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A closer look at milk hauling charges for farmers

By JOHN FLOWERS
MONTPELIER — The Vermont House and Senate have asked the Agency of Agriculture to study the impact of milk hauling and stop charges on Vermont dairy farmers, and determine whether those expenses could be reasonably shifted to manufacturers and/or consumers.
As it stands, farmers pay the costs for haulers to stop and collect their milk. They are also assessed a fee to have that milk hauled to processing facilities. The fees are deducted from the farmers’ milk checks.
For many farmers, these hauling and stop charges are not insignificant. Sen. Harold Giard, D-Bridport, a former dairy farmer, said he paid upward of $20,000 per year to have his milk hauled to processing facilities in Massachusetts. Giard said he has a cousin in Bridport who milks 90 cows and paid $21,000 in charges last year. He heard recently from a farmer in the Northeast Kingdom who milks 30 cows and pays $4,800 annually in charges.
Giard, who retired from farming late last year, explained that such expenses are even tougher for farmers to absorb these days, with soaring energy costs and plunging milk prices that are currently hovering around $12 per hundredweight.
In an effort to find relief for those still in dairying, Giard — a member of the Senate Agriculture Committee — sponsored S.226, a bill recently approved by the Legislature and that asks state officials to size up the hauling/stop charge burden on dairy farmers. Plans call for that information to be presented to federal agriculture authorities during the drafting of the 2007 Farm Bill.
“Agriculture needs to stand up and say, ‘We are not going to do this anymore,’” Giard said of the hauling and stop charge payments.
It may not be an easy problem to solve, cautioned Rep. Harvey Smith, R-New Haven.
Smith said farmers in all the New England states, along with Pennsylvania and New Jersey, are subject to a “federal order system” that sets the rules for the regional dairy industry. He said altering the system of hauling and stop charges would probably require a change in the federal order system. That means all member states would have to sign off on the proposed change, which would then have to be endorsed by United States Department of Agriculture officials.
“It’s not a simple process to go through,” said Smith, a former farmer and longtime member of the House Agriculture Committee.
Still, Smith believes it’s a process worth going through if it can improve the financial outlook for dairy farmers.
“I think it’s appropriate to look at anything and everything we can to decrease the costs of doing business in the dairy industry,” Smith said.
He pointed to estimates showing that the cost of milk would rise by 2 cents to 3 cents per gallon if stop and hauling charges were passed on to consumers. It’s an extra expense that many Vermont shoppers have said they are willing to absorb to keep dairy farmers solvent.
“If there is a way of passing that through, knowing the farmer would be the 100 percent beneficiary of it, we would support it,” Smith said.
Giard said he hopes dairy cooperatives, and farmers themselves, rally behind the call for hauling and stop charges to be handled differently.
“There is no reason for farmers to continue to eat this cost,” Giard said.
“What we are dealing with is tradition,” he added. “My goal is to change that culture.”

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