This commentary is by Gwendolyn Hallsmith of Vermonters for a New Economy; Grace Gershuny, author of “Organic Revolutionary”; and Kathleen Kesson, professor emerita at Long Island University Brooklyn.
On Aug. 24, rural Vermont was shocked by the news that Danone, the giant multinational agribusiness, was canceling its contract to purchase milk from more than two dozen small to medium-sized dairy farms in Vermont, effective August 2022.
It couldn’t happen at a worse time for the farms involved, with dairy prices falling, a global milk glut, plus competition from the large Midwestern operations that have finally come to the organic table.
The farmers are out of options. Their businesses will fail, or be bought up at bargain prices by other large agribusiness companies.
Meanwhile, science is telling us that by switching from traditional agricultural practices to regenerative agriculture, we can slow or even reverse one of the key drivers of climate change. These organic farms, while further down the road than conventional dairy, are not necessarily regenerative farms.
Regenerative farms practice adaptive rotational grazing, rely on pasture and hay rather than corn and beans to feed the cows, keep the ground covered with cover crops, and are advancing no-till and soil-building techniques.
Regenerative agriculture and forestry stand at the nexus of our food system and the climate crisis. To solve the climate crisis, we need to begin with food and forests.
Organic farming got our farmers out of the dairy herd buyout era. Regenerative farming will help them survive this new economic crisis. The carbon sequestration, biodiversity, water protection, and local food production the new regenerative farms can produce can be funded with public grants as payment for ecosystem services. This new, public market could be a significant source of support for farmers who take the incentives to shift production.
It’s up to us to create these incentives. We need to demand that state government take action. The Vermont Agency of Agriculture already has a working group on Payment for Ecosystem Services; it’s time that work got legs.
One of the barriers farmers face when they consider converting production is the massive debt they have incurred. The average debt load for big dairy farms in Vermont is $20 million. Per farm. That means when farms fail, the banks will own them next, lock, stock and milking parlor.
The public funding we provide to convert farms into regenerative practices needs to take this into account and work with financial institutions to cancel and refinance debt to allow for the transition.
Back 100 years ago, farmers in North Dakota faced a similar crisis. The banks owned the grain elevator and mill, set the prices, and drove the farmers into poverty. The farmers couldn’t afford their mortgages anymore, so the banks took the farms back.
So the farmers started the Non-Partisan League, won control of the state Legislature and created two institutions that contribute to the economic stability and well-being in North Dakota to this day — the public State Bank of North Dakota and the public North Dakota Mill and Grain Elevator.
In the 1980s, the federal policy was to buy out the small dairy farms in favor of the large Midwestern farms that supposedly gained from the economies of scale. New England farmers banded together and got our federal delegations to pass the New England Dairy Compact. With the compact, a surcharge was paid on all the milk sold in New England. That surcharge offered our small family farms a price subsidy that helped them stay in business. The organic market picked up, fortunately, just after the first Bush administration failed to renew the Dairy Compact legislation.
This year, the Biden administration has begun antitrust enforcement, another key public policy initiative to avoid the type of market consolidation that leads directly to powerful international conglomerates like Danone having the power to ruin so many Vermont businesses with one corporate decision.
These examples show that we can change the economic fate of some of our community’s key businesses while at the same time taking the critical steps to transform our food system from an enormous source of carbon emissions to a key part of the climate solution.
They also demonstrate the power of the public — we can create new institutions that foster local economic well-being instead of having all of our financial resources sucked out of state by the giant conglomerates. Public banks, public markets, public incentives and policies all have the capacity to change the game.
