Douglas outlines plan to strengthen dairy industry

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(Host) Incoming governor Jim Douglas says he’s working with other New England governors in an effort to revive the Northeast Dairy Compact. Douglas says low dairy prices are one of the biggest threats to the future of dairy farmers in the state.

VPR’s Bob Kinzel reports:

(Kinzel) Governor-elect Jim Douglas told reporters at a Statehouse press conference on Thursday afternoon that his new administration will take several steps to strengthen the state’s dairy industry.

Douglas named long time dairy policy analyst Steve Kerr as his commissioner of agriculture. Kerr most recently has been serving as the state director for the USDA Farm Service Agency. Douglas says Kerr’s strong background in agriculture will help his administration deal with many of the critical farm issues facing the state.

The governor-elect also says he wants to improve the availability of capital to dairy farmers and he wants to expand marketing efforts using the Extension Service at the University of Vermont.

But the key to strengthening the state’s dairy industry according to Douglas, is the renewal of the Northeast Dairy Compact. The Compact, which expired last year, established a floor milk price for dairy farmers and this floor went into place whenever federal prices dropped below the cost of production:

(Douglas) “The president has made it very clear that he’s not a fan of the Northeast Dairy Compact or compacts of this kind. But I think there’s increasing support in the Congress. Twenty-five states have enacted legislation to provide for a compact and if my math is correct that ought to be half the votes in the Senate. Although for some reason it came up short last time. But I hope and believe that other states and regions of the country will realize the benefits of a compact-like structure.”

(Kinzel) Milk prices paid to dairy farmers this winter are about at the same level that they were 25 years ago, while production costs have increased dramatically. Douglas says this situation is the biggest threat facing the state’s dairy industry:

(Douglas) “The low price of milk, the lack of profitability in a dairy operation, that’s why I believe the Northeast Dairy Compact is a key strategy and has to be our major objective as we reform dairy policies in the years ahead. I think that’s the biggest problem. Farmers are receiving the same payment for their milk that they did decades ago while the retail price has risen dramatically. It’s just not profitable to operate a dairy farm now and we have to make sure that it is.”

(Kinzel) Douglas says he’ll ask the Legislature to elevate the status of the agriculture commissioner to the level of a cabinet secretary to highlight the importance of agriculture to the state economy.

For Vermont Public Radio, I’m Bob Kinzel in Montpelier.

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