State pledges millions to help dairy farms

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(Host) The Douglas Administration and legislative leaders have promised to spend more than $8.6 million to help the state’s dairy farms.

The cash payment is designed to rescue farms battered by low prices, high fuel costs and record rains that have ruined crops.

VPR’s John Dillon reports:

(Dillon) As general manager of the St. Albans dairy cooperative Leon Berthiaume has seen two decades of highs and lows in the milk business.

The current farm crisis, he says, is unprecedented.

(Berthiaume) “This is the worst economic situation that I have seen our dairy farmers experience. with the depressed milk prices that take us back in the 70s in terms of the level that they’re receiving for the milk they produce.”

(Dillon) Berthiaume was in Montpelier for a special dairy summit called by Governor Jim Douglas.

The meeting drew dozens of farmers — along with politicians and state officials — to a large hearing room in the Statehouse. It was standing room only, and Mitch Montagne, who farms in St. Albans town couldn’t squeeze inside.

Farming is a capital intensive business. And Montagne estimates that gross revenues on his farm have dropped about $500,000 from this year compared to last. The wet weather has just made things worse.

(Montagne) “I don’t have any corn planted. I planted 300 acres and we have to plant it all over again. I am done most of my haying. It’s rotten hay. It’s no good. We’re facing a mess.”

(Dillon) To help farmers out of the financial mess, Governor Douglas and legislative leaders quickly agreed on an $8.6 million cash payment. The money would amount to a $1.07 for every 100 pounds of milk. Prices have tumbled to less than $12 a hundredweight, and the state program is designed to boost that to $14.

Senate President Pro tem Peter Welch says it’s unusual to come up this much money when the Legislature is not in session. But he said the need goes far beyond the state’s 1,200 dairy farms.

(Welch) “We’re here today to acknowledge something very important, that the crisis facing Vermont farmers is not just a problem for Vermont farmers. It’s a problem for Vermonters. We are in this together. If we are to succeed in making progress, we have to work and act together.”

(Dillon) But the chief economist for the region’s largest dairy cooperative told the summit that $14 a hundredweight will merely bring prices up to what farmers were paid in the 1980s.

Bob Wellington is vice president for economics for the Agri-Mark co-op. He says the farm crisis is caused by record high milk production in the west and southwest.

(Wellington) “The problem that we’re having right now is not caused by Vermont dairy farmers. And in fact if the change in milk production that occurred on Vermont farms occurred nationally we would have $15-$16 milk right now. Instead, we’ve had huge increases in milk production in California, Idaho, New Mexico. And those prices are what have driven the national prices down.”

(Dillon) The farmers at the summit were grateful for the state payment. But some questioned why the program will not pay a premium on milk production above 4.5 million pounds a year. Many larger farms produce twice or even three times that much annually.

Mitch Montagne farms with his four children and the combined operation produces 15 million pounds. He says the cap hurts larger farms.

(Montagne) “I’m going to be penalized. I can’t cap my fertilizer. I can’t cap my labor. I can’t cap my fuel. I can’t cap my workmen’s comp. If they can find a way to cap all these things – my taxes – I’d be happy. But I really think they did a disservice to the larger farmer.”

(Dillon) The state will also spend an additional $300,000 on other farm programs, including one that help farms make the transition to organic production.

For Vermont Public Radio, I’m John Dillon in Montpelier.

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