Hope for Berkshire Dairy Farmers
By Scott Stafford, The Berkshire Eagle, Pittsfield, Mass.
Aug. 6–The dwindling population of dairy farmers in Massachusetts is watching warily to see how new legislation, awaiting the governor’s signature, will affect their battered bottom lines.
Passed this week by the House of Representatives, the bill provides an income tax credit for farmers when wholesale prices sink below the break-even point, a $25 million low-interest loan program, the creation of a Massachusetts Dairy Promotion Board, and a coupon program to enhance sales of locally produced dairy products.
“It certainly will be a lot more than what we’ve got now,” said Warren Facey, executive director of the Massachusetts Association of Dairy Farmers and a dairy farmer in Franklin County. “It’s something to work with — it’s got to be better than where we have been.”
“We have to give relief to farmers, and I think the farm community should be very happy about this,” said state Rep. Daniel E. Bosley, a lawmaker who helped craft the relief package.
The bill’s most significant element is a tax credit based on similar legislation in South Carolina.
The credit allows farmers a rebate when the federally set price for dairy products drops below a trigger “break even” price established by the state commissioner of Agriultural Resources. The state Department of Agriculture is charged with developing regulations to ensure that the cost of the tax credit does not exceed $4 million.
The number of
dairy farms in Massachusetts has declined from 850 to about 157 in the past 20 years, Bosley said, and milk production matched consumption fairly closely.
“Today, we produce maybe 5 percent of the milk that we actually consume,” he said.
Bosley said the milk market is not a strict free-enterprise system: Milk has more federal regulations than alcohol, and the price paid to farmers is set by the federal government, not by the laws of supply and demand.
“It was done that way decades ago in order to protect small farmers. Unfortunately, today, it is dysfunctional,” he said. “A little over two years ago, farmers were getting the same price per 100-weight of milk as they were in 1988. That’s why so many of them have gone out of business — we’ve wrung all the profit out of this thing.”
Facey said the volatile price of fuel has sapped any profitability out of the current market.
“We’re not making any headway,” he said. “You can’t go out and replace broken machinery or anything. We can’t set our prices. We have to take what we get.”
Facey noted that in 2006, dairy farmers were making $3 per 100-weight of milk less than what it cost to produce it. 2007 was a decent year, but only served to make up for the losses of the previous year.
“With this tax credit, this year may be better than it looks right now, depending on how well it works,” Facey said.
Bosley noted that dairy farms account for about 100,000 acres of open space, land that plays an important role in water recharge. The retention of the dairy industry is also important for all of central New England in maintaining agricultural critical mass to retain the support systems and supply chains for farms of all types.
Other portions of the bill include allowing the Department of Agricultural Resources to establish a program and regulations to permit the use of discount coupons in the sale of milk, extending from 2 to 10 miles the span that individuals may drive farm equipment without registration, and creating a commission to recommend options for updating farming technology to promote energy conservation.
To reach Scott Stafford: sstafford@berkshireeagle.com, or (413) 664-4995.
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Copyright (c) 2008, The Berkshire Eagle, Pittsfield, Mass.
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