Michigan at Risk #1104: Farming on the Edge (produced 5/31/2000)

What. Michigan has a crisis. There's no doubt about it. We could do some things here. Help and that's what we're trying to do. I think the state of agriculture both nationally and in Michigan right now is in Turkey at a turning point in terms of having to make some very hard choices about the future. And in 10 years most of the farmers are going to be 67 70 years old wanting to retire and there's not too many young farmers. Younger younger than me even trying to trying to come in. And with the inheritance tax type of thing the family farm is going to be it's it's going to be tough.

Opinions vary but details need to be given on the state of agriculture in Michigan right now. The agriculture issue in the year 2000 is vital to our state. The key for us in Michigan is to understand that that agriculture is still a critical piece of our economy. Tonight we take an honest and hard look at where the state of Michigan is at in regards to Michigan's family farm. Some view the family farm and the family farmer as a piece of our state's heritage. But is there a bright future for farmers in Michigan. I confess I have an affection for family farm but I also think that some of the affection of their for them is really nostalgia for times past that just aren't going to be the case in the future. Michigan at risk Coast Chris Christie Awfully the discussion tonight as our panel of experts weighs in on an issue too often overlooked. It's critically important I think to to have this kind of show to help people

understand the size and importance of agriculture in Michigan. We welcome you tonight to Michigan it risks season finale farming out the edge next. Reporting live from our W.K. our studios in East Lansing here's your host of Michigan netlist Chris Christie. Good evening. In today's fast paced economy of dot.com stocks and corporate mergers it's easy to overlook an ancient economy that sustains us all farming. The people who produce all that we eat and drink. A close look at farming in Michigan shows a disturbing trend. The family farm that once was America's bedrock may be headed the way of the Model T as more farmers struggle and agribusinesses. So all of the markets some mourn the passing with nostalgia while others say it's the natural evolution of a technological world where bigger is better. Still it's difficult for farmers who are in financial straits to sell land that's been in their families for generations. Tonight on Michigan at rest we'll look at the economic environmental and emotional issues

raised by the loss of farm land in a few moments we'll see a report by a Michigan at risks producer journalist John Morales. And then we'll return to our studio and let you join in a live discussion with tonight's panel. Patti Cantrell of the land use Institute and Jack Laurie president of the Michigan farm bureau. Lisa Schwartz of the Michigan Association of Home Builders and Alan Garner a family farmer from Mason. And now John morale is featured report. Farming on the edge. When you ask a culture experts here in Michigan what the state of the industry is you will get varying opinions. But the strongest comment on this issue

belongs to Traverse City area state senator George McManus. Farmers aren't making any money. Number one that puts you in a crisis nourish specially if you get a loan at the bank. So McManus is the chairman of the Senate agriculture preservation task force. Last summer the task force held eight hearings across the state to gather information on one common theme. Low profitability of farming in Michigan. In fact in my area most of the farmers of the solar farm sold them because they had to to pay off the mortgage. In other words they ran out of money they couldn't pay the interest. And now that's maybe not true in some other parts of the state. But generally speaking farmers don't sell their property if because they want to they sell it because they have to and have to means you they're making a living to support their family or. The bank mortgages probably are a concern. Yes family farmers are faced with more challenges in Michigan these days but their success is critical to our state's present and future because of the small

margins we're seeing family farms have to get much much larger much more capital is required and so there's going to be very a lot fewer family farms in the future. And I think the key for us in Michigan is to understand that that agriculture is still a critical piece of our economy. According the Michigan agricultural analysts the industry brings in four point one billion dollars. Second behind manufacturing. But with the technological changes we've seen in the last decade we've probably seen more changes in agriculture in the last 10 years than maybe any time since the Industrial Revolution. Recently we spoke to two agricultural experts from Michigan State University. Both of them agree what the toughest issues are facing farmers in our state right now. Low prices were a little bit sort of on the downside. Just two or three years ago 95 96 we recorded some of the highest prices we've seen. We have a.

Reasonable. Year but there are just several forces I think coming to bear all of the same time. And it has. Is it really is creating a historical turning point in where we are in Michigan agriculture and in the kinds of difficult choices that are out there. Choices that you maybe make have to make as a state or as a producer. Maybe once in a lifetime the United States federal government passed the Freedom to Farm Act and 1996 in order to help revitalize the agricultural economy when we passed the 1996 farm bill. We changed federal farm policies in the U.S. and that's also had a have an impact on producers in Michigan. At one time there were strong there was a stronger safety net in terms of if prices fell. Farmers had some income payment protection that they would get from the federal government. The 96 farm bill removes some of that protection. It's not quite as strong as it used to be. And when we've had low prices the last two or three years without that protection from the federal farm programs that has been a major factor also in reducing farmers incomes the

last two or three years. The biggest debate going on right now is to find out if family farming can become profitable without government ain't we talk sometimes and about the huge payments that the government might say you know spent 15 billion or 20 billion. There is another side to that story. We have the cheapest food in the world. Part of that is because we're such an efficient. Producers but part of that is is these payments have a laptop more stable culture. If they don't see real stable but it could be even less stable and because it's in a more stable bank that leads to efficiency and leads to low prices. Here in Michigan state government decided to play a role in trying to help family farmers. Senate bill to all five sent a bill to all five the Michigan right to farm bill is signed into law and in place. And what it does is there are two key critical points. Number one it puts in place a uniform

approach to agriculture management practices that the rules and regulations that farmers need to meet and must abide by. And secondly it provides with surgical precision an ability if there is an AG operation a farm out there that does pose significant health and safety and public risk for the agriculture Commission to have a different sort of practices applied to that one operation so it's in place on the books and a good effort. State Senator shooty is a former State Department of Agriculture director and a former U.S. congressman. He feels the agriculture issue in Michigan is quite complex. Farming do is make no mistakes about it is a complicated business. It's it's one of you have to follow the markets. Across the country what's going on. Sure going out at the Chicago Mercantile Exchange. You need to make sure you're aware of currency fluctuations on a global basis just

because of how that impacts supply. Supply and demand the value of money. Interest rates crop insurance and then you throw in the whims of the weather. It's this is not something where you simply plan to see anybody can plant a seed. It's how you raise a crop. Let's now hear from the people who farm for a living day to day. Where do Michigan's family farmers see the state of agricultural right now. Is the industry in a crisis. It's in a crisis for a number of reasons. Number one Michigan is one of the only two states in the union. So I've been told Texas farmland the way that we do it's taxed on the net. Lorrimer A and what it does it is it's farmland is becoming taxed to the point where it's hard to hold onto it as farmland even if you wanted to.

Mr. Alston really touched on a very important and key point in the agriculture discussion here in Michigan taxes. Michigan family farmer Steve Lott says taxation and price issues provide problems for our state's family farmers. We could really use some help with the pricing issue. We could really use some help with different tax issues and things like that. Yes the president of the Michigan farm bureau offers some ideas on how the taxes Michigan family farmers endure can be changed. We can do some things with our tax structure. We can text agricultural land on its value for agricultural land rather than on its potential for development. We can address one of the faults with Proposal A and stop the pop up tax from having an adverse impact on families who want to transfer land from one generation to another. President Laurie talked about changing the way farm land is assessed and taxed in

Michigan. Lieutenant Governor Richard Posthumus says his administration is trying to make those possibilities a reality. There is an effort which I'm heading up today to put an amendment on the Constitution this fall which would allow us to tax land at its value as a you it its useful value rather than its developmental value so that would help us to maintain agricultural land in production much longer. Tonight you have also heard about the pop up tax for a definition an explanation of what it means for a tenant governor POSTHUMUS. One thing that the legislature is looking at today is to eliminate what's called the pop up tax. When we pass a proposal a in the early 1990s we reduced taxes on property in Michigan by probably about 40 percent. But in so we in each year when that land is reassessed it can only go up a maximum of the rate of inflation. It can't go up any

faster than the rate of inflation unless the land is transferred from one party to another if it's sold to another party then it can go back up to its taxing at 50 percent of its true cash value. This is called a pop up because it increases the property taxes significantly. As one would sell the farm from one generation to another. The president of the Midland based Mackinaw Center for Public Policy says these kinds of state issue taxes are not helpful to family farmers. Well Michigan has gone a long way to redress the problem from its perspective with our inheritance tax. The main problem now remains at the federal level. So Michigan legislators ought to be pressuring Congress to take a good hard look at the estate tax there are proposals in Washington to simply do away with it. It doesn't raise very much revenue but it sure hurts farmers. Most agriculture experts agree that legislation is going to have to be changed in order

for a Michigan family farmers to have a fair shot at not only profitability but survive all the family farms going to continue. We need to have some help with the legislation as far as getting the. So were all all the taxes all all the. Life work. My father doesn't go onto onto the government taxes. What does bother me is that we have policies in place that sometimes force the farmer to have to sell especially if it's the family after the head of household has passed on and they are they are faced with this punishing inheritance tax. There are a number of things that can be done politically by the governor in the legislature to create a better environment for agriculture. The current administration is doing their best to help family farmers here in Michigan. But realistically all the problems can't be solved in one quick swoop. I don't know that there's any one policy lever that John Engler or any other politician can pull that can solve all of the forces that are bearing

down on agriculture at once right. We have talked about ways to change legislation in Lansing in order to help Michigan's family farmers but now we have to talk about how the process works. In a word special interests special interest groups are parties who have a genuine interest in a certain issue or agenda. Of course their culture issue attracts a lot of interest for many reasons Michigan family farmer Alan Garner says special interest groups and legislators are essential to the process of change lobbying is very effective for agriculture as it is for any other business we certainly spend a lot of time at it is individual farmers I think probably. Generally speaking a farming community is more connected to their legislators and more involved in the political process and population in general.

One of the biggest players on the agriculture front is the state's Chamber of Commerce the chambers members are definitely affected by the state's second biggest industries success or failure as a statewide business organization we represent about 7000 employers throughout the state including a significant number of farmers and companies in agribusiness. Our belief at the Michigan Chamber is that this is a critically important segment of our economy. That's why we've been working with the Farm Bureau and state senator George McManus on a series of public policy initiatives to help preserve agriculture. Mr Studley is interested in the agriculture issue. It's pretty basic. I think the bottom line is that we all like to eat. So we need to have successful farmers here in Michigan to grow the wide range of tremendous agricultural products that we can and should produce here in our great state. One of the controversial debates going on is whether or not the environment is being neglected in regards to increased home building and other land development interests.

Michigan environmental council president Lana Pollack. Family farms are threatened on two counts they're threatened by the ever reaching development of homes into prime farmland and they're also threatened by the corporatization farming part believes that politics and financial clout are the real reasons behind some interest groups success or failure in getting their agendas addressed at the state capitol. In fact she names one special interest group specifically. Everything is political. I said in one Republican senators office only a few months ago and made some policy proposals and had a good honest discussion about the threats to the family farm and he said there isn't a senator in my caucus who wants to go up against the homebuilders. They're too powerful.

We spoke with the CEO of the Michigan Homebuilders Association to get his reaction to Pollack's claim. I've always admired Senator Lana Pollack. We have not always agreed on the issues but on this issue and I'm surprised and very happy that she said there's a black complement to our association. I don't think it's political. I don't think it's. And if it is it's strangely political. Yes we are involved in the political affairs of the state legislature local government and communities. Mr. Egbert has had to explain his view on homeownership in a unique way to get past the important issue of urban sprawl. Of course urban sprawl affects Michigan's family farmers in critical way. The question that you haven't asked is that home ownership is as important to society as farming and farm operations. Why. Because individuals who own a home put a stake in the

land and can take care of that. The other thing we're really facing in this state is urban sprawl and everyone wants their little piece of heaven out in the country and certainly I'm not against that. I don't know of many farmers who are against that. We just like to see a little bit better planning and some organization. In terms of how we do this development and try to be able to live together in an acceptable fashion. You can go out and you can farm or own houses. But the people who live in the houses like you to be there except when you're there they. Don't want you to be there on a Sunday morning or they don't want you to be there. Running your machinery next to their field at 6:30 at night when you're trying to listen to the new. But. They want to field to be there. At 4 o'clock on Sunday afternoon when they want to sit on your back porch and look out across it and watch the deer of deer grazing in a.

Well urban sprawl. Of course how you define it depends a lot on where you're coming from philosophically. To some it's a bad thing but to others it's the American dream. Another issue critical to Michigan's family farmers is their ability to have more access for their food products to import and export both nationally and globally. Bringing China into the WTO and the trade issue is a hot political button right now. The Michigan farm bureau president Laurie states his position clearly we are very pro-trade the Farm Bureau for years has had policy developed by its members at the grassroots level which very clearly says that without the opportunity to take part in in the world market I were simply saying to agriculture in this country one out of every three or one out of every four of you has to go into something else in the U.S. you have a very slow growing market for agricultural products.

The only real growth markets in the world is today are in the countries in Asia and in some of the Latin American countries. If you if U.S. agriculture does not have access to those markets there's almost no way that you can project any reasonable growth in the demand for U.S. agricultural products. If Michigan's agricultural issues you have learned about in tonight's program on successfully address a new problem will crop up no future family farmers in Michigan. What's more important is that there are only 4000 farmers in the state of Michigan under 35. In other words the young guys are going into it. I can't make any money now Art least can't make the kind of money you can make someplace else in 10 years most of the farmers are going to be 60 70 70 years old. I want to retire and there's not too many young farmers. Younger younger than me even trying to trying to come in and with the inheritance tax type of thing the family farm is going to be it's going to be

tough. Lot's nephew Jacob is a young Michigan dairy farmer who likes what he does every day. Jacob says his job is a bit different than the traditional nine to five employment. You can actually physically see your work in the field. We don't know. You'd see the corn growing. See the cows. Just the feeling that you're doing something. Besides. Pushing paper. Even though Jacob is young he knows Michigan's political culture is one he will have to master in order to keep farming for a living. I've got a lot of catching up with my dad. You know. Yeah on the bus. One man who has to worry about the state of agriculture in Michigan on a daily basis is State Department of Agricultural director Dan why and why it lays it out on the table of where Michigan is and where it is going.

In regards to family farming I think agriculture is in a state of extreme transition. And that transition means some and agriculture will be displaced. And that's a fact. It's not all gloom and doom for Michigan's family farmers in the future. Why it says overall the agricultural future is secure. In Michigan I want to reinforce the fact that Michigan Agriculture has a long term and vital future for many reasons. And we recognize we've got great diversity in the state second only to California what we grow. Second we have the unique weather soil conditions that will allow us to grow this diversity. Third we're right in the middle 20 percent of the world's freshwater resource and water is going to be fundamental this nation's future agricultural production. And then you throw on top of that again what I think is a strong premier Lang grant institution and a mechanism that puts resources on the farm with respect to technical assistance. I think Michigan Agriculture has a bright future in the state. Just wish to believe that that's really

only Michigan's family farms to some meanness knowledge and to others it's simply a way to make a living. AG experts agree that the future is bright in Michigan for family farmers. If all parties involved in the agricultural issue can get on the same page I would urge the governor to continue the broad focus on tax relief on efforts to prevent overregulation. I would urge him to continue to focus on Senator McManus s proposed amendment to the state constitution. We are not anti farming. The Michigan Association of Home Builders as a as one of its monikers is a wise use of land and that it parallels what the Farm Bureau and farmers want in Michigan also.

Farming has been a big part of Michigan for a long time. Depending how you define it it's our second biggest industry. So I see us farming in Michigan for a long time in the future. Well I think that we're going to have to see some political leadership if we're going to maintain Michigan's vibrant family farm. All issues that come before voters are political in one way or another I just happen to think that this issue is not a partisan issue it's not a Republican issue it's not a Democrat issue. If it gets to the point where all the farms are corporate farms there's going to be a part of the American heritage it's going to be gone it won't ever return. Well if we don't keep those farmers out there if we don't keep a viable agriculture we could lose it. There is nothing that says we have to far. There is no law that says you have to far and if you're not making money at it you knock on a farm. Welcome back. Now if you have questions about tonight's issue we invite you to call us

and join in a live discussion with our panel of guests. We also want to remind you that at the top of the hour we invite you to join our discussion in our post Michigan address Web chat on line at w w w dot WKRN dot o r g. Now let's meet tonight's panelists again. Patti Cantrell a policy expert for the land use Institute. Jack Laurie president of the Michigan farm bureau. And we have Lee Schwartz of the Michigan Association of Home Builders and Alan Garner a family farmer from Mason Michigan. Lee I will have to ask you we saw environmentalists a lot of Pollux say that the Home Builders Association wields inordinate power at least in some corridors of the Capitol and we heard your colleague Lynn Egbert say that well. That Homeownership is at least as important as farming and I'm sure there are probably some of you are saying wait a minute. Home ownership is a nice thing but you gotta eat first. Well I think anybody who looks at me knows that I like to eat as well so I don't think there is a basic in combat ability there.

I think that homes can exist alongside farms Allen said something a little bit earlier that I think we can all agree on. Well one of the keys here is proper planning and that's something that's been lacking in a lot of levels at a state level Weddle local level builders aren't afraid of good planning. They like the certainty of knowing where they're going to develop how they're going to develop. But at the same time they want to be able to develop and that's one of the keys here. That's been one of the problems that we've seen some times. The farm issue is used as a cover for or stopping development. So that's another reason why we're somewhat involved in this fight. Sam McManus said it right and we've said it all along and I think that my friends from Farm Bureau and Patty all agree with this. The best way to keep a farm on a farm is to make farming profitable. If a farmer can make a profit doing what they love to do they're not going to leave the land and the best way to do this is to address the

policies that we can on the state level to help make that farm profitable and Alan is that been profitable for you or is or has been a struggle. Well I think we all have to realize that agriculture as an industry is not exempt from the same business cycles that the rest of the other industries have to deal with. Right now we're seeing an economic downturn. We'll weather our way through that as we always have and better days will be ahead. Things are skinny. There is no doubt about it and there's a lot of people under some financial duress. But we can expect to be extremely profitable every year. No business it's no use. So you are in an economic downturn. I mean farmers because by all other accounts the economy's booming and there are you know places that can't find enough people even for menial work. And believe me that's a real frustration out in the agricultural community. And we see all of our good friends and neighbors doing very well there for one case and being able to purchase new homes and take those nice vacations. And we're saying what's wrong what's wrong

with our industry and why can't we get paid in a reasonable manner for the services we provide. You know farmers have had to sell their land get out of the business. Oh yes. For what reasons. Just as Senator McManus stated on the previous tape that if there is no money to go around you're eventually forced to sell your assets to take care of the debt load that you have. One of the questions I was wondering about is how much farmland we've been losing in the last decade or two. Patty Cantrell and Jack Laura you follow these issues pretty closely can you give us an idea what collectively we collectively came up with the number Chris. About 10 acres an hour we used to sort of give as an example of how rapidly it's being covered up. We've we lose we've lost about a million acres in the last what 15. 15 18 years I believe. Patty that's a significant portion of machines and culture.

And I think that relates to the lack of choices. That's development is a choice you know that to try and survive and there's a problem with a number of choices I think farmers have in the market and early in the show we saw. A description of how agriculture is going in that's one choice and I think as a community in the state and farmers we need to decide about some other choices we can help farmers have other sorts of markets. And I think about the amount of money that we taxpayers have spent on certain research and things that are going into large scale farming and large scale exporting and that is very much shifted to large scale money that farmers need to spend to get that big. And that seems to be the only option but I think there are other options being smaller farmers and smaller market OK we have a question from Joe from Grand Rapids Joe you're on the air.

Are you there. Oh OK. Who's this. And this is Boyd from where he's right. Detroit have a question. Yeah I need to know how you think her organic farmers are doing. Guidelines which guidelines state guidelines general guidelines got right in your view generally accepted management practices maybe. Chris let me take a shot at that. First of all that the the the poorest the poorest definition of a family farm that we can come up with is probably the only one that's out there because it's a it's a very subjective kind of of a description and you know we've heard and we've made numerous attempts to try and define what a family farm is is really difficult to do because a

family farm can obviously be an organic grower it can be a niche market vegetable grower it can be a livestock producer it can be anything that you see in Michigan agriculture he saw a lot of it earlier in the program this evening. If the caller's talking about the generally accepted. Management practices for agriculture that really set the stage for what's to be expected from Michigan's farmers. Those practices apply across the board. Certainly size hasn't got a thing to do with it they're just they're just as important to the small organic grower to the niche market or as they are to the larger producers OK we have now we have Joe from Grand Rapids Oh you're on the air and you're me. Yes the country. Yes it's a pretty big problem. Yeah I think that we you know maybe you know the issues that need to be looked down in order.

Hope we fix the future and the future in New Orleans especially here in Michigan. And your numbers are early on at that. It's a tough thing to understand. What can we do you and particularly you like. Well I think we've seen a number of solutions addressed and in the report we had Joe we talked about they talked about tax benefits what might have been left out that you folks often I mean there seems to be general consensus here that that more planning some consensus on profitability taxes and in this such can help family farms. Anything left out. Well Chris I think there is a consensus among this group we're all concerned about the viability of agriculture whether your concerns are most specifically with preserving farmland or with profitability or with planned development. The end result is to have a better agriculture.

The one thing that we have to remember and you know I think Lee said it very well in his earlier comments profitability has to be the key or agriculture will not and will not survive. Certainly that would apply not just to agriculture we're not unique in that manner. Profitability is important in any industry but the one thing we have to remember is that there is no there's no single issue there's no silver bullet. Agriculture is case that we can look to to solve all the problems. It's a lot of little things that we've all mentioned I believe that have to come together to address what the caller is is suggesting. Ok one. Point of view some might have is that while you talk about profitability I mean if I can make more money selling the land to a development whether it be at home or commercial then that's profit what's wrong with that.

Well we obviously don't think there's anything wrong with that. I don't think the farmer that selling that thinks there's anything wrong with that. But I think there's a critical difference. It's sort of interesting from the perspective of the home builder. Because we are painted quite often and as the dire enemies of the farmer and all we want to do is run him off the farm. I think I think Keith's article said we were farm land grabbers screaming for a tax cut out of the fact that only the government can actually grab land we pay for it. We don't want to see farmers forced off their land. So we've been in the forefront with the homebuilders and some of these economic issues. Yes there are differences between our friends in the farm or our friends in the environmental community and ourselves. But we're looking at less regulation Senate bill to a 5 the right to Farm Act we're looking at bringing in more ways to bring in more agricultural processing into the state. More breaks for farmers less regulations the things again to keep them profitable. As a

last resort if the farmer wants to sell that land if the family doesn't want to farm it we feel they ought to be able to sell it to who ever they want. We think we do things. Patty you might have a response to that I want to take a caller here we have Betty from Battle Creek better you're on the air. Yeah I think they're on the phone. The environment particularly of water quality and lamb quality with you whether they're owned by a so-called family or not what you have you got very few very cattle operation and the bill too well I think to really open the door without any environmental impact with any piece of it at all. Now I don't there's a real problem with that because the scale of farming it's not a family issue so much because some of the biggest farms in Michigan in the world are in this nation are family farms but this scale has

changed. And now in Michigan there are many places where people are living next to a very large farm that may have a three acre manure look and that's an issue. And the term factory comes out because it has changed so much. And that's something that with 2 0 5 I think the state has decided not to deal with buy. Taking the ability to work with farmers and neighbors together from local governments now it's something that the state does from the Agriculture Department. And those are problems for neighbors living next to that is also a problem for farmers who may have a problem with neighbors complaining about then. It's something that we can't do with just state rules. And as the caller said it can open a door if the state rules are very generic and low. Quick let me jump up on that. Yeah that's not quite correct in what Senate

Bill 5 the caller's referencing really does is is develop a set of standards and in the process in the formula that puts the standards into place all of the stakeholders are at the table. State governments at the table the former Department of Agriculture Michigan State University our land grant university that has the research extension expertise farmers are at the table. Local government is at the table and the citizens are at the table they all they all help develop the generally accepted agricultural management practices. You know we were we were sort of a step ahead of a lot of other states here in Michigan. We have four livestock operations here in Michigan a zero discharge standard. And you're as charged it means exactly that the that none of the

livestock waste can be discharged into the streams or just let run off the property it has to be it has to be managed. When the generally accepted management practices are accepted and the fish and the producer regardless of size size are going to do with it the producer. He lacks voluntarily to either follow those practices or not. He has to and that in that selection of what he's going to do he has to make a conscious decision and that is do I follow the practices which provide for clean water clean air being a good neighbor or do I disregard them and throw myself open to criticism and to the forces of the law. OK we have another caller here but if I could just. Sure I didn't for a moment. I don't think of myself as a large farmer but I suppose given the fact that I operate 3000 acres many people would make that assumption. The

positive thing about 2 0 5 not only for me but I think for the communities at large is the fact that as I have to travel in a 25 or 30 mile radius to put together that much real estate to farm I'm involved with a number of townships and it's becoming very increasingly difficult to know and to deal with various regulations were put forth by the local governments all well-meaning but really quite impossible for me to follow and now I think that we have some common state guidelines that are good across the board. It really enhances the opportunity for me to be responsible with with my neighbors and know what the law is. We have a caller again we have Steven from Ann Arbor Steven you're on the air. Oh yes. I'm originally from. Grant which Michigan you think quite a friendly community you know it's more a suburban community do a lot of home development but then I work in Detroit and I think that's just one example of a larger city here and the question for Mr. Schwartz Why is it that I

see a lot of undeveloped land in the City area but not but a lot of developing going on in their rural area. Why can't the developers develop urban areas and leave the farmland alone. Well Stephen you ask a good question let's talk even though in its potential issue urban redevelopment is tough. It's tough because if you look at the city of Detroit. Our members built the first subdivision there since the 50s. We've got 20 different projects going that are providing new subdivisions new condo projects loft conversions in the city Detroit. But what you've got to do is you've got to make people want to move back to the city. You can't force him to move back you've got to have something there to offer. And unfortunately that means I've got to feel safe. They've got to feel their kids are going to be well educated. They've got to feel that their taxes are commensurate with the services they get. They've got to feel the

streets are going to be plowed. And the city's got to make it available to developers work with developers to assemble land packages city Detroit has made some real strides in that they're going forth from our viewpoint as the foreign home builders. One of the things that we're doing we've got a single state construction code that's coming up. And the home builder support fourth for adoption in Michigan a code that was written by the Housing and Urban Development Department and the U.S. government. Designed to renovate all buildings. And it's based on a New Jersey code. We think that's going to help tremendously but it ultimately comes down to a choice of where you want to live. OK. That. I think I live according to that too. There are a lot of reasons that development happens outside of town and that has a lot to do with where we spend our tax money on new roads which open up areas also where we might build new schools. Some states are dealing with

sprawl by saying the state money that goes along with local money to build a new school we're not going to spend it outside in undeveloped areas. There's a lot of ways that are hidden that we actually open up undeveloped areas and if we can dry up some of that subsidy then we might see that the cost of developing in town you know is different people starting to try that most wars and roads are a good example. In fact I think the federal government did cut back on sewer expansions. Well that was good example but that that takes us into a whole topic rather than five years. OK we have another caller this is Frank from Roseville Frank you're on the air. Yes you're on the air. I'm sorry I wanted to address something that the first one from the home builders said it was worth bringing the home builders as friends of farmers and I was told that the homebuilders are opposing every proposal that comes down the pike to save farmland in Michigan.

So I want to know what he meant by portraying the home builders as his friends of the farming community. I don't know where you got your information but it's totally incorrect. Let's start with the current package that's up before we're supporting current use valuation of farmland. We've supported that for a number of years. We're supporting no pop up tax for farmland. We've supported that for a number of years. We've said that farmers who rent their farms to other farmers to get a credit on their income tax for that. We've said that on the federal level we have to eliminate the inheritance tax for farmers. We supported Senate bill two or five we've always supported the right to Farm Act. I think those are just some of the examples. Again we have some differences we supported the statewide PDR legislation that allows locals to go out and have elections and whether or not to fund a purchase or development rights programs to buy that land from agriculture. So I don't think you're correct in the assumption that we're opposing everything that comes down the pike. There

are some differences when I think they're clear. But I don't think we're enemies of farmers at all. I'd like to add something on that there's elements of the package now. The tax package before the legislature that would look at the fact that all the tax benefits that it would be going to agricultural land were trying to save farmland and we were investing a lot of money and use value alone is worth 84 million dollars a year. That's a big public investment. But that those benefits will be going to anyone who owns farmland. Many of them aren't farming and maybe don't plan to farm. And there's a potential for that to fuel speculation actually because if you're not paying very much taxes on your land you can end up developing at low cost. So we're supporting an effort to recapture some of those taxes that the public is giving away. And there's been a lot of opposition in the legislature to that idea. OK we have a little Christian to talk about there because I think that's an important issue and I would call it

just like that. A couple things on that. Everyone should know that the proposal with the Land Institute has it. Says that they want to see 20 percent of the purchase price of any farm recaptured. Her colleague who presented this to the House Committee said he thought it should go farther and maybe it should be 20 percent of the purchase price of every home. So you're going to have a home that's worth a hundred thousand dollars. You can pay $20000 in taxes you run that out against real estate transfers in the state you're looking at a tax of over a billion dollars. What's happened with this package. It has said very clearly in the debate today. That there will be no benefit conferred by current use that isn't recaptured for a period of seven years when that lands taken cultural usage. So there's no reason for a developer to go buy this and farm it. If they do under some sort of a subterfuge they have to pay that money back. OK benefit is larger than that because you have values a small portion of

what an owner of agricultural land would get in tax benefits. You talk to me you talk about the pop up earlier right. There would be no pop up that's a sizable amount of money. And there's the current owners of agricultural land are exempt from an 18 mill exemption for education and we analyzed a piece of property when you add all that up. It can be in this one example. Sixty some thousand dollars a year. And we want that to go to farmers. You know that's a benefit to farmers but. If that land is sold in any way that land is not being protected by these farmland protection tax benefits no farmer will pay that. Penalty you have whatever it ends up being because they have if they continue farming it doesn't apply. OK. We have a caller here Dan from Romulus. Dan you're on the air around here and from what you want.

Well I don't know. You know a lot of farmers that are already. How would you go about going up to people like you know like you know Ford buying a tractor. Well you know we're going to partnership that I buy only everything but a home for her. I want a farm that way. Also on the farmers. Are protesting on the home so the dollars are cry quite a bit. Seventy dollars not on their property. OK. Well Allan maybe you can answer is a 40 acre plot farming for a living or a hobby. Definitely farming for a hobby and there's nothing wrong with that. I think Michigan State and USDA both would indicate that for a family farm partnerships a father son father daughter combination you're going to be looking at something in a neighborhood of

700 to 800 acres to have a viable operation in today's economy. So obviously the number of small farms are growing for the very reason that the gentleman on the phone just stated there are farmers selling off 40s and 80s and this does provide an opportunity for folks to get their feet wet who would like to participate in production agriculture and particularly in each market. A lot of those although sold for hunting purposes though I think I know certainly in Northern Michigan a lot of those that's not just North Shore he said for all the plots are poorer and less driving. I you know I really got to put a plug in to Dan if he's interested in being a part of agriculture there are just a lot of opportunities today and where you can make an arrangement with with an existing farmer especially you heard about the farmers that are reaching retirement age. There are number of ways that you can develop some kind of a joint venture with these farmers to help them to work into their operation. You don't necessarily

have to move out and start from scratch and learn it all on your own. I want to and I don't I don't think that a 40 acre farm is a hobby you know it can be a potential money maker. The Ann Arbor farmer's market for example is preserving thirty two hundred acres of farmland with a whole bunch of little farmers that are coming and making good money at that market. And that's an industry that can grow in Michigan and I know it's just one segment of the options that should be available to farmers but did you know that in four years Illinois added 100 and. They went from 50 to a hundred fifty farmers markets 250 percent increase in Michigan we added. We had up to 13. You know we've gone up 23 percent. Other states that have cities and land around them have taken the opportunity to develop options for farmers and we can do that more in this Michigan.

Okay I think I think we have time for one quick question we have Kenny from Danville County quickly you're on the air. How are you going. Right good. Our work we're down I don't want them on record for I don't know if you're going to be like me when I'm. No no no what's your question can I have a question for the group for a question on what happened to this apparent farmland and recruitment. What's happening to it. Well what's happening to it is being sold off being developed. What's happening to it is it's being covered with concrete or having homes built on it is what's what's happening to it that's sort of the theme of this whole discussion here. How do we how do we plan properly for the future. You know as Lee said in the beginning how how do we use the expertise that we've got to plan effectively for the future. And here's where the areas were where we disagree. Some of the farm line numbers have been hazy. The AG report showed that one of the things they looked at is if you look at some of the numbers you can make a case that Michigan loses more farmland to force than it

does to urban sprawl or construction. The point is again going back to making sure that no farmer has to leave the farm unless that's what they truly want. And that's why this package of bills it's working its way through the legislature is so important not just for farmers but for everybody in the state of Michigan because we all gain from a healthy farm economy here. It's something that we all want to support. And there are other tools like purchase of development rights that's a term for buying the farmers right to develop so that they keep it farmland and they get the money that they might otherwise get. And I know the farm has been very supportive of that. In fact in year 2000 policy statements talked about funding PDR through a conversion fee based on sale value. When the land is sold and that's pretty much what the Michigan Land distanced his proposal we have to wrap it up sorry we're all out of time.

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