Lawmakers are seeking ideas and concerns that might help Vermont farmers as Congress begins to take up the federal farm bill, set to expire in 2018.
At stake are hundreds of millions of dollars in federal subsidies, and some say the fate of Vermont’s dairy industry itself. Lawmakers in Washington, including Vermont’s Congressional delegation, are keeping a close eye on developments, including proposals by President Trump for deep budget cuts.
The federal farm bill is one that’s been renewed 17 times already since 1933; in recent decades it’s been renewed every five years; since 1973 the farm bill has also included food assistance for low-income Americans.
The largest part of that food assistance is known as the Supplemental Nutrition Assistance Program, also known as food stamps. SNAP comprises 80 percent of the roughly $500 billion total included in the last farm bill, which passed in 2014.
Crop insurance makes up another nine percent of the total amount, conservation programs another six percent, and commodities and disaster programs the remaining five percent, according to a report by the Congressional Research Service.
House and Senate agriculture committees in Montpelier took testimony Thursday from an array of groups and individuals, most of whose concerns centered around hopes for better protections against unpredictable milk prices, a desire to keep food subsidies in place for low-income Americans, and around uncertainty arising from unpredictable federal priorities.
“What we heard today, unfortunately, was what we’ve heard for years in terms of dairy,” said Sen. Anthony Pollina, P/D-Washington, the vice chairman of the Agriculture Committee. “The message from dairy farmers was, that prices are consistently too low for them to make a living, and the federal government has not been able to put together a program to provide [greater price] stability.”
Conventional milk prices throughout the Northeast remain low, the CEO of the St. Albans Creamery Co-Op, Leon Berthiaume, told legislators in the two-hour hearing. This is the result of “an incredible oversupply” of milk in the region, he said.
Vermont dairy farmers are hit especially hard by the low prices their milk commands, Berthiaume said, because it costs them $4.75 more than the national average to produce 100 pounds of milk. These costs arise from the higher prices Vermont dairy farmers must pay for feed and for costs associated with operating a dairy farm, he said.
Dairy farmers are also feeling squeezed by new regulations limiting how much phosphorus they’re allowed to release into state waterways, Berthiaume said.
The SNAP portion of the farm bill is important, too, Berthiaume said. Every dollar spent through that program effectively contributes $1.70 to the economy, and 82,000 Vermonters depend on roughly $9 million in food subsidies the program provides each month. About a third of those Vermont assistance recipients are under the age of 18, he said.
Witnesses providing testimony to the House and Senate agriculture committees Thursday morning appeared most irked by the Margin Protection Program, a piece of the farm bill put in place in 2014, meant to insure dairy farmers against low milk prices.
The program doesn’t work, Berthiaume said, because it takes in from farmers far more money than it pays out when they need help. The program needs to be revamped or done away with entirely, he said.
“We need to create a true safety net for dairy farmers that fall on tough economic times,” Berthiaume said.
The MPP took in $80 million more than it paid out since it was enacted, Bernie Guillemette, who owns farms in St. George and Shelburne, told legislators Thursday.
It’s important to improve the program because without it, dairy farmers are subject to wild swings in milk prices even over the course of a single year. The price farmers were paid for 100 pounds of milk varied between less than $18 to more than $20 during 2015 — a 14 percent change, Guillemette said. In 2016, 100 pounds of milk fetched between $16 and nearly $20, a swing of 20 percent.
Farmers need greater price stability than that, and the MPP is supposed to act as insurance against this type of market fluctuation, he said.
But it doesn’t pay dairy farmers back when they need it, at least not in Vermont, said Vermont Farm Bureau President Joe Tisbert.
The program’s based on the margins between what it costs on average, nationally, to produce milk, and what price milk brings farmers, Tisbert said. Because it costs so much more to produce milk in Vermont, in-state dairy farmers are seeing their production costs exceed the price their milk brings in, and still the MPP isn’t kicking in, because the national average margins haven’t triggered it, he said.
Tisbert said conversations he’s had with other farmers across the country lead him to believe the farm bill will receive about the same funding this time as it has in previous years. But he also said there’s a desire to cut SNAP funding, partially or entirely, from the bill.
“I think it’d be devastating to the whole country to cut SNAP,” Tisbert said. “What’re you going to do, are you going to take food away from the people that need it most?”
At the very least, the MPP needs to be reformed by making it more sensitive to regional differences in input costs, Tisbert said.
The federal government is also requiring that Vermont dramatically cut back the amount of phosphorus the state pollutes Lake Champlain with, and Tisbert said about half of the roughly $2.3 billion cost over the next 20 years is expected to come from federal sources, primarily through farm bill appropriations.
Assuming that the farm bill is funded at the same level this time as in years previous, that amount should remain available to subsidize farmers in their attempts to reduce their contribution to Lake Champlain’s phosphorus problem, he said.
It’s not clear whether that’s likely, Lt. Gov. David Zuckerman said in an interview following the hearing.
“I think it’s an open question” whether the farm bill will receive the funding it has in years past, he said. President Trump has recommended a 21 percent cut to the U.S. Department of Agriculture’s budget, but Zuckerman said that Republicans’ failed attempt to repeal the Affordable Care Act shows that dramatic policy changes are hard to engineer, even with years of forethought.
“I don’t think the president has smooth sailing for all the draconian policy changes” he’s proposed, Zuckerman said. “I’m certainly hoping that he hits that wall, but these are uncertain times.”
If federal funding should fall apart, Pollina said, Vermont dairy farmers might be well-served by a recent proposal to brand and market Vermont milk as something special, including more organic milk farming, and to ask a premium for it.
The state should be serving Vermont milk in all public schools, as well, Pollina said, and policymakers ought to be talking with other states in the Northeast to pursue regional milk policies designed to serve states like Vermont instead of states producing cheaper milk in the midwest.
This is the question confronting state leaders in numerous forms, Zuckerman said. Farmers are critical to Vermont’s economy, but the goodwill the industry enjoys among residents is threatened by the high costs associated with reducing pollution farmers emit, he said.
“There’s a big shift coming” in Vermont dairy as a result, he said, “and we need real leadership at the top of the state to help [ensure] that shift is smooth and productive, or we’ll see a lot of damage to our dairy industry and our culture.”
Gov. Scott’s spokesperson, Rebecca Kelley, said Scott is “committed to supporting our agriculture industry,” and said he’ll talk with farmers and lawmakers to make sure the interests of farmers and the state are represented in the federal farm bill.
