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A proposal from the Scott administration to provide $40 million in economic relief to dairy farms is renewing a long-standing debate about the viability of the dairy industry.
The coronavirus crisis has taken a devastating toll on dairies in Vermont and around the country. Cooperatives are buying milk well below the cost of production and limiting how much farmers can produce, causing some farmers to dump milk. At least five dairies in the state have closed this month.
But some lawmakers and farming advocates are questioning whether providing direct aid to only one agricultural sector is equitable, and the extent to which the funds would address longer term challenges facing the dairy industry.
The proposed grants are part of the $400 million economic relief package Scott administration officials outlined last week. It would be funded by the $1.25 billion in federal funding the state received through the CARES Act.
Large dairies could receive up to $110,000 in aid; medium operations could receive up to $90,000, and small farms could receive up to $60,000. The administration has also proposed another $10 million for a tiered aid program for cheesemakers and other dairy processors.
Darlene Reynolds, who runs Crosswinds Dairy in Alburgh with her family, told lawmakers on Friday that their farm is facing losses of a little more than $100,000 so far. They’ve been asked by their cooperative to sell 15% less milk, and have cut back on grain purchases, culled some cows and told lenders they have to defer payments.
She added that their dairy has been looking into insurance for the rest of the year to help mitigate some of the losses, and has been trying to diversify its revenue stream.
“This is a very expensive time of year for us,” said Reynolds, whose farm employs between eight and 12 people. “We’re out there planting corn, chopping hay, trying to pay for diesel, trying to keep people working because we are essential, and this is work that needs to get done.”
Agricultural officials stressed that the grant proposal is designed to help smaller dairies. One such operation is Orb Weaver Creamery in New Haven, which produces farmhouse cheese.
Co-owner Kate Turcotte said she and her husband have already cut their small herd from 12 to 10. They’ve had losses of around 50% due to declining restaurant sales and other factors.
Summer is their big season, and she’s concerned that they won’t be able to make enough money to buy hay for next winter.
“We rely on that retail dollar for our sales,” she said. “And to have maybe a 50% to 70% loss because of (declined) foot traffic and certain farmers’ markets being canceled, it’s going to be pretty bad.”
Dairies and processors would only be eligible for aid if they can demonstrate coronavirus-related losses, and cannot double count those with other federal aid.
“This really is about survival, and this is about getting people to the fall,” said Anson Tebbetts, who grew up on a dairy farm in Cabot and now serves as Secretary of the Agency of Agriculture Food, and Markets.
When asked what the agency was doing for non-dairy farmers, officials said they’ve developed a new $5,000- $25,000 grant for all farmers to implement business recovery measures, like switching to online ordering. Farmers had to apply for that grant by May 31.
Non-dairy farms and producers are also eligible for the more general business relief programs administered by the Agency of Commerce and Community Development, said Alyson Eastman, deputy secretary of the agriculture agency.
Sen. Ruth Hardy, D-Addison, who represents a county known for its dairies, said she was glad to see the agency working to provide dairy farmers some relief. But she and other committee members expressed concern that the agriculture agency did not have a commensurate aid proposal for non-dairy farmers, and instead was “sort of throwing them in the bucket” with other businesses.
“It’s striking to me, frankly, Secretary Tebbetts, that the Agency of Agriculture is not stepping up to make things easy across the board for agriculture,” she said.
This is a concern shared by “community-scale” agriculture advocacy non-profit Rural Vermont. Caroline Gordon, the organization’s legislative director, said in written testimony that the farmers Rural Vermont represents would have to compete with scores of other businesses for a total of $26 million in funding, compared to the $40 million going directly to dairy farmers.
The administration’s proposal “creates inequity among farmers and is unjust for those farms that are confronted with this categorical disadvantage,” wrote Gordon. They want the agricultural stimulus money to be open to any farmer who can demonstrate pandemic-related losses and expenses.
The pandemic-induced economic crisis has not impacted all Vermont farms in the same ways. Vegetable and livestock farmers that have been able to pivot to or expand online ordering and other forms of direct retail sales have seen an uptick in business.
Andrea Stander, policy director for Rural Vermont, noted that while many diversified farms have seen increased business, they also have incurred expenses to gear up production, buy the supplies needed to keep employees and family members safe, and pivot to new sales and delivery options.
Tim Sanford, co-owner of Luna Bleu Farm in South Royalton, said his vegetable and livestock farm has “actually been overly busy” during the pandemic. They started doing “barn to door” online ordering for people within driving distance, and have made up for a scale-back in CSA share delivery when more locals signed up. And they’re selling out of their meat.
“I think a lot of the vegetable people, everybody, they’re just scrambling to produce more,” he said. “Because the demand is there. I mean hopefully it will continue and people will realize that local food is really good.”
He added that labor and material costs for packaging have gone up — no more reusing egg cartons and paper bags for orders.
Lawmakers also discussed whether the aid should be available to dairies that have water quality infractions. The Senate Agriculture Committee had proposed that farms that are “not in good standing” with the state over water quality issues should not be able to receive aid, which is usually a requirement for federal agricultural money, according to legislative lawyer Michael O’Grady.
Sen. Chris Pearson, D-Chittenden, said that his committee has struggled with how to provide support to dairy businesses while also having a serious conversation about how to help farmers transition away from dairy.
“And the moment we talk about that, people are frustrated because … they maybe hear us giving up on farmers who are giving it their all, to say the least,” he said.
Gladstone, whose family also grows 200 acres of pumpkins, responded that while he thinks farm diversification is important, the state needs to be cautious about promoting specific types of farming.
“We grew 32 acres of hemp last year, and still haven’t been paid for 99% of it,” he said.
Amanda St. Pierre, a Franklin County farmer and executive director of lobbying group Vermont Dairy Producers Alliance, said that tailored business planning would be most helpful to dairy farmers. She pointed to programs in New York state as options for a regional partnership.
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