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Success on Tap?

Local farmers and brewers welcome legislation that favors New York beer

by Erin Pihlaja on July 26, 2012

Garth Ellms didn’t intend to return to the family farm. He went off to college and started working for a financial company before returning to the Ellms farm in Ballston Spa. His parents were open to the idea, but laid down some ground rules. “I had to create my own income,” Ellms said. He didn’t expect to find the solution to his problem in beer.

Times are changing: Garth Ellms brings beer to the family farm. Photo by Erin Pihlaja.

The Ellms farm fits into a newer category of farming called “agritainment” or “agritourism.” The Ellms clan, four generations of them, started out by growing Christmas trees and became a popular “choose and cut” operation. Later, they added attractions for the fall season: pumpkins, a hayride, and a corn maze. They are one of the lucky farms that have survived tough economic times. “We’ve seen other farms around us, like dairy farmers, struggling and going out of business,” Ellms said. “There’s not a lot of opportunity for fourth- and fifth-generation farmers.”

While his parents are still timid about adding beer to the family-friendly establishment, the younger Ellms saw an increase in revenue after he helped to organize the Saratoga Brewfest in 2010, which was held at the Ellms farm for the first two years. “It was a great way to get recognition for the farm,” he said. To go along with the theme of the event, Ellms planted a plot of humulus lupulus, a plant whose flower cluster is known as hops, which are crucial to the production of beer. He is toying with the idea of expanding. “We don’t brew beer, but who knows, down the line we might dabble,” he said.

Dabbling could more easily become a serious endeavor thanks to a new bill signed by Gov. Andrew Cuomo on July 18. Under the new farm brewery bill, breweries that produce 60 million gallons or less of beer annually are eligible for tax credits ranging from four-and-a-half cents to 14 cents per gallon. The bill also gives breweries back an excise tax exemption that for a time had been repealed, and exempts smaller breweries from paying a $150 brand label fee.

In addition to the tax breaks, the legislation creates a farm brewery license similar to the farm winery license created by New York state in the ’70s. This will allow farm brewers to sell wine, beer, and alcohol with a New York state label in their retail sites; to obtain licenses enabling them to open hospitality businesses, such as restaurants and bed and breakfasts, adjacent to their brewery; and to sell products related to the making of beer as well as holding tastings on their premises. The icing on the cake is that in order to obtain a farm brewery license, the beer produced must be made from ingredients mostly locally grown or produced within the state.

The signing of this bill has many expecting big things for New York’s economy. “Since the passing of the farm wineries license, New York state went from having a handful of wineries to around 300 wineries today,” said Julie Suarez, director of public policy at the New York Farm Bureau. Through retail sales and tourism, the grape and wine industry contributes billions of dollars a year to the economy of New York state.

“It’s outstanding for the industry,” said Gregg Stacy, vice president and director of marketing at Browns Brewing Co. in Troy. “It’s a jump start. The demand is there, but the supply side—it’s just not. Hopefully this will spark some interest.”

Browns grows three acres of its own hops and supplements the rest from local farmers to make its IPA Harvest beer. Stacy and the rest of the team would love to find more local hops growers. “We drive by an alfalfa or grass farm and we think, ‘Maybe they’ll switch over to hops,’ ” he said. “There are very few hops processing plants in New York state, and not many growers. There are even less barley growers.”

The tax breaks and exemptions in the bill will make a big difference to the Troy company. “It would have meant an additional $11,000 a year in excise tax and brand label registration fees for us,” said Stacy. “It was devastating, but it wouldn’t have put us out of business, but it would have hampered the growth of our new brewery in Hoosick Falls, and our ability to grow jobs and expand.”

“Before prohibition, New York state was actually one of the world’s largest producers of hops,” said Suarez. “This isn’t a foreign thing, we can go back to what we did many years ago. It would be great to see the state return to being a great hop producer.”