Horizon Organic, which pulled out of New England last year and left 89 farmers without buyers for their milk, has announced its final package of financial support intended to ease the pain of their transition from the region.
Members of Vermont’s organic industry — including those who penned a letter last summer asking Horizon to provide better transitional support for the farmers it left behind — have more questions than answers about how the money will bolster the market in the impacted region.
Officials from Horizon — owned by Danone, a global food company based in France — sent a letter on Thursday to Anson Tebbetts, secretary of the Agency of Agriculture, Food and Markets, detailing the “the fourth and final pillar of our transition plan, designed to ease the impact” of their exit.
“It wasn’t clear from the letter what kind of investments they were making in Vermont,” Tebbetts said. “I’m curious to have some follow-up discussions with them about that.”
The package includes an investment of more than $14 million “through partnerships with dairy farming co-ops and processors, which establishes new relationships with more than 50 dairy producers in Western New York,” the letter from Horizon said.
Horizon has cited their new contracts with farms in western New York, which are closer to their processing facility, as a reason why they left parts of New York, Vermont, New Hampshire and Maine.
The package also includes “market-premium price payments that will provide direct financial support to farmers in the Northeast, along with additional pay price increases totaling approximately $3.6 million.”
The 89 New England farmers who were left behind during the transition, however, will not directly benefit from those investments.
The $14 million investment and premium-price payments are focused on Horizon’s new and existing farmers in New York and other areas of the Eastern U.S., according to Chris Adamo, vice president of public affairs and regenerative agriculture at Danone North America, who responded to VTDigger’s questions over email.
Asked whether any part of the package would directly help the farmers impacted by Horizon’s transition, Adamo pointed to the last line of the new package: $500,000 in new grants administered by The Organic Center “to support projects connected to the future of organic dairy and Northeast farming and agriculture.”
The grants are intended to provide economic resilience to organic dairy and “support activities that will aim to bring more organic dairy to more markets and people,” Adamo said. While individual farms can apply for the grant, it is also open to groups that represent, train or provide assistance to farmers and nonprofit organizations.
“Any of the 89 farmers affected by our transition are eligible to apply, and the Northeast region of the U.S. will be prioritized as part of the selection process such as the systemic challenges that the region (encounters) are significant,” Adamo said.
Adamo said Horizon has already provided support to the 89 impacted farmers by offering 18-month contract extensions, transition payments and access to farm financial consultants.
Ed Maltby, executive director of the Northeast Organic Dairy Producers Alliance, who signed the letter last summer urging Horizon to do more for those farmers, said some still haven’t received transition payments they were promised. Adamo refutes this claim, saying all of the transition payments have been issued.
On the other points of the plan, the $3.6 million “does not support any significant increase in pay price,” Maltby said. He also pointed to a press release from The Organic Center about the $500,000 in grants, which “does not prioritize the northeast for grant funding and does not mention direct cash payments to farmers to cover the losses they have sustained from Danone’s actions,” he said.
“We do not see anything announced that will directly affect farmers that Danone dropped,” Maltby said.
Tebbetts, Vermont’s agriculture secretary, said there are state funds that can help any farmers who are struggling due to Horizon’s departure, including $200,000 in grants to assist with the transition to a new buyer — Organic Valley, for example, has accepted a number of Horizon’s former producers, but some farmers need to upgrade their facilities before they can comply their new contracts.
Another $19 million from the USDA, channeled through the Northeast Dairy Business Innovation Center, is available for producers who want to improve their milk storage, handling, and energy efficiency.
“We’re trying to do our best to address some of the really difficult issues with organic dairy right now,” Tebbetts said.
