Agribusiness stimulates struggling Mich. economy
While Michigan’s overall economy stumbles, one sector is growing at an unprecedented pace.
An MSU study released this month found Michigan’s agribusiness sector increased 12 percent in 2007, the year the data was collected. The number represents more than double the amount of growth in the industry during the previous two years combined.
William Knudson, an MSU professor of agriculture, food and resource economics, said population growth and a resulting growth in food demand is the main reason for the rapid agri-food and agri-energy expansion.
“There are several little reasons for the expansion, but one primary,” he said. “Westernized Eastern countries like China and India have increased their calorie consumptions exponentially since the 1980s.”
The increase in calorie consumption has put added stress on the rest of the world to produce crops and meet increased food needs. Agriculturally rich states such as Michigan are prime places to increase production to meet those needs, Knudson said.
The industry growth in the state shows one of the few bright spots in Michigan’s economy as the auto industry has lost thousands of jobs in the past year.
Agri-foods make up 20 percent of the economy and 25 percent of the state’s work force, said Jennifer Holton, Michigan Department of Agriculture spokeswoman.
“It’s been a force of economic stability here,” she said. “Folks still need to eat. There will always be jobs to make food.”
MSU professor of labor and industrial relations John Beck said there are several in-state companies creating jobs and expanding operations, which will lead to opportunities for unemployed auto workers.
“Gerber, Minute Maid, Post and Kellogg’s, just to name a few staples,” he said. “They offer jobs all over, from farming to manufacturing to retail.”
Gerber recently made the decision to continue operations in Fremont, Mich., and undergo a $75 million expansion, Holton said. The expansion will keep 11,000 jobs in the state, while adding 200 new jobs and more from indirect sources, she said.
“They buy food from 200 Michigan growers and packaging from 11 Michigan suppliers,” she said. “With all these great things going on, the future is bright in Michigan’s agricultural industries.”
The idea of Michigan being an agricultural powerhouse goes back to Henry Ford’s belief that automobiles should be built using only Michigan resources, Beck said.
Other major food companies, like “JIFFY” Mix, Kellogg’s and Yoplait USA, along with beer and wine makers, are maintaining and expanding their holds in Michigan, Holton said.
“There are so many cutting-edge opportunities in this industry,” she said. “It should definitely help pick up some of the slack from the growing unemployment.”
Published on Sunday, February 22, 2009
By the numbers
Michigan’s Agribusiness
12 percent growth in 2007
5.9 percent growth from 2004-06
$71.3 billion investment in Michigan’s economy in 2007
20 percent of Michigan’s economic activity
25 percent of Michigan’s work force
1.05 million jobs
Source: MSU Product Center for Agriculture and Natural Resources
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Now, I know that many would argue that these are numbers from 2007 and that it was a different economy than the present day. True, but as you can see from another article I have below in response to the budget cuts on some of the state funded agricultural departments - these people not only help this industry thrive, but also have a major impact on the entire population. Also, there are projected figures pointing to job-growth in 2010, and population growth causes for an increase demand in food.
Cuts to Michigan's Ag Department Budget Put Public at Risk
Michigan Ag Connection - 02/23/2009
Think massive cuts to the Michigan Department of Agriculture (MDA) budget don't affect the Average Joe? Think again, says the Michigan Farm Bureau (MFB).
A whopping 20 percent reduction in state funding for MDA stands to impact consumers and the general public just as much as the next farmer, according to the state's largest general farm organization.
"Whether or not people recognize it, MDA touches the lives of every single person every day in one way or another, whether it's inspecting the food we eat and milk we drink, measuring the gas we put in our car, or numerous other functions we take for granted," said MFB President Wayne H. Wood.
The Governor's budget recommends slashing $18 million from MDA's budget. The cuts extend across all MDA departments, not even sparing those charged with:
-- Food safety and quality.
-- Dairy inspections.
-- Plant and animal disease tracking, prevention and eradication.
-- Proactive environmental stewardship programs.
-- Water use and conservation.
"Farm Bureau understands that today's harsh economy demands tightening the reins on government spending, but we fear the reductions proposed for MDA come at too risky of a price for consumers," said Wood, noting that the national peanut recall that's under way reinforces the importance of food safety inspections and other agricultural programs in people's lives.
To add insult to injury, MDA's budget has been hacked repeatedly over the last several years to the point where the department accounts for less than 1 percent of the state's total general fund.
"To put this in perspective, MDA's total budget - and I emphasize total - is less than the overtime paid for Michigan's Corrections Department," said Wood. "It's astonishing how a department which impacts every single Michigan resident every single day can be given such low priority when it comes to state funding. With this approach the state truly is biting the hand which feeds it."
Farmers and non-farmers alike also lose out under a higher education recommendation to slice the budgets of Michigan State University (MSU) Extension and the Michigan Agricultural Experiment Station in half and merge the two service providers.
Research performed by the Agricultural Experiment Station and disseminated to farmers through Extension is essential to overcoming the challenge of how to feed a growing world population, said Wood.
"Food needs are never going to go away. They're only going to intensify," he said.
The budget activity could also jeopardize youth 4-H programs which are supported by MSU Extension. "4-H programs foster our state's future leaders. So any cutbacks here are a disinvestment in Michigan's children and the state's future," said Wood.
Farm Bureau is also concerned the budget cuts could stifle the economic momentum that's been building in Michigan's agriculture industry and end up costing the state desperately needed jobs.
Earlier this week Michigan State University and MDA released a study which reveals Michigan's agri-food industry represents almost 20 percent of the state's overall economic engine and employs a quarter of the state's work force. Updated job figures won't be available until 2010, but one of the study's authors says "signs point to job growth, putting Michigan jobs related to agri-food well over 1 million."
"At a time when Michigan's economy is struggling, we shouldn't be draining the MDA which supports one of the few industries in Michigan experiencing growth," said Wood.
