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Sunday, 08 November 2015 21:53

Kent County study fuels strategy to bolster area agribusiness

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Through a new study, the Kent County Agribusiness Community Workgroup aimed to outline the contribution agribusiness has in the local economy, as well as help municipal governments and economic developers build their “toolbox” of strategies to support the sector. Through a new study, the Kent County Agribusiness Community Workgroup aimed to outline the contribution agribusiness has in the local economy, as well as help municipal governments and economic developers build their “toolbox” of strategies to support the sector.

GRAND RAPIDS — A group of local government officials and economic developers in Kent County wants to develop new strategies to grow the area’s agricultural and food-processing industry.

With the results of a new study conducted by the Kent County Agribusiness Community Workgroup, they’re now armed with the data to help inform that process.

The report, which is currently in draft form and is slated to be finalized in mid-November, marks the first comprehensive review of Kent County’s agribusiness industry, which comprises a significant portion of West Michigan’s $1.5 billion agricultural sector, said Jim Saalfeld, who chaired the workgroup and serves as the vice chair and finance committee chair for the Kent County Board of Commissioners.

“We wanted to do a comprehensive study that would take into context all of agribusiness in Kent County and see where county and local government can be useful in promoting agribusiness,” Saalfeld said.

Instead of focusing on a specific sector of agriculture, the new report instead took into account aspects of Kent County agribusiness ranging from fruit and dairy production to the supply chain and the food-processing industry. Kent County administrators, local economic developers and other community stakeholders participated in the workgroup.

While agribusiness has always been an integral part of the West Michigan economy, discussions about the industry at the county level in the past had been focused on the often contentious ordinance regarding purchase of development rights (PDR), according to sources. With PDR, property owners get paid to accept a deed that restricts non-agricultural development of their land, effectively preserving farmland from other development pressures.

“(PDRs) were the only lever that was getting pulled all the time, but there might be other levers that are more effective — and levers that cost less,” said Paul Isely, associate dean at the Grand Valley State University Seidman College of Business, who served on the workgroup. “Part of what we were doing here was looking at everything, trying to create a toolbox to help agribusiness as opposed to focusing on only one tool.”

Among the many recommendations outlined in the draft report, the community workgroup cited several steps to further grow agribusiness in the region, including enhancements to the state’s transportation system. Those recommendations included retaining high weight limits on state roadways all while improving highways, rail and other intermodal transportation options.

The report also noted that government officials and economic developers should better leverage West Michigan’s abundance of freshwater as a business attraction tool.

“It’s something we should be touting a little harder,” Isely said. “We don’t have water problems right now and we probably won’t have a lack (of water) for quite a long time.”


ECONOMIC IMPACT

Maintaining and growing agribusiness in Kent County is essential to support the state’s nearly $25 billion food-processing industry, sources said.

“Part of the reason why food processors are growing in West Michigan is absolutely in part because we have thousands of acres of farmland (here), which means that you’re not trucking products for hours,” said Rick Chapla, vice president of business development for The Right Place Inc. who also participated in the workgroup.

For example, West Michigan’s “fruit ridge” — two-thirds of which lies in Kent County — is responsible for a variety of valuable crops, according to the report. Nearly 60 percent of Michigan apples are grown in the fruit ridge area, accounting for an $800 million annual economic impact.

Overall, agribusiness in West Michigan accounts for approximately 26,000 jobs and generates $79 million in labor income, according to data from The Right Place.

Bolstering a robust group of agriculture-based businesses also mitigates risk associated with other primary industries in the area. That’s because agriculture runs on a different business cycle than manufacturing, said GVSU’s Isely.

“If you look at automotive and furniture, the cycle in agribusiness tends to be counter to that,” Isely said. “What economic effect it does have helps smooth out the business cycle and makes us more resilient to downturns in West Michigan, compared to other places that don’t have that agricultural base.”


TALENT DEVELOPMENT

The county workgroup study also pointed out talent constraints as one of the primary challenges that agribusiness in West Michigan faces in the years ahead.

While unemployment in the region has fallen and companies continue to add positions, “agribusiness is struggling to fill high-quality jobs,” according to the report.

“Quite frankly agribusiness is running into the same problems that all manufacturers are running into right now,” Isely said. “There’s competition for certain types of trades right now and whether you do those trades in manufacturing or agribusiness, you’re going to have constraints.”

In particular, Isely thinks part of the talent constraint for agribusiness stems from a perception issue. Today’s university students do not consider agriculture as a viable path of study and they avoid those programs in favor of other career tracks, he said.

“I’ve dealt with people that are begging for even traditional business students to consider agribusiness firms,” Isely said. “It’s outside the radar screen for the average university students. There’s a perception where you have to get dirty in the soil and you need that set of skills.”

Students in agricultural programs currently make up approximately 6 percent of Michigan State University’s total enrollment, according to the report. By contrast, education comprises roughly 13 percent of the MSU’s total enrollment.

Nationally, 65 percent of the 100 firms interviewed for an Agcareers.com survey stated they planned to have strong hiring demand for workers over the next two years.

To satisfy West Michigan companies’ need for workers, Isely suggested they look outside of the traditional talent pools at land-grant colleges and focus more on recruiting business students.

“If an agribusiness is used to going to a land-grant institution and looking just at their agricultural program, they may be overlooking a large number of students who would be able to do the job they’re hiring for with a little bit of in-house training,” Isely said.

Additionally, universities and community colleges should integrate more agriculture-based curriculum into their academic programming, Isely said.

Overall, Isely believes the new study will provide a blueprint for building Kent County’s agribusiness development strategy.

“The report wasn’t really about finding specific solutions but things that people could start thinking about,” Isely said. “I think there are action items that can happen, but this report is the starting point.”

Read 4804 times Last modified on Sunday, 22 November 2015 19:44

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