What the Farm Bill May (or May Not) Mean for Vermont Farmers

The 2012 farm bill is continuing on its arduous way through the sausage grinder after passing the Senate in a 64-35 vote this afternoon. It’s a behemoth of a bill, to which lawmakers at one point attached more than 300 amendments — some entirely unrelated to the business of food and farming.

The complex bill would trim $4 billion over 10 years from the food stamps program; consolidate several conservation programs; cap subsidy payments to farmers making (get this) more than $750,000 a year; and would do away with direct payments to farmers — currently totaling roughly $5 billion a year in subsidies — replacing that system with a crop insurance program instead. But subsidies aren’t going anywhere yet: The government would subsidize farmers’ insurance premiums while also guaranteeing a backstop for insurance company losses.

One amendment from Vermont’s own Sen. Bernie Sanders would have allowed states to require that food containing genetically modified organisms be labeled as such — but that measure failed this afternoon in a 73-26 vote.

Political wrangling aside, what does the farm bill have to do with Vermont? The answer depends on whom you ask. Some dairy farmers are saying that, for some businesses, an overhaul of the so-called dairy “safety net” could make the difference between keeping the farm and going under. Other observers are skeptical that the farm bill will have much, if anything, to do with the kind of agriculture practiced by most Vermont farmers.

“The farm bill has become very much oriented toward and driven by the commodity agricultural industry,” says Andrea Stander, executive director of Rural Vermont. “For that reason, there aren’t a lot of things that are in the farm bill that are directly connected to Vermont-scale agriculture.”

Retired Leicester organic dairy farmer James Maroney agrees.

“Vermont is so on the fringe of this bill, it’s amazing that Sen. Leahy even has the time to make a comment on this,” says Maroney, referring to a press release this morning from Leahy’s office. “It has nothing to do with Vermont farms.”

“Farm bill” is actually shorthand for the Agriculture Reform, Food and Jobs Act of 2012, which will replace the 2008 iteration of the farm bill. With details still being hashed out, it’s hard to know exactly what the final bill will cost. The indications so far? A lot. The Congressional Budget Office is estimating that the cost over 10 years will be about $969 billion, with roughly 80 percent of that amount going toward the Supplemental Nutrition Assistance Program (SNÅP), also known as food stamps.

The total projected spending is up from $288 billion over a five-year period under the 2008 bill.

Modern farm bills have been around since the 1930s, and are typically passed every five or so years. The 1933 predecessor to today’s legislation was the first to establish direct payments to farmers — meant to guarantee a price floor for their crops and discourage surpluses.

Ever since, the focus of similar legislation has been on commodity agricultural industries in the Midwest and the South, with much less attention paid to small family farms in, say, Vermont. Stander says that Vermont farmers still stand to be affected by pieces of the legislation — such as financing rules or access to land initiatives — but that, by and large, most Vermont farmers aren’t paying much attention.

“It rarely has any impact on them, at least in a direct way,” Stander says.

Not everyone agrees: Ed Maltby, who directs the Massachusetts-based Northeast Organic Dairy Producers Association, says the farm bill has plenty to do with New England producers. The current legislation protects a cost-sharing measure that defrays the price for obtaining organic certification, and for the first time allows organic crops to be eligible for insurance based on the higher price of organic goods. It also holds on to an amendment to study the archaic and confusing federal milk marketing order that currently drives milk prices — a system that Maltby says is long overdue for an overhaul.

And, in fact, Vermont’s remaining dairy farms — which numbered fewer than 1000, as of last year — are mostly likely to see major changes in the wake of the future farm bill. Farmers’ numbers have been dropping since the 1940s, when more than 11,000 farms dotted the landscape here. The 2012 farm bill would abolish the current safety net for dairy farmers — called the Milk Income Loss Contract (MILC) — and replace it with an insurance program meant to protect farmers’ margins.

In the case of the dairy industry, the insurance program would be tied to a supply management program — something dairy farmers in Vermont have been clamoring for for years, saying that even a tiny surplus in milk has the power to ratchet down their prices by dramatic amounts. It’s the problem of oversupply that’s driven a boom-and-bust cycle of milk pricing for dairy farmers for years: Farmers produce more milk when prices are high. But oversupply drives down prices, which means Vermont farmers are stuck selling their milk at a loss. They either rack up debt or get out of the business — and the atrophy of farmers means supply drops. Prices go up, but in response, many farmers ramp up production in an effort to dig themselves out of the hole. It’s a vicious cycle.

Vermont farmers began rallying for a supply management program several years ago, but they stressed that such a program would have to be mandatory to have any teeth. Under the Senate’s take on the farm bill, participation wouldn’t be required, but it would be incentivized. In order for farmers to buy into the insurance program, they’d also have to sign on for the management plan.

Marie Audet, spokesperson and bookkeeper at the Audet family’s Blue Spruce Farm in Bridport, has been a longtime advocate for a supply management program among dairy farmers. She says the farm bill strikes a compromise. “I’m encouraged that we have a tool that’s actually going to address the problem,” she says.

Maltby isn’t so confident. He says the insurance program will work out in favor of larger producers, who because of economies of scale naturally have lower production costs. He says the program will hurt smaller producers, especially those with fewer than 200 cows. He also points out that data on feed and milk prices will be based on national averages, and that the higher cost of farming in New England compared to the South or Midwest will put northeastern farmers at a disadvantage.

On that point, Maroney agrees. “The farm bill more or less underscores the same program that we’ve been on for decades,” he says. “More production, fewer farms, more consolidation, more pollution. … It’s still all about producing (as much as possible), and there’s no small farm protection in there.”

And he, too, is skeptical about the margin insurance program. “The insurance business is not in the business of supporting Vermont dairy farms,” Maroney says. He says payments won’t be supplemental income so much as “a less catastrophic loss. How does that help?”

The House hasn’t taken up the farm bill yet, and majority whip Eric Cantor of Virginia asked the House ag committee to delay work on the bill until July 11. Rep. Peter Welch will be discussing the upcoming House debate on the farm bill at two events in Milton and St. Albans. 

Image by Flickr user Putneypics, used with permission under the Creative Commons license

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This article appears in Jun 20-26, 2012.

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