Fate of Vermont agriculture in Washington weighs heavy

Peter Welch

Rep. Peter Welch, D-Vt., talks about his Washington work on agriculture with farmers in Middlebury last week. Photo by Jasper Craven/VTDigger

MIDDLEBURY — In a conference room with a calendar of antique tractors on the wall, U.S. Rep. Peter Welch spoke with agriculture leaders Thursday in what was billed as a roundtable focused on the next sweeping five-year federal farm bill.

And while dairy protection programs and phosphorus management were on the menu, farmers made clear to the Vermont Democrat that battling President Donald Trump’s tough immigration policies should be priority No. 1. Hundreds if not thousands of immigrant workers labor on Vermont farms, many of them in the U.S. without permission.

Snacking on cheese pizza and tall glasses of local milk, Champlain Valley dairy farmers vented to Welch about the uncertainty of Trump’s policies, contending that immigrant workers were some of the most dedicated employees they’ve ever had.

Loren Wood said the four migrants who labor on his Woodnotch Farm in Shoreham are “vitally important to our business.”

“Some of these guys have become almost members of the family,” Wood told Welch. “If we are having a cookout, they are with us.”

Phil Livingston of Rail View Dairy chimed in with agreement, saying his New Haven farm has benefited enormously from their dedicated labor.

“They know as much about managing dairy cows as some of us do, because they have invested so much of their time and energy,” Livingston said. “They are pretty smart individuals, and they are as proud of putting up high-quality milk as we are.”

Brian Kemp, a beef farmer who runs the Champlain Valley Farmer Coalition, urged Welch to tell Washington politicians that immigrants aren’t taking jobs away from citizens.

“They are here because there is a void,” Kemp said. “American workers do not want to milk cows.”

Wood shook his head in agreement, saying he offers competitive wages to local workers, but Vermonters often can’t keep up with the strenuous schedule.

“When we started milking three times a day we hired two local boys — white guys,” Wood said. “One lasted a week, the other quit before he started.”

Rep. Peter Welch, D-Vt. File photo by John Herrick/VTDigger

Welch listened intently to the farmers’ concerns while his top dairy aide in Washington, Mark Fowler, took detailed notes.

“What you’re telling me is that getting the immigration issues resolved is at the top of your list, even more so than the dairy Margin Protection Plan,” Welch said, referring to a much-maligned insurance program inserted into the last farm bill.

The farmers nodded in agreement. Then Eugene Audet, of Blue Spruce Farm in Bridport, told Welch to quickly start looking for congressional allies for a comprehensive immigration bill that would offer a pathway to citizenship.

“(Sens.) Bernie Sanders and (Patrick) Leahy, they are helpful, but you all represent a small geographic area,” Audet said. “We need to get more help from the rest of the country. So can you come up with 10 names?”

Welch couldn’t list potential allies for an immigration bill, and for good reason. One of Trump’s key campaign promises was to deport millions of unauthorized immigrants, and in a speech during the campaign he denigrated Mexicans as rapists and criminals.

There has been congressional action on immigration in recent years, including in 2013 when Leahy, D-Vt., helped craft a bipartisan reform bill that passed the Senate. The bill, however, died in the House. Attorney General Jeff Sessions, who holds enormous sway over immigration policy, vigorously opposed the 2013 bill when he was an Alabama senator.

“We in Washington are making it so hard for you,” Welch acknowledged. “It’s a challenge to simply have labor who can do the job and feel safe going into town to pick up some groceries or go to a movie. That’s pretty bad.”

Sonny Perdue

U.S. Sen Patrick Leahy, D-Vt., left, and Sonny Perdue, the USDA secretary nominee, shortly before Perdue’s confirmation hearing March 23. Photo courtesy of Leahy’s office

Funding in question

Many Vermont farmers feel existentially threatened under Trump, and not only because of his immigration policies. The president has recommended a 21 percent decrease in the budget of the U.S. Department of Agriculture for fiscal year 2018 — totaling $4.7 billion in savings.

In Vermont, such cuts would take away crucial technical and grant assistance to farmers already burdened by debt who face a shaky agricultural market.

In March, during the confirmation hearing for Trump’s USDA secretary, Sonny Perdue, Leahy defended federal programs as crucial for keeping Vermont farmers afloat.

“We know how important the Department of Agriculture is in supporting our nation’s farmers, our rural communities, our hungry and malnourished families here and abroad,” said Leahy, a former chairman of the Agriculture Committee who is now the panel’s most senior member.

An affable former Georgia governor, Perdue wore a powder blue tie dotted with rusty tractors during his confirmation hearing. And while Trump is looking to slash assistance for farmers, Perdue promised the panel he would be an advocate for those who work the land.

“Agriculture is in my heart,” he said. “And I look forward to fighting for the producers of America.”

Perdue’s nomination breezed out of the Senate Agriculture, Nutrition and Forestry Committee in late March on a voice vote. According to Leahy’s spokesman, David Carle, the Vermont senator hasn’t made a decision on whether to vote for Perdue on the Senate floor, but he didn’t object to the nomination during the committee vote.

In addition to Perdue, there are roughly two dozen other USDA posts that still require Senate confirmation. The slow pace of the White House’s nomination process has frustrated Senate aides who say there are gaping holes in agency leadership.

In his confirmation hearing, Perdue made clear that he had not been consulted on the budget cuts Trump proposed, adding that he opposed many of the reductions.

Trump’s proposal slashes everything from wastewater grants to foreign food aid programs and calls for staffing reductions at USDA service centers across the country to “reflect reduced Rural Development workload.”

Vermont has nine USDA service centers, from Brattleboro to Newport, aimed at connecting farmers to financial and technical assistance programs.

There are 50 service center employees statewide to assist the roughly 7,000 farms in Vermont. Trump has also instituted a hiring freeze at various federal agencies, including the USDA, leaving a handful of jobs open in Vermont, including for a food safety inspector and a public health veterinarian.

State and Senate officials said cutbacks to staffing would result in farmers losing access to crucial grant money.

“Congress can appropriate all the money it wants for a conservation program, but if farmers can’t walk through the door at a nearby USDA office, that money goes back to the federal Treasury,” said Tom Berry, an agriculture policy aide to Leahy based in Vermont. “Anything that cuts back on the ability to reach farmers and deliver the help they need is more of a threat than lack of dollars.”

During the Perdue hearing, Leahy criticized the Trump administration’s hiring freeze and urged the nominee to be an ally to the “dedicated, competent, loyal” employees at the USDA, contending “they deserve your support.”

In the five minutes he was allotted during the Perdue hearing, Vermont’s senior senator raised a number of concerns — from flawed immigration and visa programs for farmers to inadequate forest fire preparedness.

As Vermont’s agricultural producers share their hopes and concerns for federal policy changes with Vermont’s congressional delegation, Leahy is best positioned to bring about change. He is working against USDA cuts in his role on the Appropriations Committee. He is also looking to address Vermont’s agriculture concerns as proposals for a new farm bill begin to germinate in Congress.

Migrant dairy worker, calf

An immigrant dairy worker tends a Holstein calf. File photo by Terry J. Allen/VTDigger

Visas and enforcement

Like Welch, Leahy is also worried about the future of farms without the labor of immigrant workers who may be in the country without permission.

During the Purdue hearing, Leahy brought up the federal H-2A visa program, which offers temporary agricultural visas for work such as harvesting fruit.

Leahy criticized the seasonal nature of the program, saying dairy farmers need year-round employees.

“You can’t have somebody come in for six months and then say, ‘OK’ — to the cows — ‘I’ll be back in six months to milk you again,’” Leahy said.

While any change would likely be directed through the Senate Judiciary Committee — where Leahy is a senior member — Perdue said he would support an exemption to the visa program for dairy farmers that would allow for extended stays.

Leahy included such an exemption in the 2010 Comprehensive Immigration Reform Act, which received bipartisan support but died after pushback from conservatives.

The congressional delegation is also concerned about the recent arrests of Vermont immigration activists by U.S. Immigration and Customs Enforcement. In a conference call with officials in late March, the delegation pressed ICE not to harm Vermont’s farm labor force through crackdowns. Republican Gov. Phil Scott said one of the primary reasons he supported a state immigration bill was to protect the agricultural economy in Vermont.

Vermont Agriculture Secretary Anson Tebbetts said there is widespread anxiety among farmers over the future of immigrant laborers in the state.

“Dairy farmers will tell you they don’t know where labor policy is headed,” he said. “There’s a lot of uncertainty on the farm.”

Tebbetts said he hasn’t heard of any ICE raids on Vermont farms but that he and other state officials are looking to meet with ICE soon to clarify the mission of the federal agency under Trump.

Future of dairy in the farm bill

Dubbed the “Swiss Army knife” of legislation by President Barack Obama in 2014, the farm bill stakes out critical farm, food and forest policy for five years. The previous version had expired earlier, but Congress extended many of its provisions for a year.

As negotiations approach for the next version, Leahy is looking to boost support for dairy farmers amid a global drop in milk prices. The global market for milk, like oil, is extremely volatile, dependent on the economic strength — and appetites — of nations across the world.

Russia, for example, used to gobble up European cheese. But after the country was slapped with economic sanctions in 2014 over its involvement in Ukraine, Moscow retaliated by banning Western cheese, a move that bloated the global market with surplus dairy and lowered prices, according to NPR.

Leahy urged Perdue, if confirmed, to use his power as secretary to extend emergency support for struggling farmers, citing similar action taken to bail out Southern cotton farmers last year.

In 2016, then-USDA Secretary Tom Vilsack used his existing authority to approve a $300 million emergency cost-sharing program for cotton producers struggling from a drought that was worsened by an intense hurricane season that ripped up acres and acres of the fluffy fiber.

Perdue seemed open to Leahy’s proposal.

“As a son of a dairy farmer, and having dairied myself, I understand the hard work — seven days a week, 365 days a year — that our farm families, particularly smaller farm families — particularly in your area — go through,” said Perdue, promising to fight for such a program.

Experts say temporary assistance, however, won’t heal the underlying economic wounds of dairy farmers. Instead, they say a more comprehensive approach is needed.

Leahy’s dream fix is a dairy market stabilization program designed to rein in wild fluctuations in dairy commodity prices.

Dairy

Cows on a Vermont farm. File photo by John Herrick/VTDigger

The so-called supply management program — which had been a major hope for smaller Northeastern dairy farmers during the last farm bill debate — would have required farmers participating in a new dairy insurance program to reduce milk production when dairy prices fell. The program would have scaled back milk payments for farmers who produced more than their average seasonal output, to try to avoid an oversupply of milk on the market and further decrease commodity prices.

These provisions aimed to stabilize the market and, in turn, reduce the need for USDA price supports.

Although a Leahy-backed stabilization program passed both chambers in the 2014 farm bill, Republican leaders balked at the program in the final days of negotiations. House Speaker John Boehner was the chief critic of market stabilization, calling it a “Soviet-style” program.

Scott Brown, a University of Missouri dairy economist, said different market segments of the dairy industry do not all agree on the idea of market stabilization.

“If you are a dairy processor you probably aren’t excited about a plan to lower the amount of milk available to you to make dairy products,” Brown said.

While Leahy would like to see the program offered again in the 2018 farm bill, a Senate aide acknowledged that “there does not seem to be sufficient political support.”

Leahy’s efforts are now focused on more politically practical reforms, including changes to two insurance-type programs established in the last farm bill: the dairy Margin Protection Program and the Livestock Growth Margin.

The Margin Protection Program — the more popular of the two programs among Vermont farmers — allows dairy producers to buy milk-loss insurance plans through the USDA for an annual fee of $100. The base plan reimburses producers when the national dairy margin — defined as the difference between the wholesale milk price and average feed costs — is less than $4 per hundred pounds of milk, or hundredweight.

More comprehensive plans, with heftier support payments for milk losses, are available at a higher price to the farmer. The cap in coverage currently ends when a farmer is losing $8 per hundredweight.

The other program, the Livestock Growth Margin, offers similar help to dairy farmers, though assistance is calculated based on a farm’s profits.

For the first time, these two assistance programs required farmers to calculate their risk and submit estimates to the government. Before these programs, farmers simply signed up in a USDA office for the Milk Income Loss Contract, which disbursed direct monthly payments when dairy prices dropped below a certain amount.

“It used to be a passive program. Now it’s an active program where farmers have to figure out their own risk,” said Diane Bothfeld, Vermont’s deputy agriculture secretary. “It would be great if all farmers knew how to calculate the exact price to make milk. Some do, some don’t.”

After the programs were passed in the last farm bill, USDA and state officials held workshops across Vermont to explain how to enter the programs. And while 566 Vermont farms signed up for the Margin Protection Program, 93 percent of farms signed up for the cheapest, catastrophic coverage option, leading to inadequate payments when prices dropped.

Mexican workers milk cows in the milking parlor of a Vermont dairy farm.

Workers milk cows on a Vermont dairy farm. File photo by Terry J. Allen

“Farmers weren’t seeing many payments,” said Bothfeld. “It was discouraging, because the milk prices seemed really low and farmers were struggling, but they weren’t getting anything out of this program.”

The payments are meager, in part, because of how the federal government currently calculates feed costs.

The federal standards use wholesale, not retail, grain prices, which also don’t include processing and shipping costs that inevitably raise prices for farmers. In addition, Congress skimmed 10 percent off the feed cost calculation during late-stage negotiations over the 2014 farm bill.

According to Dairy Herd Management, a trade publication, only farmers who bought the more expensive comprehensive plans received government assistance last summer. Nearly 21,000 farmers who purchased the catastrophic $100 coverage option didn’t get one federal check.

Leahy is looking to raise the margin beyond the current $8 cap in order to raise payments to dairy farmers. But while lifting the cap would put more money in the farmer’s pocket, some are concerned about the added federal cost — potentially $2 billion over 10 years.

In addition, farmers are looking for payments to be calculated and dispensed every month, as opposed to the bimonthly payment system in place today. Such a change could add more financial stability to farms, and might more accurately reflect the constantly shifting dairy market. (The current base price per hundredweight of milk is around $16.)

Vermont’s senior senator is also advocating for more flexibility for farmers by allowing them to shift between insurance programs. Farmers were locked into either the Margin Protection Program or the Livestock Growth Margin for the full term of the last farm bill.

Brown, the dairy economist, has laid out a variety of proposed changes to dairy margin programs that would strengthen support for farmers.

“All of them cost more money for the federal government,” he said.

Brown points out that the federal dairy support is roughly $70 million a year for an industry that takes in $40 billion a year worldwide.

“When you think about an industry that has $40 billion in cash receipts, it’s a pretty tall order to make a safety net that can adequately protect dairy farmers,” Brown said. “There’s a political choice to be made over how much we are going to spend on dairy safety.”

farm

Goats graze on the Flatlander Farm in Addison County. Courtesy photo

Environmental conservation

Federal conservation programs tucked into the farm bill provide crucial support in passing land from aging farmers to their younger counterparts.

Leahy has been a key defender of federal farmland conservation programs for more than a decade, and staffers say he will fight any proposed cuts in the programs, which are often high on the list when lawmakers look for savings.

One of those areas is land conservation.

The Vermont Land Trust has supported the continued operation of more than 800 farms of all shapes and sizes over the last 25 years, according to Gil Livingston, the organization’s president.

“Half of every dollar we spend for farmland conservation in Vermont comes out of the farm bill,” Livingston said. “Without the farm bill, we’d do half as many farmland conservations.”

(The Vermont Land Trust also receives significant support from private foundations and donors.)

In Vermont today, fledgling farmers often struggle to purchase land.

“There’s very little farmland in Vermont that’s not subject to real estate pressure because of its proximity to New York, Boston and Montreal,” Livingston said. “There are very few farmers who are well capitalized enough to purchase farmland without help.”

The land trust matches young farmers with retiring ones, negotiating purchases and helping to defray land costs through conservation easements or direct assistance to farmers. The land trust also purchases four or five farms a year when retiring farmers need to sell, holding the land until a fledgling farmer expresses interest.

Livingston said his organization is “really worried” about potential federal cuts, contending that Vermont would benefit from even more assistance.

“There is four times the demand as there is money,” Livingston said. “The waiting list is very long, and when people wait in a queue for too long, we lose farmland protection opportunities.”

USDA

Literature at a USDA Service Center in Middlebury explains various federal grant programs for farmers. Photo by Jasper Craven/VTDigger

Rural economy programs

In his role on the Appropriations and Agriculture committees, Leahy is also looking to spare a number of USDA programs from deep cuts or outright elimination.

Under the White House proposal, the Rural Business Cooperative Service would be discontinued. The service offers grants ranging from $10,000 to $500,000 to businesses with fewer than 50 employees in rural areas.

USDA Rental Assistance Grants — which subsidize payments for rural low-income tenants, including farmworkers — would be cut by $50 million nationally under Trump’s proposal.

The USDA’s Forest Service would see $41 million in cuts to forest programs. In 2016, Vermont received more than $5.7 million in grant money from the forest service to support everything from fire prevention efforts to restoration of community forests.

Tebbetts, Vermont’s agriculture secretary, said he is closely tracking developments in the farm bill and the appropriations process, noting that 15 percent of his agency’s $22 million budget comes from the federal government.

Tebbetts said the agency is in “constant contact with the congressional delegation” on how things are shaping up. “But because the agriculture secretary is the last Cabinet official to be nominated, we are still listening and learning, trying to figure out what the future may mean for our farmers,” he said.

Chief among Tebbetts’ various concerns is a future without federal support for clean water and wastewater programs.

Anson Tebbetts

Anson Tebbetts, secretary of the Agency of Agriculture, Food and Markets. File photo by Erin Mansfield/VTDigger

Trump would put an end to the Water and Wastewater loan and grant program, which provides funding for clean and reliable drinking water systems and sanitary sewage disposal across Vermont and the rest of the country.

USDA dollars are crucial in helping farmers around the Lake Champlain basin, the Connecticut River and Lake Memphremagog to improve farming techniques and strengthen water quality.

There’s also anxiety from Tebbetts and others that the Environmental Quality Incentive Program, another USDA program, could see cuts in the next farm bill. The program offers financial and technical assistance for everything from drought mitigation to manure management.

Federal funds are a major source of money to help farmers contain phosphorus runoff into Lake Champlain. Vermont dairy farmers are hoping that even more EQIP money will be available in the next farm bill to install expensive new infrastructure required to meet the cleanup plan for the lake.

“The economics of running a farm right now are not good,” said Jeff Carter, an agronomist at the University of Vermont who helps connect farmers with federal grants. “If additional requirements are put on that farm — even if they get financial assistance — they still have to come up with a chunk of money. Farmers right now are talking to us, saying, ‘Well, should I sell my farm now or should I try to go through these upgrades?’”

Vermont is also one of the highest users of USDA assistance to help farms transition to organic production.

“So far, the proposals out of the White House haven’t gotten into granular detail,” said Berry, Leahy’s Vermont agriculture aide. “This organic program does not require much money, but it is important for organic agriculture in Vermont and other states. Sen. Leahy will fight for it.”

Another farm bill program Vermont relies heavily on provides specialty crop block grants. In recent years these grants have supported various producers, including Vermont hemp growers and winemakers. They also enable research at the University of Vermont aimed at solving agricultural challenges, from the fight against the invasive swede midge to determining the best bee-rearing techniques.

The Northeast Kingdom relies heavily on the REAP program, created by Leahy in the 2000 farm bill. The program designated a handful of economically struggling rural zones across the country, including the Kingdom — which has received at least $68 million in USDA development grants since 2000.

Sen. Patrick Leahy, D-Vt., raises the traditional “milk toast” to dairy farmers after the signing of the farm bill in 2014. U.S. Senate photo

Farm bill politics

The political factions for the farm bill often cut across geographical lines, not party ones.

States teeming with industrialized farms and thousands of cows have different interests than regions where farmers work on smaller plots of land with fewer livestock.

Tebbetts said divisions emerged during a recent meeting with agriculture secretaries and commissioners from New England.

“Hearing remarks from around the table it was clear there was no real consensus about how to deal with dairy policy,” he said.

Leahy is looking to build a coalition of states with smaller dairy producers over the farm bill, a team that may include members from states like Pennsylvania, Michigan, New Hampshire and Maryland.

Both Leahy and Welch also have a strong relationship with U.S. Rep. Collin Peterson, D-Minn., the top Democrat on the House Agriculture Committee. Peterson was a key ally in the 2014 farm bill push for stabilization in the dairy market.

The most expensive section in the farm bill is the Supplemental Nutrition Assistance Program, once known as food stamps. In the last farm bill, tea party Republicans looked to divorce SNAP from the farm bill in an effort to cut food assistance by $40 billion and eliminate eligibility for 3.8 million low-income recipients. The cuts failed to gain widespread support and SNAP remained in the farm bill — though the final legislation cut $8.6 billion in nutrition spending over a period of 10 years.

It’s unclear the fate of SNAP in the 2018 farm bill, though Trump’s budget proposal offered no spending reductions to the program. Leahy aides predicted Republicans will likely again push for cuts to SNAP, adding that most farm bill programs are expected to be level-funded, if not cut.

“When Sen. Leahy was chairman, he literally put the word ‘nutrition’ back in the committee’s official title, and he acted to make hunger and nutrition a priority,” said Berry. “That title and that emphasis have stayed ever since.”

The farm bill writing process will heat up once the Senate Budget Committee provides the Agriculture committee a secure budget number for the USDA, at which funding levels can be filled in.

Sanders is the top liberal on the Budget Committee. Two Sanders staffers did not respond to multiple requests to discuss the budget process and what the Vermont senator’s work on USDA funding entails.

Welch framed the farm bill as a key piece of legislation to help Americans of all stripes, implying that Trump should push to enrich the USDA, not slash its budget.

“The farm bill is an absolutely essential tool to help us revitalize rural America,” Welch said. “Rural America is struggling, we are losing population, the economy is weak. The titles in the bill — from conservation to rural green energy programs — have helped revitalize Vermont’s economy of local production.”

Jasper Craven

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