Letter to the editor: Auditor’s report on dairy confirms industry flaws

The Vermont State Auditor’s report, which tells us that the cost to taxpayers for supporting the Vermont dairy industry during the period 2010-2019 has been very high but stops short of saying largely ineffective, has already stimulated the predictable responses from the industry’s apologists: that “agriculture isn’t an optional industry, but rather a necessity for people’s collective survival,” that “our state would look significantly different if we were seeing strip malls instead of red barns and black-and-white cows,” that “agriculture is a multibillion-dollar economic driver in Vermont,” and finally “beyond the economic impact, farming is a huge part of Vermont’s identity.” None of this is true; it is an industry in denial disseminating alternative facts.

The auditor posits that many of our agricultural policies were forged 10 or 20 years ago and maybe it is time to look at them to see if they are achieving their goals. But in actuality the state’s agricultural policies were forged 60 years ago and yes: it is long past time to reexamine not only their results but the intent of the goals themselves.

The state’s reasons for providing support to farming in the first place was not rooted in economics or our “collective survival.” It was a concern — an irrational fear really — that the Interstate was going to bring people to Vermont, and that developers were going to buy farmland on which to build housing projects. So, since we of course didn’t want Vermont to look like New Jersey, and under the flimsy pretext of helping farmers, the legislature launched a few land use and tax exemption programs that would supposedly help farmers stay in farming by lowering their operating costs. What could go wrong?

Rush Limbaugh was fond of saying “when the state subsidizes something we get more of it.” But as the report shows, what Vermont was unintentionally subsidizing was not farming, which it told us it wanted more of, but the production of more milk, which it should not. Farming is not the same as conservation. What went wrong is illustrated in the data: the number of dairy farms in Vermont since the 1960s has dropped from 6,000 to fewer than 600, a 90% attrition.

The report illustrates farm attrition correctly as a symptom of a problem, not its cause: the shift away from dairy farms milking 60-80 cows, which began in the years just after WWII, to farms milking upwards of 1,000 cows today. What the report leaves unexamined is the cause, which is that the conventional methodology drives overproduction and overproduction drives milk prices down, which drives farm attrition, which drives rural economic decay and the application of more of the substances that pollute the lake. This positive feedback loop has its roots in the legislature’s failure — a failure that continues today — to differentiate between what we now refer to as conventional farming, which was designed to overproduce demand and externalize its wastes into the environment, and what we now call organic farming, which was designed as the conventional model’s necessary antidote.

Rachel Carson, in her 1962 book Silent Spring, warned us of the threat chemical-intensive farming posed to our environment. The book ignited a furious controversy pitting the chemical industry against the nascent environmental movement. The economics of the new farming methodology seemed pretty simple: it would lower farm costs and boost farm yields. On the micro-economic scale what farmer could object? But the macro-economic consequences, that higher yields for individual farmers would depress all farmers’ incomes, were either poorly understood or not forcefully presented. Thinking only of how to slow development, Vermont took the side of the dairy industry, which of course wanted to adopt the new methodology.

Even allowing for good intentions it is important to point out that Vermont has never acknowledged its mistake and in fact continues to base its agricultural policies on that mistake. The data in support of this mistake are crystal clear: the average Vermont dairy farm spends +/- $20 to make a hundred pounds (cwt) of milk and sells that product for $16-17, a loss of $3-4/cwt. The agency insists that “dairy’s annual ‘economic activity’ is $2.2 billion.” But why are the farmers going out of business? Here’s the inconvenient answer: before the Vermont dairy industry can live up to the aphorisms extolling its importance that emanate regularly from the New England Dairy Board the industry will have to find a buyer willing to pay $25/cwt for 2.2B lbs of Vermont milk when the identical product is available elsewhere for $17.

These results are largely driven by three conventional dairy industry practices, none of which are even mentioned let alone regulated in Vermont’s so-called clean water law (Act 64), all of which are not only permitted in the authoritatively named Required Agricultural Practices rules but with state support very much in use today: (i) the importation and feeding of +/-600,000 tons of phosphorus and calcium rich feed supplements; (ii) the importation and application of +/-40,000 tons of artificial nitrogen and phosphorus rich fertilizer; and (iii) the housing of more than one cow for every three acres under farm management on which that cow’s feed is harvested and her manure is spread. Regulating these three practices would emulate organic farming in all but one aspect: that organic dairy farmers have a higher cost per unit of about $30/cwt but they sell that product for about $38-40/cwt. These are not complex facts; they are Economics 101.

The complexity enters the picture when we open our eyes to the fact that the conventional dairy industry deploys these practices with state support; the TMDL (2015), which tasked dairy with reducing its contribution to lake pollution by a whopping 66% but the industry has managed to reduce it by only 11%. This performance is not the farmers’ fault so much as it is the state’s failure to insist that the industry change its practices in order to meet this goal. It is the state’s failure to acknowledge that it has been with one hand supporting dairy’s constant push to expand and consolidate while with the other trying for appearances only to stanch dairy’s huge contribution to both water and atmospheric pollution, akin to trying to ride a horse in two directions at once. If the state wants to clean up the lake and the atmosphere AND help dairy become profitable it must abandon these policy contradictions. It must incentivize all its conventional dairy farmers to convert to organic by paying them to do so, and to deny all state support to those who don’t. Unless and until the state honestly examines the basis for its 60-year-old agricultural policies and determines that it is time to rethink it, and time for dairy to become ecologically and economically sustainable, nothing else will avail.

James H. Maroney, Jr.


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