Farm policy redux: Q&A with ag chief, Chuck Ross

Editor’s note: This story is by Sylvia Fagin, a Montpelier freelance writer.

The Agency of Agriculture’s new secretary, Chuck Ross is bringing a new focus to the economic role agriculture plays in the state’s economy.

Gov. Peter Shumlin has made the sale of value-added, locally produced food agriculture a high priority for his administration, and he has pushed to break down the “silos” between the Agency of Agriculture and the Agency of Commerce and Community Development. That’s why he named the secretaries for the two agencies at a joint press conference. In February, Shumlin brought Ross and Lawrence Miller, secretary of Commerce, together again for a press dog and pony show at Vermont Butter and Cheese when he introduced his Jobs Bill, which included a number of new agricultural initiatives.

Ross’ job is to be the chief cheerleader for the ag economy. Supporting farmers in their work is the agency’s highest priority.

The Agency of Agriculture is also responsible, however, for consumer protections like meat inspection and raw milk regulation. In addition, the agency is involved in water quality programs including pesticide and fertilizer run-off mitigation.

Ross comes to an agency that’s lost 20 percent of its employees in the past two years, even as agriculture has gained prominence as a potential economic driver in the state. He manages 82 full-time employees, a $14.8 million budget and high expectations set by Vermont’s agriculture community.

Ross seems prepared for the challenge. He’s spent the past 16 years as the state director for Sen. Patrick Leahy. Before that, he served for six years in the Legislature, representing Hinesburg and chairing the House Natural Resource and Energy Committee. His family still owns the Hinesburg farm he operated for 12 years. Ross maintained 800 acres and 65 Morgan horses, and produced 28,000 bales of hay annually. Now, his family leases land to five land-based businesses on the farm.

Besides a deep understanding of how to advance policy, Ross brings thoughtfulness and a willingness to say “I don’t know” to his new position. VTDigger.org sent freelance reporter Sylvia Fagin to interview with Ross about his plans for the Agency. What follows is a condensed transcript of their conversation last month.

Fagin: Let’s start with a dairy question. I’ve heard you talk about how some leadership on [dairy] pricing is going to need to come from dairy farmers themselves. What support is the agency going to provide to farmers as they’re talking about restructuring the price? Do you support supply management? (Supply or growth management creates a financial incentive for farmers to limit milk production.)

Ross: There are two basic conversations that are occurring. Foundations for the Future, which is a growth management plan (promoted by the National Milk Producers Federation), based on looking at the margins. (Farmers would buy an insurance policy that would level out the price.)

That’s an insurance/growth management margins plan. And then there’s a more conventional supply management conversation, known as the Costa-Sanders plan, in which farmers would be charged an access fee if they want to expand production. Those are the two major themes.

The important thing to recognize is that there’s two themes — there’s not 15, there’s not 10, there’s two, and there’s people in Vermont that understand and are involved in both. Foundations for the Future has probably got more momentum, but there are two conversations, and our agency is going to try to work within the community to see if we can narrow the breadth of views on it to be sharper. Because what is going to be important, if you’re going to move national policy, is that you have one proposal. We don’t (want to) have competing voices in Congress. That’s paralyzing for the legislative process.

Fagin: So you’ll be working with statewide groups, any specifically?

Ross: Statewide groups, Dairy Farmers Working Together, the co-ops, frankly, members of our congressional delegation as well.

One of the challenges here is that it’s difficult to write legislation if you don’t have support within the community beyond a couple of members of Congress. What enables a bill to move is to have support in other parts of the country (from) key legislators.

Vermont’s very different than many other states. Dairy is a huge component of our agricultural economy.

We pay really close attention to dairy in this state. (In) other states, it’s a much smaller percentage of the agricultural mix. So understandably, the focus of the congressional delegations in the other states, the ag secretaries in the other states, is not going to be as focused on dairy as it is in Vermont. So when they’re asked, “Do you support this dairy proposal?” They’re going to go, “What dairy proposal?” and they’ll look to their members in their agricultural community, and they’ll say “What do you think of this?” and the answer they get back is going to have a lot to do with whether they advance it or not.

I think it’s really about having a conversation with folks and working with them in a collaborative way to figure out what everybody can support, and sometimes that may be what they can live with, and other times it’s what they’re excited about supporting. Hopefully this will catch fire and have its own momentum and all of a sudden we’ll be racing to stay up with it instead of pushing to keep it moving.

Fagin: Do you think the 2012 Farm Bill will address milk pricing or a dairy supply management plan?

Ross: Milk pricing could emerge in the farm bill, but we need to have that conversation. It could be introduced as legislation well in advance of the farm bill. Clearly, that would be a wonderful vehicle, potentially, but we’ve got to get our ducks in a row and the timing on the farm bill is not certain and the timing on the conversation on national pricing isn’t certain. Whether the two will intersect in a way that will enable that to happen remains to be seen.

Fagin: So you would support some production management?

Ross: I will be supporting the merging of these conversations so we have a proposal to take to the Hill. We need a new dairy pricing (system) that knocks out the peaks and valleys and provides a reasonable income that’s related to the cost of production. Call that what you will. It’s called a fair return for a fair investment in a line of work, that isn’t fraught with the uncertainties that we have seen.

Fagin: A question about the proposed Dean Foods [milk pricing anti-trust] settlement. What are your thoughts in terms of the DFA [Dairy Farmers of America] and St. Alban’s Co-op’s objections to it? Do you tend to agree with their objections? Do you think the settlement is a good idea for Vermont dairy farmers?

Ross: I think the money in this case is not the issue; it’s a distraction from the conversation. The outcome of the case and its effect on the marketplace is what’s really going to matter.

We would anticipate a preliminary settlement sometime in the April-May timeframe, and when that preliminary settlement is offered up, we will be better informed and have a better idea what, if any, role we ought to play. We won’t sacrifice any of our legal foundation or footing between now and then, so we’re going to wait and pay close attention.

It’s an important case. It’s not clear yet whether a preliminary settlement would be advanced — there are a number of pieces that need to play out yet.

Fagin: The Agency is working with conventional farmers who want to convert to organic. Do you think it’s a better option for farmers to go organic?

Ross: It’s not what’s best for everybody; it’s what’s best for the individual farms. These are individual businesses with individual histories and individual unique financial circumstances, unique family circumstances (and) each one of them needs to be looked at independently. I’m not going to pass judgment as to one form is better than another; that one farmer ought to do this versus that.

I think the question is, what works for that farm and that family in that circumstance, and I’m hopeful that we can assist farmers in making choices that work for them. This is not a one-model-fits-all. The farmer needs to look at their situation and say, what’s best for me, how can I stay in business in a way that’s profitable and rewarding?

At the end of the day, if you’re not making any money, you can’t stay in business. Farmers are an incredibly dedicated lot, and they love what they do, but that only takes you so far. When you’re looking to pay your bills and put your kids through school, and provide the kind of health care or support for your family that you want and they need, you’ve got to look at it as a business: Is this going to enable me to get there? There’s a lot of different ways to be a farmer in this state.

Fagin: So the Agency isn’t specifically recommending or encouraging conventional farmers to convert to organic?

Ross: No. I would encourage farmers, if they’re interested and think they need to make a change, to look at an array of options and try to figure out what one is going to work for their family. Sometimes it means just simply adding cows, sometimes it may mean cutting cows and staying “conventional.”

Sometimes it may be a farmer, who’s no longer milking, but still owns the land and the buildings, figuring out that they might want to sell a chunk of land, put the money in the bank, and set up their family to do a whole different type of farming.

The options are almost infinite, but it’s all unique to the farm. I know there’s farmers in northern Vermont that are essentially crop farmers, they support the dairy farmers, and their farms might have been formerly, most likely, dairy farms. So the choices are choices the farmer needs to make and I just can’t emphasize this enough, we need to respect the fact that every farm and every farm family is unique. We need to help them make the best choice for their farm and their family.

Fagin: In your testimony to House and Senate [agriculture committees] you talked a lot about value-added agricultural products sold in out-of-state markets. Can you talk about that?

Ross: When you study economics, what you realize is that when you buy locally, money stays in circulation in the economy longer, and that’s good for everybody because it gets circulated around. So when I buy from you and you buy from your neighbor and your neighbor buys back from me, all of a sudden we’re supporting one another in a multiplier effect. Not only do we have the option of bringing new money in from out of state, we also have an ability to multiply the money we have in our state already by passing it through the agricultural food systems economy.

Fagin: The Vermont Foodbank reports that one out of seven Vermonters is food insecure. How will those folks afford to buy local food?

Ross: Well, one of the things this agency does is GAP [Good Agricultural Practices] audits. A GAP audit looks at a farm that may be producing fruits and vegetables and says you meet these agricultural practices, and the commercial chains like Shaw’s and Hannaford are looking for those audits. And when they see a farm passes that audit, the farmer can then move their products in that store.

And those stores sell to a lot of people, not just the neighborhood folks, not a specialty foods store with extremely high end products, it’s a panoply of regular food items which now, as a consequence of the GAP program, includes Vermont-grown foods. Some people worry that Vermont-grown foods will always be more expensive, well, actually, if you look closely, if you buy Vermont-grown foods when they’re in season, they may be less expensive, depending on the particular item and so on, but not necessarily more expensive.

That process is something we can do in the state of Vermont, within this agency, to help producers get into a bigger marketplace, and help people have access to that food at a price that maybe matches their needs.

Fagin: So when you talk about the GAP assistance, are you talking about the assistance that’s in the jobs bill?

Ross: There’s two things that are happening. One is the auditing that we do in the agency already, and then there is some money in the jobs bill that would be granted to farmers who need a piece of infrastructure to meet the requirements of the GAP audit.

Fagin: I’ve talked to some farmers who say GAP is a barrier to the marketplace, but sometimes their volume levels or the staff they’re able to hire to do the washing-cartoning-labeling-stickering is prohibitive. What sorts of assistance can the Agency offer farmers who want to sell to the chain grocery stores?

Ross: There’s another initiative that’s interesting and that is the (evolution of) food hubs that are aggregators and distributors.

Farm to Plate looks at figuring out how to support food hubs, and we have some funding that we have been looking at in support of food hubs through AIC [Agriculture Innovation Center]. And that’s another vehicle by which a farmer who may be good about producing a volume, who doesn’t have the staff or wherewithal to do everything, may be able to have it aggregated as a part of the food hub and then have it distributed out.

There can be some efficiencies that can be obtained in that kind of operation. Now, you know, honestly, the food hub, that is a whole emerging piece of infrastructure within the state, and what form it takes we don’t know yet. I don’t know that there’s a precise pattern, I don’t know that there’s a formula, my guess is that each food hub as (it) emerges will be somewhat unique as compared to the other ones, and reflect the foodshed, if you will, that (it’s) located in.

Fagin: So the ones you’re talking about that are in place already, you’re talking about Hardwick and the Intervale?

Ross: Hardwick, the Intervale, and I believe RAFFL [Rutland Area Food and Farm Link] down in Rutland.

Fagin: Now when you’re talking about food hubs, are these the same processing facilities that the governor was talking about last week, in his press conference at Vermont Butter and Cheese, or is this slightly different?

Ross: I think…the answer is maybe (laughs). They could be. I think the governor was really speaking about prospective investments, I think he made that in relationship to EB5, and EB5 is a significant program that raises significant capital. I think we need to see a whole new scale of food hubs emerge to be able to exercise the possibility of an EB5 capital investment. Now, there could be other forms of food processing that could be done that are much more capital-intensive, that an EB5 might be able to be appropriately aligned with.

Fagin: And EB5 is half a million (dollars)?

Ross: Yeah, depending on where you are. Most of the state of Vermont is half a million (dollars), but there are certain sections of Vermont where it’s $1 million. Chittenden county and I think part of Franklin county…I’d have to get the map out, but definitely Chittenden and part of Franklin are part of the $1 million zones.

Fagin: Are you anticipating that these processing facilities would all be EB5 funded, or would there be some incentive for other local currently existing private developers to build processing facilities now? Or is EB5 really the only funding stream you’re looking at for the processing facilities the governor was talking about, near the interstates?

Ross: Well, the other thing, you kind of have to back up a step. The government’s not going to be doing this. The private sector’s going to be doing this. So, the first…we can be encouraging the people and the food hubs are at a scale where there’s some not-for-profit support than can help push those forward.

When you’re talking about a significant food processing facility, that’s going to be either very entrepreneurial, not for profit, if it’s going to be a significant scale there’s going to be a private sector person, and then that will help shape what kinds of investment may or may not be necessary. We’ve learned how to do it well in certain applications, we still have things to learn about how to apply it to other sectors and agriculture is one of those sectors that we need to learn more.

Fagin: Ag’s a new sector for EB5?

Ross: Yes. Jay Peak has a lot of EB5 investment and they have a connection to a local farm for looking at the possibility of biomethane production. I would have to ask Bill Stenger whether there’s a direct EB5 investment there or whether it’s inferential, meaning he’s got a big investment on Jay Peak on the mountainside and as a consequence they’re going to have a commercial relationship with that farmer.

I don’t know…I’ve forgotten his business plan to know exactly how that’s going to work out.

Fagin: I’ve met a lot of enthusiastic young farmers who’ve gotten great training from on-farm internships, but who are locked out of farming because of land prices. Does the Agency have plans to make farmland more affordable?

Ross: Well, you’ve asked a money question so I’ll give you a money answer: the Agency of Agriculture does not have a lot of money. So, again, this is one of those things where the private sector and the not-for-profit sector need to play their role.

There are some interesting ways that you can have access to land, and it’s about a business relationship between the land owner and the farm entrepreneur, and that can take a lot of different forms. You know, there’s the Farm to Plate that’s coming out with a whole package of information about finance that can address this question, but the Agency of Agriculture is not going to have money that it’s going to put on the table to underwrite some of this stuff, but we can help coach some people, potentially, and then people need to go figure it out and engage in their own business relationships.

Fagin: I wonder about the Farm Bill that’s coming up, and the relationships that you have with the Federal delegation. What policies you hope to advance in the new Farm Bill?

Ross: We would certainly be in conversation with the delegation to look at opportunities that are relevant to Vermont. There’s a lot of programs already in the Farm Bill that bring money into the state of Vermont. We hope to continue to see those, clearly. There may be some initiatives that we could advance within the Farm Bill that would be particularly useful for the USDA and useful for Vermont. We will be working collaboratively with our delegation and members of the ag community in Vermont to figure out how to best take advantage of the Farm Bill to support the kinds of things we’re trying to do. And what I do think is exciting is that Vermont is leading the way in some areas, on initiatives that the USDA may be interested in.

Fagin: Like?

Ross: For example, we have the largest number of CSAs [Community Supported Agriculture] in the country, we have the largest number of biodigesters per capita in the country, and we might even have a shot at having the largest number in absolute terms.

We have a community food system that’s evolving in the state of Vermont that’s grounded in local economies, local producers and local buyers with ability to scale up, not only locally but with potential to reach out further. We have some globally competitive product lines in the state of Vermont that might be of interest to USDA.

Now, the Farm to School program, we’re the model for USDA. What is interesting is that there’s so much excitement and energy and initiative in agriculture in Vermont right now that I’m not even sure I can predict what we might be doing that’s so far ahead of the curve that the USDA would be interested in. But that’s the kind of dialogue I’m interested in having with the USDA, with our farming community, and with our delegation.