Letter to the editor: Ag sector needs bold leadership
I read with interest your recent editorial “Dairy: Finding common cause.” While I agree with your overall conclusion that the objective should be to find a common cause with a plan that allows our rural communities and our farmers to build a sustainable future, it will require BOLD leadership at ALL levels around a common cause going forward. That currently is lacking in our state, but is achievable I believe.
As you know, the trends have been there for some time. The export market for fluid milk to the New England market has shaped the Vermont dairy industry and the landscape in the state since the early 20th century. Unfortunately, a major reconfiguration of that market is taking place to include the decline in consumption of fluid milk, the historic mainstay for the Vermont dairy industry, and the increase in plant-based products. At the same time, Vermont dairy farmers and their cooperatives are tied to an outdated classified pricing system (created in 1937) as well as a model that depends upon strong international product demand for higher farm gate pricing (have to be lowest cost producers to survive in this regime).
Compared to major dairy-producing states, Vermont is a higher cost milk producing area. Vermont dairy farms will continue to struggle to survive in this highly volatile market environment. As you point out with statistics, many dairy farms have either ceased operations or merged into larger units as a result of the challenging pricing system. Ben Laine, a senior economist with CoBank, a major agricultural lender, states that “smaller dairy operators and cooperatives need to position themselves to take advantage of higher value opportunities as most of the U.S. milk supply is driven by these large, efficient farms that are much less responsive to near-term price changes.”
As you know, up until 1982, dairy pricing was driven by the Parity Pricing System that had been in place since 1949, or after World War II. That was ended in the 1982 Farm Bill due to a pricing system that was far too high and led to an enormous oversupply of dairy products in the late 1970s and early 1980s. In the past the Commodity Credit Corporation took the excess supply off the market by buying powder, cheese, and butter, but that has essentially ended with farm gate pricing driving the exit of dairy farms and consolidations today. The Dairy Cooperative leadership through their national organization, National Milk Producers Federation, has refused to endorse any supply management system, instead relying on the “survival of the fittest” economic model.
What you do not indicate is that Vermont has taken many actions over many years to try to help with the economics of agriculture at the state level. The Current Use Tax Program was put in place in 1979 to take the pressure of taxation off farm and forest land. Likewise in the mid-1980s the PDR or Purchase of Development Rights program was created to provide additional financial incentives.
An array of other programs have been established over time too, including an agricultural lending program at Vermont Economic Development Authority; conservation cost sharing; funding for cow power and methane digesters; farm viability; and working landscape funding. These programs in many cases have been of great assistance but have not in themselves stemmed the loss of dairy farms in the state. Various levels of federal assistance have existed as well.
It is encouraging that over the last year there have been efforts to address a common vision for the future. In March a group of 22 individuals who joined together around Vermont Dairy and Water Collaborative issued a Call to Action. The Call to Action reviewed all aspects of dairy as well as water quality issues, and found that immediate, incisive, effective, and enduring leadership and action are needed. The report made eight specific recommendations and in doing so stated that “a deliberate, comprehensive, systems approach that incorporates most or all of these elements is needed to ensure long-term success in improving water quality and increasing the viability of Vermont farms.”
Yes, the issues are complex, as they have been for many years, and it will take bold leadership at all levels to effect change. From past surveys, it is apparent that Vermonters value both a working landscape as well as water quality. They are not opposing objectives!
Roger Allbee is a former Vermont Secretary of Agriculture.
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