By Keith Whitcomb Jr.
RUTLAND HERALD
This year, Vermont will begin covering farmers’ premiums on a federal program designed to help them when the cost of producing milk exceeds the sale value.
That’s assuming Gov. Phil Scott signs the Budget Adjustment Act. Daniel Smith, co-chair of the Task Force to Revitalize the Vermont Dairy Industry, believes he will.
Smith said in the act is funding to cover the premiums Vermont farms pay when they enroll in the federal Dairy Margin Coverage Program.
The program was created by Congress through the Farm Bill, which has to be reauthorized every two years.
The task force Smith co-chairs with Sen. Robert Starr, a Democrat representing the Essex-Orleans district, met during summer and fall with people at all levels of Vermont’s dairy industry to formulate recommendations to help it. Covering the margin protection program’s premiums, like some other states do, was among them.
Smith said when it costs a farmer $20 to make 100 pounds of milk, and the milk only sells for $18 per 100 pounds, the farmer has a problem. This is what causes many farms, especially small ones, to go out of business. They can, however, sign up for the margin protection program and be paid some amount of money per 100 pounds of milk to offset the losses they took in selling it for less than what it cost to make. They pay premiums depending on how large their operation is and how much milk they want to protect.
The cost of feed is the largest variable when it comes to the cost of production, Smith said. Between that and the fluctuating price of milk, there is quite a bit of guesswork involved for farmers who can’t afford the losses. Last year, Smith said, farmers guessed pretty well. The average payout, according to Smith, was $59,000 per farm, for a total of approximately $27 million.
“So what we decided at the task force level was to take away the risk to farmers and just make the coverage available by picking up the premiums, since the premiums were being offered at a discount by the federal government, so it was a good deal,” he said.
On Wednesday, at noon, in the Cedar Creek Room at the Vermont State House, Smith, Starr, House Rep. Michael Marcotte, R-Newport; House Rep. John O’Brien, D-Tunbridge; and farmer Andy Birch, will hold an event to talk about the program and encourage farmers to enroll.
According to Starr, the dairy co-ops and most other groups who have regular contact with dairy farmers are putting the word out about the program as well. This is important, he said, as the message doesn’t always reach the people who need to hear it.
“It would be wonderful if we could get, say, 90% of them to sign up,” said Starr, who is also chair of the Senate Committee on Agriculture. “Some farmers don’t believe in any government programs so they may not sign up anyways.”
Last he heard, about a quarter of Vermont farms had expressed interest in using the program. He expects many will sign up closer to the deadline.
Vermont has been losing small dairy farms for decades. Starr said the pandemic has made that problem worse. The task force heard through its meetings that operations like cheese makers are selling their product as fast as they can produce it and would be able to expand given a greater supply of milk, something they won’t have if Vermont loses too many more farms. The hope for covering the margin protection program premiums is to slow the losses so other efforts can make progress.
keith.whitcomb @rutlandherald.com
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