized berry farm in the leading county of
the leading state for Highbush blueberries. Former farm workers
from Mexico, the Barajas started off with five acres.
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Mr. Baraja also is a test case for Dr. Adelaja’s “success
factors,” which include a farm’s closeness to
customers, such as the southwest Michigan fruit belt’s
proximity to urban centers like Grand Rapids and Chicago,
and a farm’s ability to respond to new opportunities,
such as delivering fresh foods to nearby schools. His analysis
also puts a high value on the potential for farms to add value
to their products, such as putting Mr. Barajas’ blueberries
into special sauces. Tenacity and crop diversity are also
key, something that Michigan’s Hispanic farmers possess
in spades: The number of Hispanic farmers has grown in the
state by more than 500 percent since the late 1990s, and many
are bringing new varieties of chili peppers and other products
to market.
The study, which was prepared for Michigan Governor Jennifer
Granholm’s administration, also has a refreshing surprise
for all those who throw up their hands over the fact that
53 percent of Michigan farms annually lose money. Because
so many of those money-losing operation are medium size, and,
under current market conditions, are too small to make it
in the huge global trade scene and too big to be “niche”
farms selling to high-end restaurant markets, the conventional
wisdom is that they are doomed.
Dr. Adelaja disagrees: Under future market conditions, medium-size
family farms actually have the most going for them in terms
of resiliency, diversity, and flexibility.
“I’m saying the farms in the middle are more
likely to be successful and that’s why we should help
them, versus they’re in trouble and we should help them,”
he said.
An earlier study that Dr. Adelaja conducted in New Jersey,
as executive dean of agriculture and natural resources at
Rutgers University, put it very clearly: “We found that
the flexible mid-sized farms generally have the entrepreneurial
skills, education, savvy, energy, and flexibility to respond
to the demands of consumers, which in the future will focus
more on product quality, organic characteristics, wellness,
health, nutrition, and community connection. While these farms
are struggling today, the new price, market, and regulatory
regime will make these farms dynamic in the future.”
And it is the future of Michigan that Dr. Adelaja points
to when he repeatedly reminds policymakers in his reports
that agriculture is one of the state’s greatest economic
assets. According to the Michigan Department of Agriculture,
one million jobs and $59.1 billion in economic activity in
Michigan are linked to farming. Those numbers could increase
greatly when things like agritourism or growing bio-fuels
from farm crops are considered, said Mitch Irwin, MDA director.
“We can grow our way into new production, new jobs,
through agriculture,” Mr. Irwin said.
The growing market for better food—driven by health
concerns and consumer demand for fresher foods—is also
encouraging innovation and facilitating new opportunity in
Michigan agriculture. The Michigan Food Policy Council (www.mda.state.mi.us/mfpc),
which Governor Granholm established last summer, is charged
with developing action plans, by October 2006, for strengthening
farms and improving public health through good food.
Michigan’s Mixed Record
Michigan has a mixed record when it comes to helping farms
take advantage of such market changes and the attributes that
Dr. Adelaja says are key to farmers’ success and Michigan’s
future prosperity. One indicator is how poorly Michigan leverages
federal money with its own investments in farm business development.
For example, the state landed just under $400,000 in federal
Value-Added Producer Grant awards this year. Grants went to
the Michigan Turkey Producers Cooperative Inc. in Zeeland,
MOO-ville Creamery in Nashville, and Shoreline Fruit Inc.
in Hart.
Compare that to Missouri, which raked in $1.75 million,
more than four times more money than Michigan received, for
16 farm ventures. Michigan—the state with the second-widest
variety of crops after California and an enviable market position
thanks to its proximity to half the population of North America—ranked
13th out of 43 states that received awards.
One reason Missouri did so well is that it has focused on
helping farm businesses grow to the point where they can secure
significant commercial loans or grants, said Mary Hendrickson,
at the University of Missouri’s Rural Sociology Department.
“Our state-level value-added producer grant program
had a lot to do with it; we’ve had one longer than most
states,” Ms. Hendrickson said. In addition to granting
about $2 million each year to its food producers, Missouri
offers a range of assistance to farms with marketing and distribution
challenges and offers $6 million annually in salable tax credits
for farms that invest in new value-added ventures, like on-site
processing.
Michigan attempted to do some of the same in 2000, when then
Governor John Engler signed the Julian-Stille Value-Added
Act (click
here to read the Act).
On paper, the law gave the MDA $5 million to put behind new
food and farm product development. The money was supposed
to come from utility companies out of their payments into
the Uncollectibles Allowance Recovery Fund. But, five years
later, the MDA has yet to receive any of the money originally
promised to the program. It has issued only one round of grants,
in 2002, and that one-time shot of money came from the U.S.
Department of Agriculture.
“All I can say is we haven’t seen one dime,”
said Bob Craig, director of MDA’s Agriculture Development
Division, of the mysterious UARF.
Innovating and Incubating for Success
But the idea that Michigan has an economic ace in the hole
with its diverse farm sector is catching on as leaders grapple
with the continuing loss of high-paying jobs in manufacturing.
In November the Legislature and the governor pledged $10 million
to the Julian-Stille grant program over five years as part
of the new $1.5 billion 21st Century Jobs Fund.
Now what’s needed, according to the Land Policy Program
researchers, is an innovation fund to make sure that Michigan
farms have the support they need to move from idea to action.
Specifically, they have proposed establishing the Innovation
Fund for Michigan Agriculture, which would bring needed financial
capital to food and farm entrepreneurs and tie together and
supplement the initiatives that do exist in Michigan but suffer
from a lack of state vision and proper coordination. The researchers
estimate a $1 million annual fund could fill the gaps in Michigan’s
patchy support for innovative agriculture.
One of the existing programs the fund could work with is
MSU’s new Product Center for Agriculture and Natural
Resources, which provides business development support to
farms. It launched in 2004, thanks to federal grants and Tom
Guthrie, the late director of the nonprofit Michigan Integrated
Food and Farming Systems group.
Mr. Guthrie and MIFFS were also instrumental in securing
federal funding and state economic development grants to set
up business incubators that offer entrepreneurs low-cost access
to commercial equipment and food industry expertise. One of
the incubators, located in Hart, will open early in 2006.
The other, in the Thumb’s Huron County, is still in
development.
Ron Steiner, the driving force behind Hart’s incubator,
called The Starting Block, recently walked a visitor through
the renovated building that will house it.
“People are really excited about this being available,”
he said, sounding like a proud and excited new parent. “We’re
getting a lot of interest.”
Mr. Steiner long championed property tax breaks for food
processors that make major investments in new technology or
product innovations. His and others’ efforts led to
the establishment of agricultural processing renaissance zones
in the late 1990s. Michigan now has 17 such zones and a commitment
by anchor companies to 1,166 new jobs and investing $548 million.
Once a zone is established, innovative food processing companies
can locate there and enjoy similar tax benefits.
Mr. Steiner looks forward to the day when some of the food
businesses that come through the Starting Block incubator
will graduate to places of their own in one of Oceana County’s
four such zones.
“It’s a perfect synergy,” Mr. Steiner
said. “We can get them started from a knowledge base
and entrepreneurship standpoint and then we’ve got the
perfect place for them to go for continued low-cost support.”
One of the entrepreneurs knocking at the Starting Block’s
door in the future may well be Gabriel Barajas. Neither he
nor his father, Filburto, is discouraged by agriculture’s
naysayers. They know they can make it.
“See that little field over there?” Filburto
Barajas said, leaning on a snow shovel in his enterprising
son’s driveway. “We’re going to plant blueberries
there.” 
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