January 17, 2008
By CYRUS LEVESQUE
MONTPELIER — The Vermont Milk Commission issued a report this week that may come as a mixed bag to the state’s dairy industry. The commission supported a minimum producer price on all milk sold in Vermont and a stronger safety net for dairy farmers, but it also advised the Legislature to repeal the part of a 2007 law that shifted the cost of hauling milk from farmers to purchasers.
It remains to be seen how many of the recommendations will become reality. Some of the conclusions in the commission’s report, released Tuesday, were contingent on nearby states adopting similar plans, and Sen. Harold Giard, D-Bridport, said the Senate Committee on Agriculture would not support going back on the hauling charges legislation.
“How they can claim that that is in the best interest of the dairy farmer is beyond me,” he said.
Giard is a member of that committee and was a sponsor of Act 50, one part of which required milk cooperatives, handlers and processors to assume the cost of hauling milk from the farm. Giard said that there is no good reason for farmers who are already struggling to pay the hauling charges.
“This is just one more (expense) we were pushing off the backs of the farmers,” said Giard, a retired dairy farmer.
Stop and hauling charges, which are the fees dairy farmers pay to processors for trucking milk from farm to the processing plant, decrease the amount of money that reaches the farm by an estimated 60 cents per hundredweight (cwt). Typically farmers have been paid as little as $12 cwt or as much as $20 cwt.
If the Senate does ignore the Milk Commission’s recommendation, the Act 50 requirement for purchasers to take on the hauling charges would take effect in January 2009, or when two other Northeast states implement similar regulations, whichever comes first.
Rep. Will Stevens, I-Shoreham, on the House of Representatives’ Committee on Agriculture, agreed that the commission’s recommendation about hauling charges will probably not get through the legislature.
“My hunch is that this won’t have legs,” said Stevens, who runs a vegetable farm.
Stevens, however, was more skeptical than Giard about the importance of the hauling charges legislation. He said that several farmers have told him that they thought the legislation would make little difference in the long run; purchasers and cooperatives would find another way to keep that money. “They just felt they wouldn’t see that money one way or the other,” he said.
The Milk Commission’s recommendation on hauling charges was based mostly on testimony from Vermont cooperatives and milk processors, who argued that they could not afford to absorb the hauling and processing cost. They also said the move would put Vermont cooperatives and processors at a competitive disadvantage against out-of-state competitors.
Addison County’s members of the agriculture committees were more supportive of other issues in the Milk Commission’s report. Giard and Stevens both agreed with the intent of the minimum producer price and the over-order premium, a price higher than the minimum price imposed by the federal government.
Raw milk prices paid to farmers are set by federal “order” based on the region in which the farm is located, and the quality of the milk. Some states add a premium over that order for their farmers.
The commission’s report asked the Legislature to lower the cost of worker’s compensation insurance for farms and supported increasing milk production, despite the possible effect of lowering the price of milk, in hopes that a greater volume of milk would make more in-state processing plants viable.
The commission also supported a stronger safety net for dairy farmers. It announced it would research ways to raise funds to help farmers through lean years. Possibilities include a premium on all milk or voluntary contributions by Vermont businesses.
“You’re not going to have a dairy industry until you make sure there’s enough money out there on those farms to keep them profitable,” Giard said.
Stevens said that any efforts by the Vermont Legislature to help dairy farmers face an uphill battle, because there’s only so much the state government can do.
“Lots of hurdles need to be overcome and they seem insurmountable because of the national market,” Stevens said.
For example, the commission announced it would implement a minimum price for milk producers only if New York and Pennsylvania implement similar regulation. The over-order premium the commission announced would be put into effect if New York implements a similar regulation; Pennsylvania already has one.
Even if the over-order premium is put into effect, the over-order premium the commission supports would only apply to the price for fluid milk produced, processed and sold in Vermont. “What effect that has on farmers in Vermont remains to be seen,” Stevens said.