Editor’s note: This op-ed is by James Maroney.
I have read the F2P plan and I cannot accept that rising input costs are the root cause of the dairy farmers’ malaise or that the “primary challenge facing the dairy industry is the lack of price stability.” The root cause of the dairy farmers’ problem is government policy.
In 1972, Secretary of Agriculture Earl Butz removed agricultural production controls, in place since FDR, advising farmers to plant “fencerow to fencerow” and to “get big or get out.” Dairy farmers did so by eagerly adopting “advances in technology.” The consequent rise in production drove collective milk prices down. Forty years on, rising input costs and steadily falling per capita consumer demand decimated dairy industry profit margins. The farmers’ response was to expand, consolidate and adopt more technological “efficiencies” to further lower costs and boost production. The policy was a success. This political act, linked with the adoption of advances in dairy technology, is the root cause of the milk crisis. It is the reason why average production/cow rose 311% in sixty years and why Vermont’s 11,019 farms have dwindled to 1,007. It is why local efforts to “save Vermont agriculture” have failed.
The F2P Strategic Plan notes that organic dairy coops are able to manage supply in order to avoid over production and the plan suggests that F2P should do likewise. But the plan appears to ignore the primacy of the federal policy, the destructive power of technology that enabled it and what must be done parochially to counteract their combined effects.
Saving Vermont dairy farms, the kind that 97% of Vermonters have in mind when they tell the Survey on the Future of Vermont they support agriculture, has nothing to do with milk. It envisages a return to a time when the landscape was dotted with thousands of farms making a living by producing food for local consumption.
The Dairy Price Stabilization Act (DPSA), backed by Vermont’s congressional delegation, and the “Growth Management Plan” circulated by Dairy Farmers Working Together (DFWT) will not deliver a “Renaissance in Agriculture” to Vermonters. These two plans were not written to lower production. In fact, the secretary of agriculture explicitly reserves the right to cancel the program if supply falls by more than 2%.
Putting aside that no plan to shrink supply that in its very first word enshrines the concept of “growth” can possibly succeed, dairy farmers operate in two domains: milk and money, both fungible. The DPSA proposes to shift money from the few biggest farmers with the lowest cost of production, to the many smallest with the highest. Sounds good!
But saving Vermont dairy farms, the kind that 97% of Vermonters have in mind when they tell the Survey on the Future of Vermont they support agriculture, has nothing to do with milk. It envisages a return to a time when the landscape was dotted with thousands of farms making a living by producing food for local consumption. For this to occur, milk prices must rise, double or triple. For that to happen, production must be cut by 5% or 98 lbs. But DPSA does not remove capacity because the surplus keeps consumer prices down. There is nothing wrong with cheap milk in and of itself; so what then could be wrong with the DPSA?
As previously noted, conventional dairy has adopted “advances in dairy technology.” These technologies, like petroleum-based fertilizers and herbicides, antibiotics, artificial insemination and rBST certainly do work. But the DPSA and DFWT’s “Growth Management” plans are silent on the pernicious side effects of these technologies.
The conventional dairy business model is predicated upon crowding as many animals under one roof as access to land and capital will allow, feeding them high-protein concentrates and milking them 3 times daily to maximize production. This model achieves its miraculous effects by reducing the cost of soil fertility and weed control and externalizing them into the environment. That was their intent. Vermont has been trying since the 1960s to mitigate low prices, farm attrition and lake pollution without disturbing the protocol that causes the problem. In fact, Vermont is aggravating the problem. Virtually all state programs—including the “Accepted Agricultural Practices” and the “Best Management Practices”—outright cash dispersements, cost sharing for tools and manure digesters, UVM extension advice, tax abatements or exemptions, including Current Use and especially looking the other way while farms pollute the lake were written to help farmers maintain or boost production. The results are empirically counterproductive: farmers convert subsidization into new capacity for making more product, driving prices down. Government farm relief and subsidizations are in effect paying farmers to help them make their circumstances worse.
The DPSA and the DFWT “Growth Management” talk of supply management but both have a separate agenda: to preserve the conventional dairy model. The first because no politician—including ours—will write or support a bill that raises food prices to the detriment of 99% of constituents in order to help 1% of constituents (farmers); and the second because even revenue sharing will still preserve the larger farms’ right to grow by absorbing smaller less efficient farms. For these reasons, neither will achieve a “Renaissance in Vermont agriculture.”
In summary, the conventional dairy business model is predicated upon over production, low prices, farm attrition and lake pollution, which it achieves by externalizing its costs into the environment. The model cannot be applied without inviting these results. But they are too powerful to be parochially mitigated and too destructive to be endured. No solution to Vermont’s dairy farm problem is possible without contracting conventional milk production and nothing will stanch the flow of pollutants entering Lake Champlain that does not renounce the conventional large dairy farm paradigm. The two problems have a common origin and both yield to the same medicine. If the F2P plan either implicitly or explicitly supports conventional dairy, it supports its consequences.
Governor Shumlin is right: Vermont is within reach of 40M of the world’s most prosperous demographic and if our farmers give these consumers the special food they want, the future could indeed be bright. But Vermont cannot make food special by making it the same. Vermont agricultural products must—must—be differentiated. Then and only then can we expect consumers to pay extra for Vermont branded agricultural products.
