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Letter to the editor: Organic dairying could help preserve small dairy farms

Editor’s Note: Leicester resident James Maroney formerly owned one of the first organic dairy farms in Addison County and is a long-time critic of conventional dairy farming. In light of recent news concerning the decline of smaller dairy farms, we granted space for Maroney to expound on his view of the downturn and a possible solution.
The blue-green algae that will undoubtedly bloom again in Lake Champlain and Lake Carmi this summer and the auction sale last week of Clark Hinsdale’s “iconic” Charlotte dairy farm present Vermont with an unusually good opportunity to admit that its long and expensive support for the conventional dairy industry has failed.
It is not only failing, the experiment is also getting expensive: the Vermont Legislature has been taxing its people for 50 years to support programs it said were intended to “save agriculture” and “reduce lake pollution,” while its first intention all along was to curb development.
A little history will illuminate my point.
In 1961, when the Interstate Highway System was extended into Vermont, Gov. George Aiken said it would “spark the greatest development Vermont had ever seen.” But shortly came the realization that development was a threat to Vermont farms. Never mind that by 1961 Vermont farms were already compromised by the widespread adoption in the West and Midwest of conventional farming, which had destroyed their economy, the prevailing attitude in Montpelier was that Vermont did not want to “look like New Jersey.”
So in 1967, increasingly anxious about development, the Legislature enacted land use regulation, sold as a measure to help Vermont farms, which is why on its very first page, the Vermont Land Use Regulations exempt farming, its largest land use. Back then, 4,729 Vermont dairy farmers housed 204,000 cows, which produced as much manure as 6.5 million people.
The program didn’t save agriculture. In 2017, Vermont had fewer than 900 dairy farms—a loss of 80 percent—housing about 135,000 cows, or 66 percent as many as in 1967. These data were readily available to legislators, who took little notice of farm attrition; but they did notice that land use regulation was not protecting the lake. So…
In 1978, again saying it was acting to “save agriculture and protect the lake,” the Vermont Legislature enacted “Use Value Appraisal,” i.e., Current Use. Obviously, state subsidization for property taxes would be popular and today Current Use has 15,000 properties enrolled, covering 2 million acres, or a third of the state. Current Use, which costs Vermont taxpayers $55 million per year, or about $2 billion since its enactment 40 years ago, has had little effect upon the historical rate of farm attrition. That is, at the initiation of Current Use, Vermont had 3,382 dairy farms while today there are fewer than 900, an attrition of 73 percent. Nor did Current Use curb pollution into Vermont lakes, which, as we all know, is higher than ever. So…
In 1987, the Legislature created the Vermont Housing and Conservation Board, to “relieve pressure on our valuable agricultural lands” and to “maintain the essential characteristics of the Vermont countryside.”
Since its inception, VHCB has spent approximately $860 million from private and public sources to pay for the “conservation” of 390,740 acres of agricultural and recreational lands. The program has also not met its stated objectives: in 1987, Vermont dairy farms numbered 2,771, while today they number fewer than 900, an attrition of 70 percent. And lake pollution has empirically increased every year since then.
In Michigan v. EPA (2006) Supreme Court Justice Antonin Scalia wrote: “No regulation is appropriate if it does more harm than good.” Yet 30 years later the VHCB program is still in effect, so…
In 1996, the legislature promulgated the Accepted Agricultural Practices Rules(AAPs), which were intended to “reduce pollution attributable to agriculture.” But like all its predecessors enacted for the same purpose, the AAPs scrupulously ignored what conventional dairy was doing that pollutes the lake. Consequently the AAPs, including the much-ballyhooed winter spreading ban, did not “reduce pollution from agriculture,” not even one little bit.
The conventional dairy model is predicated upon the notion that farmers can freely import nutrients and other petroleum-based chemicals to replace the expensive and time consuming protocols for controlling weeds and replenishing soil fertility, and for 1950-60 adopters, it worked: farm yields quickly doubled and costs dropped by half. By the 1980s, even old timers who were initially disgusted by the idea of injecting toxins into the food supply were on board. Rising yields and lower costs were obviously appealing to individual farmers but the industry failed to address two concomitant side effects: over production and lake pollution were also rising, and these would go, until quite recently, unheeded.
Concerning itself only with rising lake pollution and ignoring the failing economics of the conventional dairy industry, in 2016, the Legislature enacted the Vermont Clean Water Law, intended on its face to reduce pollution attributable to storm water (40-44%), municipal wastewater (5%) and agriculture (40-44%).
Because in 2013 the Conservation Law Foundation had won a law suit against the EPA, the federal government had forced Vermont to clean up its water, and because agriculture’s contribution was the largest and supposedly the easiest to fix, the law now included a mandate to the Agency of Agriculture to replace the AAPs with the Required Agricultural Practices Rules (RAPs). The new rules would require farmers to fence animals out of waterways, to widen setbacks and to file nutrient management plans, which are all necessary but insufficient actions.
Insufficient because the RAPs imposed no limits on the application of the conventional model: no limits upon the importation and application of NPK (nitrogen, phosphorus and potassium) fertilizer, no limits on the importation of feed supplements and no limits on stocking rates. These business-as-usual conventional dairy practices go unmentioned in Act 64 because (i) they are the fundamental precepts of the conventional model and cannot be alienated from it (ii) the authors of the law were convinced that there is nothing wrong with the farming model; pollution, they averred, is caused by manure.
Old timers can remember a time 50 years ago when Vermont dairy farmers housed twice as many cows as they do today, a time when there was no winter spreading ban, no manure pits, almost no NPK and little lake pollution. None of the legislature’s actions since then to “save agriculture and protect the lake” have made any allowance for these salient facts. (See accompanying list of measures adopted to try to stem the problems.)
MORE RESOURCES NEEDED
Any industry that seeks to scale up must import additional resources. More milk, like more cars or more furniture, does not come out of thin air; it comes from adding resources.
Vermont conventional dairy is no different. Farmers operate as individuals, who all want to increase production; but they sell as a group. And since milk is fungible, i.e., a hundred weight of milk made in Vermont is identical to a hundred weight of milk made in Wisconsin, and when group milk production steadily overtakes demand, as it has since the 1970s, group prices fall.
And when group prices fall below the cost of production, many farms fail and are consolidated by Vermont’s 28 CAFOs, defined as housing upwards of 799 cows.
The Survey on the Future of Vermont found that an impressive 97 percent of respondents support farmers. But from society’s point of view, the dairy industry is also the cause of lake pollution, not to mention of the state’s increasing appetite for issuing laws and tax bills to address it.
Clark Hinsdale was President of Vermont Farm Bureau and a director of Yankee Farm Credit. He says he was among the first in the state to install robotic milkers, he balanced his cows’ ration with grain instead of forage, has most likely hired immigrants to do the hard labor, and his herd exceeded a third of the number of acres he managed where his cows’ feed was grown and their manure was spread. Hinsdale represented the standard of efficiency for how a conventional dairy farm should be run in Vermont.
Hinsdale said in a recent interview with the Addison Independent that his farm failed because of low milk prices, and that’s because the federal milk markets are awash in milk that cannot be sold above costs. That surplus is caused by the heedless adoption of technology to which he and the conventional dairy industry are in thrall. The failure of Hinsdale’s farm is Exhibit A in the case to reexamine the conventional model and Vermont’s support for it.
Hinsdale’s farm is only one of thousands of Vermont dairy farms that have failed over the past 50 years and few if anyone in Montpelier has expressed much concern about this. But it is perhaps now becoming apparent to legislators that the state of Vermont is complicit in their failure because the state has explicitly or implicitly supported what conventional farming was designed to do:
• As the number of farms in Vermont decreased, lake pollution increased.
• As the number of cows in Vermont decreased, lake pollution increased.
 • As the number of cows per farm in Vermont increased, lake pollution increased.
• As milk production per cow in Vermont increased, lake pollution increased.
• As total milk production in Vermont increased, lake pollution increased.
A TEACHING MOMENT?
The state has apparently learned nothing from the failure of its several programs to “save agriculture” and “protect the lake,” or from the failure over 50 years of the expenditure of $2 billion to achieve these results.  With ample evidence available from which to conclude that this ship had already struck an iceberg and was in imminent danger of sinking, the state looked at the blue-green algae in Lake Carmi and made plans to once again rearrange the deck chairs.
In February of this year, the Agency of Agriculture, in cooperation with the Agency of Natural Resources and the Department of Environmental Conservation, announced that they had drained a million gallons of phosphorus-laden water from a little pond that feeds into Lake Carmi. This was, they all said, an indication of their commitment to clean water.
Nota bene:these officials did not ban the application of artificial fertilizer to the lands in the Lake Carmi watershed, let alone in the state. They did not ban the stocking of farms with more than one cow for every three acres of land under management on which that cow’s feed is harvested and her manure is spread. They did not ban the importation of high-phosphorus protein supplements, which farmers feed to their cows in order to force them to produce more milk than Federal Milk Marketing Orders markets can possibly absorb. The agencies of Agriculture Food and Markets, Natural Resources and the Department of Environmental Conservation tried once again, to treat the symptoms of the problem but purposely did nothing to stop the problem at its source.
The staff of the Agency of Agriculture is fully captured by the industry the taxpayers pay them to regulate. They, and the staff of the Agency of Natural Resources and of the Department of Environmental Conservation should take stock of what the taxpayers pay them and their staffs to do. They have no justification for accepting a polluted lake because they have no justification for subordinating natural resource protection to conventional dairy.
Clark Hinsdale said in his interview that the family-sized conventional Vermont dairy farm cannot compete in today’s business environment without scaling up. He said that small family-sized dairy farming in Vermont has no future.
A POSSIBLE PANACEA?
But it isn’t small, family-style dairy farming that is in jeopardy; it is conventional family-scale dairy farming. The cure for both rising lake pollution and a failing dairy farm sector is to convert the entire Vermont dairy industry to organic.
Converting the entire Vermont dairy industry to organic would cut lake pollution in half within three years and turn 475 conventional Vermont farmers from insatiable tax dependents to profitable, taxpayers.
When I make this statement, I invariably hear that “if we did that, there would soon be a glut in the organic milk markets, prices would tumble and we’d be right back where we started.” But this ignores fundamental principles upon which organic certification is based.
For starters, the National Organic Program standards do not allow the importation or application of NPK fertilizer. Second, organic dairy cows must go outside for six or seven months of the year to rotational grazing plots, where they eat what their maker intended them to eat: grass. Since a cow cannot go much farther than a few hundred yards from the barn to eat before she starts to expend more energy in the day than she can ingest, an organic farm is limited to about 200 cows and about 600 arable acres. And third, organic cows are fed a ration based primarily upon high quality forage, with grain added only sparingly.
Vermont’s remaining 800 dairy farms today comprise about 125 mid to large farms, including 28 CAFOs, all of which greatly exceed these limits; about 475 small to midsize conventional farms, about half of which exceed these limits; and about 200 certified organic farms.
The 125 mid to large farms house approximately half of the total 135,000 cows now housed in the state. These farms cannot comply with the organic standards and must either downsize or close. Within the first few months of initiating the program, 70,000 cows would have to leave the watershed and with them, the grown and imported grain that feeds them and the manure they produce. In one fell swoop—and with nothing more than the stroke of the governor’s pen—Vermont has removed the three conventional practices that make roughly half the pollution in Lake Champlain.
The other objection I hear to my suggestion is that the organic markets are also in surplus right now and that there is no market for all the organic milk that Vermont would be producing.
Yes, the organic markets are presently in surplus. But this objection also fails to understand the precepts of the organic standards.
First, only a few of Vermont’s conventional farmers, categorized above, would elect to join the organic program right away. Some would wait a while and then maybe join, and the rest—perhaps half—would never or could not join. So those going out of Vermont dairying would far surpass those producing a new surplus of organic milk.
Second, ordinary milk comprises components each of which has a value in the marketplace. Everyone knows that Class I or fluid beverage milk returns the highest price. Regularly below the farmer’s cost of production we have Class II, Class III and IV. Butterfat, usually about 3.5% of production, is its own value category and like protein pays a modest premium.
There are no classes in organic milk. The farmer’s entire production returns the same price and that price is today, with premiums for butterfat and protein, around $45/cwt or 200 percent more than what the conventional farmer receives for the All Milk price. So if Vermont dairy were to reduce milk production by 50 percent and increase gross revenue by 200 percent, the industry is way ahead.
Third, unlike conventional dairy farmers, organic farmers are not allowed to expand production whenever it suits them; the organic coops control individual production in order to keep group production below demand. This provision means that the coops will not take on new farms unless and until demand surges above group production. That, in turn, means that the organic coops will only take on new Vermont producers as demand for their milk manifests in the market place; this means that even if Vermont were to declare tomorrow that it was converting its entire industry to organic, very few if any farmers would be permitted to ship milk into the pool.
Add to that obstacle, that to become certified takes three years of ‘cleansing,’ during which time the new organic farmer must feed organic feed and comply with all organic protocols but sell his or her production into the regular, conventional market.
Obviously, these limitations would be difficult for most farmers and for some, virtually impossible. Here is how we get around them.
NOFA Vermont is the certifying agent in the state. I have been in talks with them about creating a new class for new farmers that they would call “transitional.” Farmers who sign up to become certified must still go through the three-year ‘cleansing’ period. But as soon as they sign and as soon as they begin complying with the organic protocols, their milk would become eligible to be labeled ‘transitional.’
If they are selling this milk into the conventional market, they would receive the FMMO price plus the difference between it and the prevailing organic price, so they are making the equivalent of the organic price from the start.
Who would pay that difference?
Vermont has two large consumers for raw milk — Agrimark/Cabot and Ben & Jerry’s, both of whom buy only conventional milk. If the state of Vermont were to declare that it would henceforth no longer support the production of conventional milk, thereby disrupting these company’s supply chains, would either of them, both of which have for generations marketed themselves as Vermont based, go out of state to buy conventional milk rather than buy Vermont transitional milk? I don’t think so. And I think the legislature could think of a way to persuade the state’s large consumers of bottled milk and milk products — like UVM, Middlebury College, and Fletcher Allen Hospital — to join this program.
Attentive readers will ask if my plan, sketched out here in very broad outlines, is not painfully simplistic; would it not encounter difficulties? Well, of course it will. But readers might also notice that while the plan would be greatly facilitated by state support, it nonetheless requires none.
Is this not exactly what Governor Scott and Secretary of Natural Resources Julie Moore are asking for, and exactly what the legislature appears to be hoping will fall from the sky?
FIFTY YEARS OF FAILURE
These programs or laws have been enacted over the past 50 years to try to “save” the conventional dairy farm and to reduce lake pollution caused largely by dairy farms:
• Land Use Regulation (1967)
• Act 250 (1970)
• Vermont Land Trust (1977)
• Use Value Appraisal (Current Use) (1978)
• Vermont Housing & Conservation Board (1987)
• Act 200 (1989)
• Lake Champlain Special Designation Act (1990)
• Vermont Milk Commission (1991)
• Accepted Agricultural Practices Rules (1995)
• Act 115 10 V.S.A. § 6025(d)(5) (2004)
• Act 183 Sec. 1. 24 V.S.A. § 2790(d) (2006)
• Farm to Plate, Sec. 35 10 V.S.A. chapter 15A § 330 (2009)
• Act 142, VWLEIP, Sec. 1 6 V.S.A chapter 207 § 4603 (2010)
• Act 138 Water Quality Remediation & Implementation, (2012)
• H.586 Small Farm Certification Sec. 1 6 V.S.A. § 4858a Act 64
All these laws, to pay for which roughly $2 billion of the taxpayers’ money has gone up the flue, have empirically failed to achieve either a clean lake or a viable dairy industry. The failure is most conspicuous in Lake Carmi, which is covered with a thick carpet of blue-green algae from early spring to late autumn and which is surrounded by five or six of Vermont’s largest conventional dairy farms that by general agreement are the principal cause of the algae in the water.

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