Ag Still Not Michigan's 2nd Largest Industry

And why that myth is so damaging

President Obama came to Michigan recently to sign the $1 trillion farm bill and in a press release touting the bill, Sen. Debbie Stabenow called agriculture the state's "second-largest industry after manufacturing."

That is false.

A quick look at the data shows there is no possible way to justify calling agriculture Michigan's second-largest industry. Yet the claim has been repeated for years. This is especially distressing because Sen. Stabenow, D-Lansing, is the chair of the Senate Agriculture Committee and should know the size and scale of the industry.

The myth also is repeated by the Michigan Farm Bureau and the Ag Leaders For Michigan and other groups. The Michigan government also makes the claim, saying recently that agriculture is a "rock star" industry that employes "about 22 percent of Michigan's workforce."

The media echo chamber has helped spread this falsehood. An Associated Press article after the bill signing put that statement at the beginning of its article, which ran in newspapers across the country. (The national desk of the AP should have talked to Dave Eggert of MLive, who busted this fable two years ago.)

How did this statistic enter the conversation? My colleague James Hohman explains:

The source for the oft-repeated "second-largest industry" seems to come from an MSU report that uses a very loose definition of agriculture and multiplies the economic impacts from that loose definition.

For instance, cereal factories are included, as are food wholesalers and retailers like grocery stores and restaurants, regardless of their sales of Michigan grown produce. These jobs are then multiplied for their ancillary effects, meaning that you could be working as a car salesman and still be "induced" by agriculture, even though you directly work in automotive retail.

But even in the MSU study, the authors did not say agriculture is the second-largest industry. That was extrapolated by others.

This may seem like making a mountain out of a molehill, but misrepresentations like these are damaging. When politicians elevate certain industries of the economy in the minds of people, they are usually doing so to push favors for that segment.

Not surprisingly, while agriculture makes up about 1 percent of the national workforce, farmers get a disproportionate amount of subsidies that no one else receives. It also feeds the belief that bureaucrats and elected officials are "doing something" to help the economy, even if they are just shifting money from more productive areas to flashier ones (see: "State Loses 200,000 Jobs, MEDC Finds 2,185").

Agriculture is an important industry in Michigan, but there are lots of important areas of the economy. The government should not elevate it above the others, especially based on myths about its size.