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Auditor reviews state dairy aid

This can force policymakers to revisit decisions that were made 10 or 20 years ago, and ask if they’re still really effective.
— State Auditor Doug Hoffer

MONTPELIER — In the past decade, Vermont has spent $285 million supporting the dairy industry and mitigating its environmental impacts.
Those findings are from a new report by the Vermont State Auditor’s Office, which dove into what it called the “complex web” of state and federal policies and programs that regulate the dairy industry.
“Can we determine, through analysis, if we’re achieving our goals? Because it’s costing us a lot of money,” said state Auditor Doug Hoffer. “This can force policymakers to revisit decisions that were made 10 or 20 years ago, and ask if they’re still really effective.”
Hoffer said he was inspired to examine the dairy industry after seeing the results of a 2019 report by his office, looking at the first $100 million spent on Lake Champlain cleanup efforts. He said dairy has been a big contributor to the lake’s problems, and he decided to look into the dairy industry in its own right — and see just how much it’s costing Vermont.
Agriculture accounts for roughly 2% of Vermont’s gross domestic product, according to the report, with milk sales making up about 65% of total agricultural sales. And dairy farmers need the state’s help. Because of various economic pressures and market conditions, Vermont went from 4,017 dairy farms in 1969 to fewer than 650 today.
In 2019, the most recent year for which data was available, Vermont’s spending to support the dairy industry totaled $35 million.
The biggest chunk of that was $13.4 million for tax credits, exemptions and exclusions. A close second was farmland conservation through the state’s current use program, with $13 million going toward state tax savings and grants to keep land in agricultural use.
Hoffer said he’s particularly interested in tax deductions because of how invisible they are. He said unlike proactive spending, the people who created these tax deductions might not know exactly what they do anymore, or how much money they’re costing.
“Once you decide not to tax food or clothing, or whatever it is, you don’t think about it anymore,” he said. “This is intended to pique the interest of policymakers, and say, is this still in our best interest?”
In 2019, $7.4 million went into grants and technical assistance to deal with detrimental environmental impacts of dairy farming. A smaller amount went toward grants and technical assistance ($983,000), and permit and fee reductions and exemptions (roughly $274,00).
But not everyone agrees with Hoffer that agriculture supports cost a lot of money.
“When you consider, at least in our view, how important dairy is and agriculture is in Vermont, and you think about how its annual economic activity is $2.2 billion, what we’re investing in dairy is not very much money,” said Steven Collier, general counsel for the Agency of Agriculture.
Beyond the economic impact, farming is a huge part of Vermont’s identity as a state, especially in rural areas, Collier said. He said it’s also important to remember that agriculture isn’t an optional industry, but rather a necessity for people’s “collective survival.”
“Our state would look significantly different if we were driving along streets seeing strip malls instead of seeing red barns and brown or black-and-white cows,” Collier said. “Tourism is one thing, but the quality of lifestyle and attraction to others is another.”
John Roberts, executive director of the Champlain Valley Farmer Coalition, said that, to him, the implication of the report is clear: A lot of money is being spent, and Hoffer wants to know if the state is getting value out of that investment. But Roberts said he doesn’t think the report sees the full picture of Vermont’s dairy industry.
“I think this is a useful and important report,’ I think it’s just not broad enough,” he said.
Roberts said agriculture is a multibillion-dollar economic driver in Vermont, and no matter how big the numbers in the report may sound, they’re actually a “small percent” of the total gain, especially when you consider that Vermont produces twice as much milk as every other New England state combined.
“It’s not just, a lot of money is spent on making the dairy industry or agriculture economically viable,” Roberts said. “It’s a combination of social policy, economic policy, all this stuff. It’s not just simple math; it’s calculus and quantum mechanics. It’s more complex than one plus one equals two.”
The report intentionally made no judgments about state spending, or recommendations for the future. Rather, its goal was just to give a clearer picture of exactly what Vermont’s current spending looks like.
“I didn’t feel at the outset that we wanted to go in being judgmental,” Hoffer said. “This was the first step in this area ever for my office. I thought, let’s just inform the discourse; we’re not here to make decisions about the cost-effectiveness or wisdom of these choices.”
Hoffer said he expects Gov. Phil Scott’s new commission on the future of agriculture will likely dig into those questions, using the contents of the report. And if it doesn’t, he said, his office might try to evaluate those things later down the road.
“We can always do another report,” he said.

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