Traverse City Record-Eagle

Business

November 10, 2012

Ag Forum: Legislation for craft beer industry

By Rob Sirrine Special to the Record-Eagle

In both 2011 and 2012, citing economic benefits and benefits to Michigan's agricultural community, the Michigan legislature offered a resolution designating July as Craft Beer Month in Michigan.

It's a well-deserved designation. According to the Michigan Brewers Guild, Michigan ranks number five in the country in terms of number of breweries, microbreweries and brewpubs. And demand for Michigan beer is increasing, with great opportunity for growth.

The Michigan Beer Guide reports that the Michigan beer industry grew by an astonishing 26 percent in 2011. Yet, craft beer accounts for only 5 percent of total beer consumption in Michigan; only 3 percent of craft beer consumed is made in Michigan.

The benefits of Michigan's 100-plus breweries extend beyond the production of delicious beer. The Michigan Brewers Guild estimates that Michigan's brewing industry contributes more than $24 million in wages with total economic activity of more than $133 million. Michigan craft brewers purchase many Michigan-grown agricultural products like hops, wheat, beet sugar, cherries, apples and more.

How can Michigan's elected officials support and strengthen this growing industry? The Northeast may offer some clues.

This past summer with near-unanimous support from brewers, farmers and the New York State Farm Bureau, New York Gov. Andrew Cuomo signed legislation that strengthens and further develops his state's craft beer industry. The legislation "is designed to support New York's breweries and wineries, increase demand for locally grown farm products and expand industry-related economic development and tourism."

It accomplishes these goals by: Providing a tax credit of 14 cents per gallon for the first 500,000 gallons produced and 4.5 cents for the next 15 million gallons produced in New York; Exempting small breweries (less than 1,500 barrels) from paying the annual state liquor authority fee; Exempting farm wineries, distilleries and breweries from certain tax filing requirements; and importantly, creates a farm brewery license that allows craft brewers using New York-grown products to operate in a similar fashion to the state's wineries.

Developing a Farm Brewery License in particular could serve to benefit Michigan farmers and craft brewers. With steady growth in hops production in the state and region (estimated at 140 acres of hops in Grand Traverse and Leelanau counties by 2013) and a thriving agritourism sector, developing a farm brewery license would complement the state's wineries and cideries and offer another unique experience for tourists and locals alike.

In addition to the economic benefits of regional "farm brewery trails," legislation could be written to enhance the benefits to Michigan farmers as well. Mirroring New York's law, Michigan could take a phased approach: in order to receive a "Farm Brewery" License, by 2024, 90 percent of the hops and 90 percent of all other ingredients must be grown in Michigan.

As the "Great Beer State," it's time for Michigan to join the ranks of states like New York, Massachusetts and Maryland and enact legislation to support Michigan's farmers and growing craft beer industry.

Dr. Rob Sirrine is a Community Food Systems Educator with Michigan State University Extension's Greening Institute and provides statewide leadership for hops production.

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