Sunday, January 24, 2016

Will the Upstate Revitalization Initiative Really Help Agricultural Growth?

From Empire Farm & Dairy magazine

By DEBRA J. GROOM

Late last year, the state announced three regions of the state would receive $500 million each during the next five years to help jumpstart their economies and create jobs.
 

Each of these regions — Central New York, Finger Lakes and Southern Tier — as well as those regions that did not win the competition (North Country, Mohawk Valley, Capital Region, Mid-Hudson) included agricultural components in their proposals.
 

So just what do the three winning regions want to do with their money in the field of agriculture? And which of these ideas does an agricultural economics professor at Cornell University think will provide the biggest bang for the buck?
 

Associate Professor Todd Schmit said he couldn’t talk about specifics in the plans, but looked at them overall and had some observations.
 

Schmit said what jumped out at him first was the regions’ proposals for food processing and beverages, areas that are adding jobs in New York state. He also liked proposals for “food hubs” and different ways to transport fresh products to other areas.
 

“What I took away from it is the key areas I see that will be fitting with the economic impacts in these regions and statewide economies,” Schmit said.
 

Schmit, who received his doctorate in 2003 at Cornell and teaches in the Dyson School of Applied Economics and Management, focuses his research and teaching on agribusiness development, agribusiness management, agricultural marketing and cooperatives.
 

He said his research has shown that at the state level, the strongest growth is in food manufacturing. In that area, there has been a 53-percent increase in output sales and a 16- percent increase in employment.
 

An example in the dairy industry is the explosion of yogurt manufacturing in the state. Although there is a “question on supply issues” in yogurt right now (an oversupply of yogurt) along with depressed milk prices, this still should be an area of growth.
 

(One yogurt plant, run by Muller in Batavia, recently closed due to poor production expectations). New York has been the top U.S. yogurt producer for several years because of the booming Greek yogurt sector. Other plants in the state are run by Chobani, Fage and Byrne.
 

Schmit also said the specialty beverage industry is booming.
 

“A good chunk of that is in the wineries and the growth in hard cider and craft brewers,” he said.
 

In 2008, there were about 240 wineries in New York state. Today, there are more than 400.
 

Fruit growers are not just selling fruit today. Many have expanded into fruit spirits (alcoholic beverages), such as Beak & Skiff’s 1911 distillery in LaFayette in Onondaga County, which uses apples to make gin, vodka and a number of hard-cider products. 

Apple Country Spirits in Williamson, Wayne County, also uses its apples and other fruits to make spirits and hard cider.
 

“All the investments in manufacturing will provide opportunities,” Schmit said. “There are strong multiplier effects with this manufacturing. I see that as encouraging.”
 

Schmit also was excited about infrastructure improvements, mostly to improve ways to transport New York grown and manufactured foods to areas that need it.
 

“We have to get foods to urban areas,” he said. “These types of investments are worthwhile.”
 

For example, one proposals in the Southern Tier plan lists the desire to develop and use new technology to transition the Southern Tier from a highly seasonal, occasional provider of food products to a reliable source of supply for the East Coast. 

The Central New York plan includes indoor agriculture, so vegetables and fruits can be provided to customers year-round instead of just in the summer and fall.
 

Lastly, Schmit said he likes the proposed investment for workforce development. He said workers should be trained for these food manufacturing and beverage jobs so when companies hire them, they stay and become invested in their workplace and what it is making.
 

“Right now, there isn’t a commitment or work ethic,” Schmit said. “With the right incentives, (which he said is more than just wages) people will have a commitment for what they do and are engaged with the organization.”
 

Here are the winning regions and what agricultural proposals are in their plans. Most of the wording is taken right from the plans:
 

SOUTHERN TIER
 

Transform the Food and Agriculture Industry
 

The Southern Tier will be a world-recognized leader in agriculture technology and serve as a key food supplier for the East Coast of the United States.
 

Leveraging the global reach and strengths of Cornell University’s College of Agriculture and Life Sciences, together with the region’s natural assets and strong private sector investment, a strategic mix of projects will transform and grow agriculture and food production, processing and distribution across the region, while also strengthening links to growing tourism and manufacturing industries.
 

** Develop and deploy new technology to transition the Southern Tier from a highly seasonal, occasional provider of food products to a reliable source of supply for the East Coast.
 

** Promote and leverage existing and new support structures for growers and producers in the region to help expand farms and increase their profitability.
 

** Increase the diversity of and access to food processing facilities around the region, including slaughterhouses, meat packing and poultry processing facilities, dairy processing facilities and aseptic packaging facilities for vegetables.
 

**Leverage our location at the crossroads of Upstate New York via the creation of a “food hub” network that facilitates market connections and distribution of food products for production centers in regions across the state.
 

** Pioneer workforce development programs designed to bolster food and agriculture industries.
 

The plan also states job creation for agriculture would be about 2,800, the average annual food and agriculture wage would go from $50,491 to $55,541 by the year 2020, the regional output of crops would increase 15 percent and the output in animal products would increase 5 percent.
 

Game-changing investments
 

** Plant Science Innovation and Business Development Center at Cornell University
 

** Southern Tier Agriculture and Food Development Cooperative
 

** Southern Tier Agriculture Development Fund, which will provide support to pioneering workforce development programs, with a focus on regional residents, hard-to-place workers and veterans
 

** Southern Tier Agriculture Education Fund
 

** Beef and Cattle Research Program
 

** Groundswell Farmer Incubator Capacity Improvement and Regional Expansion
 

** Basic infrastructure projects necessary to support expansion of food processing facilities such as the Waverly WWTF update to support the expansion of Leprino Cheese and the Village of Walton Biogas Project to support Kraft Food
 

** New construction or expansion of processing facilities for dairy, value-added foods, slaughter and meat packing, aseptic packaging and ultra-premium wine and beverages
 

** Investments in crop production such as the Vineyard Reclamation and Replacement Program
 

n Network of distribution hubs
 

FINGER LAKES
 

Further investment in the Finger Lakes region’s food ecosystem will help spur growth and create jobs. Examples of potential upcoming projects include:
 

AquaTerRen, a controlled environment agriculture start-up, is planning to build a hydroponic/recirculating aquaculture facility at Eastman Business Park in Rochester. The facility will produce fish, organic vegetables and organic fertilizer using renewable energy from anaerobic biodigestion.
 

This sustainable system would use shared utilities at the park and leverage state funding with a $250 million private investment, creating 400 jobs.
 

The New York State Agricultural Experiment Station in Geneva in Ontario County plans to add a high-pressure processing (HPP) safety testing machine at its facility. HPP is a rapidly expanding technology and the equipment would be the only Hiperbaric testing machine in the U.S. 
 

This collaboration between New York state, Cornell University, LiDestri Foods, Wegmans Food Markets and others will enhance the ability of the ag experiment station to serve as a hub for product safety testing in the U.S., and will attract food start-ups and entrepreneurs.
 

The Organic Grain Farming Conversion Initiative will help farmers convert to growing organic grain and position the Finger Lakes region as the organic food capital of the eastern U.S. and spur further investments by food manufacturers. Organic breads from heritage grains and organic meat using organic grain for feed will be produced from the grain grown in the Finger Lakes region.
 

A cross-region wine marketing strategy and campaign, expanding and coalescing existing efforts into a unified plan, will substantially increase tourism to the region.
 

North American Breweries has proposed an Eco-Brewery District that would create a destination for marketing and enhance the quality and perception of New York state beer. The project will expand the Genesee Brew House concept and create a brewery incubator, beer education center and a museum.
 

Working in collaboration with Monroe Community College, the district would also support workforce development for the beer industry. In addition, the district would be marketed as a tourist attraction that aligns with Greentopia’s EcoDistrict plans for the High Falls district. The project is situated in the low-income El Camino neighborhood and would contribute to its revitalization.
 

A Sustainable Food Production Initiative will strengthen and expand the food production industry through applied research around the development of new technology, tools, skill sets, innovations and information necessary to address the most critical industry-wide challenges, including energy, water usage, waste and overall resilience.
 

A focused effort on sustainable food production will require collaboration between food production companies, research institutions including the ag experiment station and the Technology Farm, community colleges and economic development organizations. 

The initiative will be led by Rochester Institute of Technology’s Golisano Institute for Sustainability and builds upon the existing Finger Lakes Food Production Cluster Initiative to further increase job and revenue growth in regional food cluster companies. 

Investments would focus on high-promise, applied research and development opportunities with the potential to drive innovation across large numbers of existing food production firms in the region.
 

CENTRAL NEW YORK
 

The ag initiatives in Central New York’s plan are titled New York-Grown, New York-Certified — Safe and Market-Ready. Region officials want to establish a strong consumer preference for Central New York agricultural products grown locally and certified as safe and nutritious to respond to growing domestic and international demands for nutrition and food safety.
 

They also want to build a powerful brand identity — within the region to around the globe — utilizing the region’s natural resources and innovative technology to strengthen the state’s dairy, fruit and vegetable industries and enhance the region’s overall rural economy. These efforts will result in increased food production and processing, rapid sales growth and job creation.
 

Central New York’s OpportunityAgriculture has been a cornerstone of the Central New York and Upstate economy for more than 200 years. It has maintained the vitality of the region’s rural communities, provided food for urban and metropolitan areas and offered tourism opportunities for visitors.
 

Within Central New York are more than 3,500 farms and over than 200 food processing companies employing nearly 4,000 people.
 

On a global scale, the food and beverage industry has witnessed significant growth over the past five years. This trend is expected to continue, reaching about $5.8 trillion in 2017 with a compounded annual growth rate of 5 percent in the next five years.
 

Many experts consider the challenge of feeding the world’s population as one of the most critical in the 21st century and estimate humans will need to produce more food in the next 40 years than has been produced in the previous 10,000 years put together.
 

With its natural resources, proximity to the world’s largest consumer markets, new investments in logistics and transportation assets, education and research base and supportive technology and industry sectors, agribusiness within Central New York is positioned to build off its historic strengths by investing in major agricultural growth opportunities through Controlled Environment Agriculture (indoor) and aseptic/extended shelf life products.
 

These opportunities are driven by compelling factors such as: 
 

** The rise of the global middle class and increasing demand for protein-rich, nutritious and safe U.S.-produced food. The lack of widespread refrigeration in emerging markets means that most of these food products have to be processed, packaged and delivered in a way that keeps them fresh and safe. This can be accomplished through aseptic packaging processes;
 

** New York state’s position as a national dairy center and a leading producer of fluid milk in the United States. Dairy is the largest category (54 percent) for aseptic beverages and is expected to increase by 7 to 9 percent compounded annual growth rate from 2010 to 2020;
 

** The persistent and ongoing drought in California is severely limiting outdoor production of leafy greens and creating new markets for indoor production in closer proximity to northeast U.S. CEA consumer markets; and
 

** The average greenhouse operation in New York has 26,000 square feet in a controlled environment, compared to the U.S. average of 48,000 square feet.
 

** The nexus between regional technology and industry strengths such as sensors, data analytics, unmanned systems and agriculture.


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