Legislation could strengthen Michigan craft brewers and farmers

Michigan is ranked one of nations best for breweries, microbreweries and brewpubs. To strengthen this important industry, Michigan should explore legislation that benefits both brewers and farmers in the state.

Mug of beerIn both 2011 and 2012, the Michigan Legislature offered a resolution designating July as Craft Beer Month in Michigan, citing both economic benefits and benefits to Michigan’s agricultural community.

It’s a well-deserved designation. According to the Michigan Brewers Guild, Michigan ranks fifth in the country in terms of its number of breweries, microbreweries, and brewpubs.

And demand for Michigan beer is increasing and exhibiting great opportunity for growth. The Michigan Beer Guide reports that the Michigan beer industry grew by 26 percent in 2011. Yet, craft beer accounts for only percent of total beer consumption in Michigan and only percent of craft beer consumed is made in Michigan.

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

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 New York State Farm Bureau, New York Gov. Andrew Cuomo signed legislation that strengthens and further develops New York 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: 

  1. 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.
  2. Exempting small breweries (less than 1500 barrels) from paying the annual state liquor authority fee.
  3. Exempting farm wineries, distilleries and breweries from certain tax filing requirements.
  4. Creating a farm brewery license that allows craft brewers that use New York State-grown products to operate in a similar fashion to the state’s wineries.
  5. Developing a farm brewery license in particular could serve to benefit Michigan farmers and craft brewers. Michigan State University Extension estimates there will be 140 acres of hops in Grand Traverse and Leelanau counties alone by 2013.

With steady growth in hops production across Michigan and a thriving agri-tourism 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. As an example, perhaps 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 other states like New York, Massachusetts and Maryland and enact legislation to support Michigan’s farmers and growing craft beer industry.