AUGUSTA – Delays in a federal program designed to aid dairy farmers is taking a toll on the industry in Maine.

“We’ve lost 20 farmers in the past year and we’re looking at losing another 20,” Maine Agriculture Commissioner Robert Spear said Thursday.

In the wake of the failure of the reauthorization of Northeast Interstate Dairy Compact last fall, which provided milk subsidies to dairy farmers in a fluctuating market, “Farmers just can’t pay their bills,” said Spear.

With dairy prices so low that Maine farmers are losing $5 for every hundred pounds of milk they produce, they are abandoning dairy farming at the rate of two a month. Some estimates put the number of dairy farms in Maine at fewer than 320.

The NIDC was paid for by milk processors. It set a base price and when milk prices dipped below that amount, paid the balance to the farmers. Its successor, the 2002 Farm Bill, was to provide a similar subsidy to be paid by taxpayers.

But U.S. Sen. Olympia Snowe said this week that 60 days after the 2002 bill was signed into law, farmers are still awaiting guidelines and they have not yet been given the opportunity to enroll.

Meanwhile, milk prices have plummeted.

“It costs more than $16 to produce a hundredweight of milk,” said Spear. “They’re getting $11.” He said prices are expected to drop even lower in August.

“This is a very, very serious situation,” he said.

The 2002 Farm Bill requires USDA’s Farm Service Agency to begin the farmer enrollment process within 60 days of enactment, which was May 13. Snowe has appealed to U.S. Agriculture Secretary Ann Veneman to “move forward with all due haste” to provide dairy farmers with some relief.

“When we lose farmers, we lose part of the infrastructure of Maine,” said the commissioner. “There is such a ripple effect. It affects veterinarians, suppliers and dealers, not to mention the rural quality of life. One farmer going out of business effects an entire rural community.”

Ned Porter, deputy commissioner, traveled to Washington, D.C., earlier this week and while he was there he spoke to members of Congress’s agriculture committees about the failure to begin the program. “We are very concerned about the impact of these delays,” he said.

Porter said that although program sign-up should be in place by Labor Day – it was originally scheduled for Aug. 1 – the new regulations are not completed and no checks can be issued until they are in place.

“It’s an administrative hold-up,” said Spear, “between the USDA and the Office of the Budget. There are a couple of areas holding up the entire program.” Some of these are refining the cap of $2.4 million placed on farmers with herds of 150 cows or more and which months farmers can qualify for subsidies.

Farmers hope to pick months in which market loss payments would be made using the “counter-cyclical” model originally provided for in the Dairy Compact. “It’s important that farmers have the flexibility in deciding when to submit for payments,” said Snowe.

Once sign-up is completed and regulations installed, checks can be issued that will be retroactive to Dec. 1, 2001, said Spear.