Farmers comment on dairy proposals

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AUGUSTA – A three-tiered price support system to help farmers weather the dips in milk prices was one of 17 recommendations discussed Wednesday by more than 60 dairy farmers and industry leaders gathered in Augusta. The plan could funnel farm-saving subsidies to Maine’s remaining 398 dairy farms.

Farmers who gathered to hear the recommendations said that it must be a system that is meaningful to farmers while still being palatable to Maine’s consumers.

“The system needs to be a meaningful support, not life support,” said Nancy Smith of Monmouth, a dairy farmer and state representative. “We have years of catching up to do on bills.”

At the same time, the public is currently supporting dairy farmers, something that should not be taken for granted, said Turner dairy farmer Adrian Wadsworth. “The cost of the support system needs to be realistic. We can’t afford to give away the good will of the Maine consumer,” he said.

With milk prices paid to farmers plummeting to a Depression-era low, Maine has lost 900 farms in the past 20 years and it is estimated that almost 100 more will exit the industry in the next five years. Since 2001, highly volatile milk prices resulted in farmers being paid a low of $11 per hundredweight, $9 below their cost of production.

Governor John Baldacci formed the 20-member Task Force on the Sustainability of the Dairy Industry six months ago to research the crisis and make recommendations. The group has logged more than 1,000 hours of research and discussion and their final report will be forwarded to the governor by Nov. 13.

The task force unilaterally has backed the price system, which is designed to augment the federal Milk Income Loss Contract and a to-be-created Maine MILC program.

It was estimated at a meeting of the task force, which concluded just moments before the public hearing, that the combined programs, excluding the federal MILC payments, could cost up to $11 million, but experts think that as milk prices rebound from a historic low, the program would cost more like $5 million to $7 million.

But task force Chairman Fred Hutchinson wouldn’t discuss those figures with the farmers and how that program would be funded.

Hutchinson said the recommendations were still in flux and final figures were not available. Hutchinson said that even though the draft was still being created, Wednesday’s meeting was called to give Maine farmers a chance to comment.

Many farmers complained before the meeting began that it was difficult to comment on a document they hadn’t yet seen.

But Hutchinson anticipated the farmers’ concerns and carefully outlined the recommendations, listing the task force’s five major goals and their 17 proposed solutions.

The goals essentially were to maintain or increase the number of dairy farms in Maine, to improve cost competitiveness, to maintain the diversity of the industry, to develop state policies that support dairy farmers and to create a price support system to insulate Maine’s farmers against price fluctuations.

Each of the 17 recommendations were made to bolster the task force’s goals.

The following were among the goals:

. Create Maine Farm Zones, similar to Pine Tree Zones, as a vehicle for tax relief.

. Exempt all tangible personal property and farm buildings from municipal property taxation.

. Amend the state’s constitution to direct that farmland is assessed and taxed at its current use.

. Recognize the $100 million importance of Maine’s dairy industry.

. Encourage estate planning and generational transfer.

. Encourage young people to farm.

. Create a dairy management improvement fund to provide long-term loans.

. More fully utilize the University of Maine Agriculture Center.

. Support value-added processing of dairy products.

Roland Hemond of Minot has been dairy farming for 58 years and said Wednesday, “The last year and a half have been the toughest.” He said that working on taxation issues for farmers “will help us survive. It is really scary to see what is happening in our part of the state. There are no cows left.”

Several farmers spoke out against the large profits grocery retailers are making on milk despite the farmers’ struggles and asked the task force to research this issue.

Although the Maine Milk Commission sets a minimum price retailers can charge, farmer David Kent said that retailers consistently charge 29 or 30 cents per gallon more.

Dairy farmer John Nutting of Leeds said that the Big Three – Shaw’s, Hannaford and Wal-Mart – have increased their margins, even as the price being paid to farmers dropped.

“The supermarket industry is making close to 80 cents a gallon,” said Nutting. “I get my milk check from the neediest of the needy while the supermarkets are making more profit per square foot on milk than any other product in the store.”

Another meeting of the task force to discuss the farmers’ comments and determine its proposal has been set for 9 a.m. Wednesday, Nov. 5, at the Maine Department of Agriculture building in Augusta.