Milk Commission weighs strategies for helping farmers

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(Host) Lawmakers are urging the Vermont Milk Commission to help dairy farmers by forcing processors to pay more for the product. The goal is to then get that money back in farmers’ pockets.

But commission members say the strategy is risky, and could lead to expensive litigation.

The debate is playing out as Vermont farmers have seen their income cut almost in half over the past year.

VPR’s John Dillon reports:

(Dillon) Farmer Dave Montagne has a large operation in Franklin County. And Agriculture Secretary Roger Allbee had some basic questions when Montagne spoke to the milk commission.

(Allbee) "What are you getting now for your milk?"

(Montagne) "$11 something a hundredweight."

(Allbee) "What do you figure it costs to produce?"

(Montagne) "$18. Yeah, our size farm it will be minus a million bucks a year."

(Dillon) Montagne says he can hang on for a while, if he can still borrow money. But lenders are leery that he may not make enough to service the debt.

(Montagne) "Why can’t I borrow money? I don’t know. You look at cash flow, with everything that happened with the banks, they look at cash flow. $11 milk? It don’t cash flow."

(Dillon) The Milk Commission is looking for ways to help farmers like Montagne. The commission has the legal power to control prices on a state level. And last year it proposed a rule that would have set a higher retail price for milk, and have the money returned to farmers.

But the commission backed away from that plan after retailers and Governor Jim Douglas objected. That didn’t sit well with Democrats in the Legislature, who passed a bill requiring the commission to reconsider the proposal.

Franklin Senator Sara Kittell chairs the Senate Agriculture Committee. She told the commission that farmers can’t afford to wait for Congress to overhaul the milk pricing system.

(Kittell) "The states are going to have to lead the way as we have with a lot of issues. And Vermont can lead the way with this over-order premium mechanism."

(Dillon) But Agriculture Secretary Allbee – who also chairs the Milk Commission – told Kittell that the price regulation would not provide quick relief. Rapping the table in emphasis, Allbee Vermont would undoubtedly face a costly and lengthy legal challenge from milk processors.

(Allbee) "What’s needed is immediate. It’s immediate. It can’t wait. It has to happen immediately. And states don’t have the ability to do it immediately. I mean the attorney general’s office has given us an opinion on what we have now and it’s possible litigation. The litigation and courts is not immediate. It takes time. It’s dragged out. It’s costly. We need something immediately." 

(Dillon) Allbee and his counterparts in other Northeast states are pressing the Obama Administration to provide emergency help for farmers. He said the U-S Department of Agriculture is sympathetic, but the White House and the Office of Management and Budget are not.

(Allbee) "The issue is not USDA. The issue is not the secretary. The issue is not the deputy secretary. The issue is OMB."

(Dillon) Allbee is worried that Vermont will lose its working landscape of farms and forests if more dairy operations go out of business. That fear was underscored as St. Albans dairy farmer Dave Montagne talked about developers who would like to build on one of his farms.

(Montagne) "We got some big box stores looking at one farm. We sold one farm last winter. Other than that, I don’t really know which way to operate."

(Dillon) For VPR News, I’m John Dillon in Montpelier.

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