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Vermont agriculture future

01/02/06 12:00AM By John McClaughry
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(HOST) Despite the recent extension of federal dairy subsidies, commentator John McClaughry says that with a new five year farm bill coming before Congress in the New Year, it's a good time to reassess how federal farm policies affect our state.

(MCCLAUGHRY) Farming in Vermont is principally dairy farming. Because of its economic impact, its influence on the Vermont landscape, and its historic contribution to Vermont's character and traditions, the future of the dairy industry is very important to the state.

For the past 40 years national dairy policy debates have revolved around one big issue: too much milk. Small dairy farms have steadily disappeared in Vermont and across the nation, but milk production has marched steadily upward. The major reason for this is the tangled web of Federal dairy support programs.

Dairy organizations have spent great time and effort lobbying the federal government to fix milk prices so they get what they perceive to be a "fair" price for their milk. With the demise of the Northeast Interstate Dairy Compact in 2001 and the likely eventual demise of its successor, called "Milc", M-I-L-C, more dairy farmers may at last come to realize that their economic success will not come from government market rigging, trade barriers, and taxpayer subsidies, but from competing creatively and aggressively in a marketplace that now includes all of the world.

New Zealand offers an instructive example. In the early 1980's
New Zealand's government had spent the country into the poorhouse. In an earth-shaking reversal of policy, the Labour government, installed in 1984, tossed out the entire web of price fixing, privileges, protection, and subsidies. It told its industries, including agriculture, that virtually overnight they'd have to get efficient, compete, and either succeed or disappear.

New Zealand farmers rose to the challenge. Today they are the world's most efficient dairy producers. They rely on low-input, ecologically sensitive, management-intensive grazing. Some farmers disappeared in the transition, but the innovative, aggres-
sive survivors have now defined world-class efficient dairy farming.

Some pioneering Vermont dairy farmers have gotten the message and have become more profitable than many old fashioned high-
investment confined feeding operations. Examples are the Yandow farm in Swanton, the Chase farm in Holland, and the Forgues farm in Alburg Springs.

The UVM Center for Sustainable Agriculture has helped these farms improve profits by organic certification, waste-to-energy systems, direct to consumer marketing, on-farm processing,
farm tourism, and exotic crops.

Simply dropping all government support for dairy farms overnight, as New Zealand did, would be too much of a shock. In time, however, Vermont's dairy farmers will prosper from having more freedom to innovate and compete in the marketplace. As their hardy forebears did long ago when the state was new, they'll succeed by relying on their own ingenuity and hard work, instead of pleading for an undependable government to guarantee them a special deal.

This is John McClaughry - thanks for listening.

John McClaughry is president of the Ethan Allan Institute, a Vermont policy, research and education organization. He spoke from our studio in Norwich.
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