Major Ag Cuts Advocated

This article originally appeared in the January 22, 2003 Michigan Information Research Service. Copyright 2003, Michigan Information Research Service. All rights reserved.

The Mackinac Center for Public Policy suggested eliminating the state's Agriculture Commission and selling off the state's two fairgrounds as a way to make up $94 million of the estimated $1.6 billion budget deficit the state faces in Fiscal Year 2004.

The $34 million in cuts Mackinac Center fiscal policy director Michael LaFAIVE suggested for the Department of Agriculture budget equals 35 percent of the department's appropriations for Fiscal Year 2003 and includes such measures as getting rid of the Office of Racing Commissioner.

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"Gov. (Jennifer) GRANHOLM should be congratulated for setting a budget-cutting tone for her new administration," LaFaive said. "The fiscal pressure exerted by the current $1.6 billion budget deficit gives lawmakers a chance to re-evaluate programs that are unnecessary, counterproductive, or which distort market mechanisms and incentives and would be better handled by the private sector."

In particular, LaFaive went after state-sponsored programs that could be handled by the industry, such as oversight for seed quality, a marketing strategy for chestnut crumble and free strawberries and asparagus currently given away at the New Buffalo Welcome Center.

The most politically charged suggestion was the elimination of the five-member Agriculture Commission and the release of 35 percent of the Agriculture Commissioner's staff. The Ag Commission's duties of setting policies can be handled by a governor-appointed Ag Commissioner, who would need 35 percent less executive staff since the department, in theory, would be 35 percent as large.

Another commission that can go is the Marketing and Bargaining Board, which monitors the negotiations of producers and the handlers of fruit and vegetables.

"There is no reason to believe that agriculture producers, wholesalers, and processors are any less able to conduct commerce than producers, wholesalers and users of other goods," wrote LaFaive, who estimated that the state would save $63,300 by the elimination of the Ag Commission and the Bargaining Board.

Sen. Cameron BROWN (R-Sturgis), the chairman of the Senate Appropriations Subcommittee on Agriculture, declined comment on the report until he reviewed it more thoroughly, but stated that as a Senator from an agriculture district, he is not in favor of a whole-scale gauging as the Mackinac Center proposed.

Brown met with Department of Agriculture budget officials for the first time Tuesday and emphasized that nothing has been decided as of yet.

"We want to treat that budget as respectably as we can," Brown said. "It will get a fair hearing."

Rep. Mike PUMFORD (R-Newaygo), chair of the House Appropriations Subcommittee on Agriculture, sounded a bit skeptical, but said he's not ruling anything out.

"I haven't had a chance to thoroughly look at these [suggestions], but any cuts that are going to hurt agriculture, I'll be opposed to," Pumford said. "I think it's ironic that someone has come up with $30 million in cuts to a $100 million budget. But, as far as I'm concerned everything is on the table. I'm willing to sit down and consider any suggestion."

After briefly reviewing the report, Keith CREAGH, Chief Deputy Director of the Department of Agriculture, said the Mackinac Center's analysis trims around $5 million from the state's actual General Fund. The rest of the money that is being cut is pass-through dollars the state manages with federal money.

So, while the scope of the Department of Agriculture could be greatly reduced, whether it should be reduced is more of a philosophical debate over the role of the state Department of Agriculture than a matter of trimming a $1.6 billion hole in the General Fund budget.

"Should the state be in this business or that business? That is a fair policy debate to have," Creagh said.

Other suggested budget cuts from the Agriculture budget included the sale of the state fairgrounds in Detroit and Escanaba as a one-time source of revenue. This type of action has been suggested before and the Mackinac Center is taking it one step further by suggesting the state get itself out of the fair operations business all together.

Due to the collapse of a lease arrangement between the state, fair officials and a private developer, the Agriculture Department will be stuck paying an estimated $900,000 more for fairgrounds maintenance in 2003. One suggestion offered by former Sen. Leon STILLE (R-Spring Lake) was to move the State Fair to Michigan State University. Selling this property could mean $57 million more for the state, LaFaive said.

"As with other forms of private entertainment, state fairs should sink or swim on their own merits," he wrote. "If there is demand for these summer festivals, the people who value them the most will be willing to fund and operate them without state influence."

LaFaive suggested the elimination of the Racing Commissioner and several millions of dollars that go to improving horse race tracks and boasting prize purses.

"The Michigan Bred program is sold as a way to improve Michigan horse racing by helping to subsidize Michigan 'winners,'" LaFaive wrote. "The truth is that it actually harms Michigan's racing industry by excluding superior racing bloodlines from outside Michigan borders. It is not illegal to breed a Michigan horse with one from Kentucky, but doing so will exclude the owners of champion race-horses from collecting larger purses."