Investing in Ag

By Jennifer Vincent - Michigan Farmer | October 2008

• Ag grants help reduce risk for new innovations and ventures.
• Agricultural Innovation Fund has provided a 7-to-1 return on investment.
• Program has generated $19 million in private investment and 72 new jobs.

In the stock market, if you have a 7-to-l rate of return, wouldn't that be a home run investment? "I he state of Michigan thinks so, but it has nothing to do with the stock market. Two years ago the state designated a small portion of the 21st Century Jobs Fund for agricultural grants. It has come back sevenfold in capital investment.

One success is the Agricultural innovation Fund. Also known as the Julian-Stille Value-Added Agricultural Development Fund, it's an aggressive effort designed to establish, retain, expand attract and develop value-added agricultural processing and related agricultura! production operations in Michigan. The competitive grant program was open to processors, agribusinesses, producers, local units of government and legislatively authorized commodity boards in Michigan that provided 10% in matching funds.

In 2006, a total of 225 grant proposals were reviewed by the Michigan Department of Agriculture. Forty proposals were funded, and as the two-year projects culminated this September, the report card is, to say the least, impressive according to Michael DiBernardo, MDA economic development specialist.

He reports that the program has generated $19 million in private investment by leveraging $2.7 million in public funds. "This program has allowed grant recipients to invest in areas they might not otherwise have been able to," DiBernardo says. "It fills a gap and lessens the risk, while promoting innovation, encouraging capital investment and creating jobs."

The final reports for the projects are still being filed, but DiBernardo says there's no doubt the program has been a success. "Seventy-two jobs have been created by this investment," he says.

New growth
Grants were funded for technical assistance, facility improvements, market research/development, business plan development, and facility/land purchase or construction.

"These agri-entrepreneurs demonstrate the state is ripe with possibilities for homegrown business success in the agricultural sector," adds Don Koivisto, MDA director. "Agribusiness expansion continues to be a bright spot in Michigan's economy, and there is tremendous growth opportunity to generate economic activity and market locally grown and made products."

A sample of projects funded by the grant program include the following:

• FROM WINE TO VODKA: Rick Moersch, owner of Round Barn Winery in Baroda, was awarded an Ag Innovation Grant to purchase and install a rectification column to increase processing capacity of "micro-distilled" vodka and brandy using existing fruit capacity in southwest Michigan. Moersch works with his sons, Matthew, vineyard manager and brewer, and Chris, marketing and general manager.
• Mite Zapper LLC of Detroit to develop and test a prototype device to treat Varroa mite infestations in honeybee hives
• Sietsema Farms Feeds in Allendale to build a biomass facility to generate renewable energy
• Cooperative Elevator Co. in Pigeon to add a specialty packaging line to process smaller packages of premium quality black and navy beans for the Central American retail market
• Geerlings Hillside Farms LLC in Overisel to build an anaerobic digester to process hog manure

To read more about the grant projects, visit wiuw.michigan.gov/mda and click on "Food and Agribusiness." For more information about the program, contact DiBernardo at 517-373-9144 or at dibemardom@michigan.gov

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