Some Dairy Farmers Embrace Supply Management

07/13/10 7:34AM By John Dillon
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Vermont Agricultural Secretary Roger Allbee (left), U.S. Sens. Bernie Sanders and Patrick Leahy unveil legislation to stabilize dairy prices at the Ethan Allen Farm in South Burlington July 12, 2010
(Host) Vermont's congressional delegation wants to help stabilize dairy prices by controlling the supply of milk produced around the country.

The legislation unveiled this week is the latest of many attempts to overhaul a complex milk pricing system.

That system pays farmers less than what it costs to produce the milk.

But as VPR's John Dillon reports, the bill's backers say it will be tough to get it through.

(Dillon) What makes this bill different from previous attempts to change the dairy pricing system is that it aims squarely at the over-production of milk.

The bill would accomplish this through a supply management system. Here's Senator Patrick Leahy explaining how the program would work.

(Leahy) "What it says in simplest terms, you have a certain base price in your milk, and if you produce more then you're not going to penalize everybody else - you're going to have to pay a fee for it, and that's going to go into a pool."

(Dillon) The money from this pool would then be re-distributed to other farmers who stay within their production quotas.

This kind of supply management system has been talked about for years - a version is in place in Canada. But until recently, supply management was more on the fringe, an idea backed by left-leaning politicians and farmers' unions.

Senator Bernie Sanders says supply management has now gone mainstream, with support from co-ops and the Vermont Farm Bureau.

(Sanders) "There is widespread support among dairy farmers for the concept of supply management. And I think it's fair to say that was not necessarily the case five years ago or 10 years ago. But I think the recent crises I think, has changed that attitude."

(Dillon) Dick Longway farms in St. Albans town and his sons want to continue in the business. Longway says a quota-based system is better than the losses he's endured for the past few years when prices plunged to around $12 dollars for 100 pounds of milk. He says his operation is growing, but he's willing to pay a penalty if he overproduces in order to get a predictable price.

(Longway) "If this goes into effect, it's going to cost me money. But if I had to vote for it to put money on it, I'd put it on it today, only because I'd know what my sons are going to be in for the over the next so many years. I'd cut back tomorrow. I'd rather get $18 than $12."

(Dillon) Vermont's congressional delegation supports the bill.

But there are competing proposals in Congress. And Leahy says dairy legislation is never easy.

(Leahy) "You cannot get this passed just on our feelings in Vermont. Bernie, and I and Peter -- we're all united. We've got to get something through 535 members of Congress. And we have to have unity in the dairy industry. And we have to get people in other parts of the country - the Midwest, the Southwest, the Southeast, the far west. All these areas have dairy, and some are huge."

(Dillon) Vermont now has around 1,000 dairy farms, and the state has predicted as many as 200 could go out of business this year. Beth Kennett farms with her family in Rochester, a town that 40 years ago had 35 dairy farms.

(Kennett) "Now we are the last one left in our valley. We want to stay there. Our sons on Friday made that commitment to refinance our farm to keep farming there in Rochester. And we could base that on this hope for change that this legislation is proposing." 

(Dillon) Farmers say the supply management system is politically acceptable now because they can no longer withstand the price swings of recent years.

For VPR News, I'm John Dillon.

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