What if more Michigan farms diversified into fresh and local markets to satisfy new and growing appetites for healthy, tasty, trustworthy food?

A 2006 study by the Michigan Land Use Institute and Michigan State University researchers investigated that scenario. The study found that if Michigan farms tripled the relatively low volumes of fruits and vegetables going to higher-value fresh markets in Michigan, the state’s net farm income could increase by 16 percent, or $164 million annually. As farms spent that new income at local restaurants, stores, doctor’s offices, and the like, they would stimulate nearly 1,900 new jobs.

Two studies by Iowa State University’s Leopold Center for Sustainable Agriculture also confirm the significant economic benefits flowing from more local spending on local foods. The benefits arise from stopping the exodus of local food dollars to other states and countries, and from the cumulative effect of re-circulating those dollars in the community—from food-buyer to store to farmer and store clerk, and back again to grocery checkout lane.

It all starts with investment in Michigan’s food and farm entrepreneurs, says David Armstrong, senior vice president of Greenstone Farm Credit Services, Michigan’s largest agricultural lender.

“I was probably a little skeptical a few years ago,” Mr. Armstrong said. “But now there’s very clearly demand in the marketplace by people who want locally grown food. I think it can be a rallying opportunity for entrepreneurs who want to take some business risk and come up with a plan to serve that emerging need.”

Similarly, Chris Peterson, director of MSU’s Product Center for Agriculture and Natural Resources, believes local and regional food is a valuable strategy for Michigan agriculture.

“Regional food systems have been a very important focus of the Product Center’s work for several years now,” he said. “We’re working on several projects where we’re looking at how we could make connections between local producers and local consumers of food.”