Annual Meeting Recap

 

2017 Annual Meeting

Agriculture & Rural Affairs Program

Recap

 

The 57th Annual Meeting of the Council of State Governments-Eastern Regional Conference, held August 13 through 16, 2017 at the Mohegan Sun Resort in Uncasville, Connecticut, was the site of much information gathering and relationship building among the attendees.

The Agriculture & Rural Affairs Committee had a particularly full slate of meetings, discussions and site visits.  In addition, the plenaries, roundtables, workshops and receptions and dinners filled the three days to the brim with things to do and information to absorb.

State Updates

 The Ag Committee began the conference on Monday morning with our ever-popular State by State Recap.  This is the opportunity to hear from members from each state the pressing issues that they have been facing in their committees this year.  Each year it is apparent that the 11 member states in our ERC region experience the same challenges to our farmers and rural areas.  It is through these discussions that we learn of solutions to our shared problems.

Among the issues discussed were tax credits to assist farmers facing low prices and high costs, agritourism laws, deer depredation, legalization of marijuana, neonics and pollinator protection, drought, Lyme Disease and ticks, aging farmer demographics, industrial hemp expansion, reporting of opioid prescriptions by veterinarians for animal use, dog licensing law changes, puppy mills, noxious weeds identification, prohibition of mango exportation from the U.S. Virgin Islands, farm labor issue, loss of low grade pulp plants, water quality, and FSMA implementation.  It was a lively discussion, with many ideas shared.

Washington Updates

The second presentation at Monday’s morning session was by Fran Boyd, partner in Meyers & Associates in Washington, D.C., who has been CSG-ERC’s ‘Washington insider’ for many years.  Fran assured us that the northeastern states were being heard in the recently initiated Farm Bill negotiations.  One problem he sees in the agricultural sector in Washington is the lack of appointments to the U.S. Department of Agriculture.  Sonny Perdue, the Secretary of Agriculture, is assisted by only a handful of helps in his department, making meaningful progress in issues difficult if not impossible.

The recent Budget for Agriculture is particularly draconian.  The question of whether Congressional leadership is capable of getting an Appropriations bill passed is yet to be answered.  There is a possibility that Washington will be operating under a Continuing Resolution, which might be kick started in September and dealt with in October and November.

There are two big issues that must be addressed in the 2018 Farm Bill – Dairy and Cotton.  The Margin Protection Program in the Dairy sector has never functioned as it was originally intended, and the opposition is clamoring for a fix to the problem.  Cotton, on the other hand, has no program and is looking for one to be offered in this Farm Bill.

The Nutrition Title of the Farm Bill, which is 87% of the total funding for Agriculture, might be facing some changes, including work requirements, and a cap of the money going to the states.  Another change that might be proposed is a change in who can offer the SNAP benefits.  Some want to allow only large grocery stores to participate in the program.  Others want an expansion of places that offer the program, including small neighborhood groceries and more Farmers Markets.

Fran will continue to keep our committee up to date on developments in the turmoil that is Washington.

2018 Farm Bill

Monday afternoon featured a briefing on the 2018 Farm Bill by Julian Baer, Senior Policy Advisor for Chairman Pat Roberts (R-KS), Chairman of the Senate Agriculture Committee.

Mr. Baer gave us an overview of the makeup of the U.S. Congressional Committees on Agriculture – both Senate and House – particularly concentrating on representation on either committee from our northeastern states.  There is a lot of work to be done by the committees (appointment approvals, reauthorization of bills including Farm and Pesticide, and implementation of standards).  The going is slow because of the lack of appointments.  The positions of Deputy and Undersecretary are still pending review.

Julian then reminded us of the painfully partisan progression of the 2014 Farm Bill, with splits in both parties making any compromise possible.  He compared the makeup of the committees then to the one now.  He discussed outside interests and their influence in the negotiations.  He also noted the increased needs of the stakeholders.  The farm economy is much worse now than it was during the last Farm Bill negotiations, therefore there are more people needing help.

The total Federal Budget is $52.5 Trillion.  Of this, 1.3% is for Supplemental Nutrition Assistance Program (SNAP), and 0.3% is for Agriculture.  Despite the relative small percentage of agriculture-related spending, the proposed budget is still seeking $10 million in cuts.  Of the total Farm Bill spending, 77% is Nutrition, 9% Crop Insurance, 7% Conservation, and 7% Commodity Programs.

There are people who want more spent on Commodities, Conservation, Loan Assistance and Research Programs; while others want to spend less, including environmental groups and budget hawks.

The most stark budget reality is that 39 programs in the existing Farm Bill have no baseline, meaning that there is no guarantee that there will be funding for the program going forward.  There are there themes in this Farm Bill negotiations – Champion for Farms, Rigorous Oversight of Programs, and Transparent and Inclusive legislative work.

Julian went on to describe the current listening session process.  The Senate Chairman’s first priority is to sign a bill into law.  The CSG-ERC Agriculture & Rural Affairs Committee held several conference calls in an effort to identify issues that are of high priority for our area in the Farm Bill.  These items included:

  • Dairy
  • Nutrition
  • Broadband
  • Specialty Crops
  • Conservation
  • Local/Organics
  • Hemp
  • Poultry & Grain

He discussed each of these issues and the problems, if any, associated with each.

The Committee had drafted a Resolution on the 2018 Farm Bill, which was then distributed to the members for review and discussion.  (Note:  This resolution was unanimously approved by the committee, and was introduced at the Executive Committee Meeting, where it was passed on a voice vote.  This resolution will be sent to the Congressional Delegations from the 11 Northeastern States in the ERC Region, as well as the Senate and House Agriculture Committees, among others

FSMA

At our Tuesday morning breakfast meeting, we were joined by NY Commissioner of Agriculture and Chairman of Northeastern Association of State Departments of Agriculture (NEASDA) Richard Ball, who spoke to us about the implementation and enforcement of the Food Safety Modernization Act (FSMA), and the potential financial and administrative impact this Act will have on our states.

He began by saying that FSMA was in Transition and Change.  The Produce Safety Rule, which is actually in effect, is ‘like GAP on steroids’.  The water quality part of this rule is the main concern for our farmers and our states.  The Preventive Control Rule is similar to GAP (Good Agricultural Practices), although now mandatory rather than voluntary.  The monitoring and verification of paperwork required by the Rule is going to be difficult to handle for the states.

Sanitary Transportation of Food is another Rule that will soon be in effect, but there is very little guidance from the FDA how this will be implemented.

The most problematic and potentially controversial rule is the Foreign Supplier Verification Standard.  American farmers will not accept one rule under which they are required to operate and foreign importers aren’t, particularly since there is little or no oversight of the farming practices in foreign food imports.

New York State has an Alliance Group that is training for FSMA.  They are traveling throughout the state, training farmers and training the trainers in the rules and good practices.

Funding is essential for the implementation of FSMA.  Some money has been appropriated in Congress, but we don’t yet know if this is funding that will really be coming to the states.  The FDA has provided the states with funding for the first rule – the Produce Safety Rule.  Whether more funding will be coming for costs and expenses related to the other rules we have yet to see.

The compliance strategy is to roll out the rules for bigger facilities first, with more time being permitted for preparation for smaller farms and facilities.

Commissioner Ball estimated that it will take five times the amount of time necessary to inspect the food and manufacturing facilities than they are currently spending.  A potential solution to this is spending more on IT.  Currently there is no training and no guidance.

One concern that the Commissioner identified was needing to know the rules of the road.  Many FDA divisions function in isolated silos.  There needs to be streamlining of the information and communication pathways.

Commissioner Ball’s main mantra has been ‘Educate before we regulate’.  We have not had time to educate our farmers in the rules prior to the mandated 2018 rollout of the Produce Rule.  We also need to be involved in the Guidance when it is developed.

Other problem areas include the definition and rules regarding Terminal Markets (packing houses).  Also there needs to be a science-based requirement for water testing, which there is not as the rules currently stand.  In addition, foreign importers have to be held to the same standards as U.S. farmers.  We also need to know what the FDA inspectors are going to be looking for when they are on the farm.  We don’t yet have that guidance.

Commissioner Ball discussed briefly the current North American Free Trade Agreement (NAFTA) negotiations, and what to expect from those.  Dairy is one of the main points of dispute.  It will take years to change NAFTA.  The first meeting will be in Denver in October – the Tri National Accord.  The discussions should prove very interesting.

Site Visits

Th Site Visits were very interesting and informative.  We visited Cushman Farms, a dairy farm milking 1,000 cows on an automated carousel.  They are members of The Farmer’s Cow, a cooperative of six farms, and ship to Agrimark and distribute value added products through their own manufacturing facility.  Our second stop was to Scott’s Miracle Gro, where we saw their new composting facility that handles yard waste and turns it into mulch.  And our final stop was to the University of Connecticut Veterinary Diagnostic Laboratory, where was learned how critical the job is that they do to protect our animals and population from disease and infection.

 

If those of you who were not able to attend would like more information, we would be happy to provide you with it.  We look forward to sending you future updates on these topics critical to agriculture in our region.

 

 

Bob Haefner and Tara Sad

CSG-ERC Agriculture & Rural Affairs Policy Consultants

bobhaefnerjp@comcast.net    tara.eric@gmail.com

Is Rural America the New Inner City?

On May 26 of this year, the Wall Street Journal published an article entitled “Rural America is the New Inner City”.  We decided to investigate this claim to see if it was, indeed, true.

The Wall Street Journal starts its article with the statement ‘There are twice as many funerals in Rural America as there are Baptisms’. For years, rural America thrived on a combination of mostly light manufacturing, distribution and agriculture.  In many cases across the country, manufacturing and distribution have left the rural areas, and agriculture has in many cases become less labor intensive.

The socio–economic charts have flipped. Rural counties now rank worst among the other categories of urban, sub-urban and small cities in terms of poverty rates, educational level, teenage births and labor force participation rates.  Poverty rates are up 45% in rural America, and income is down 7%.  Comparatively, urban and small city poverty is on the decrease, and incomes up 6%. The WSJ states that opioid use in rural small towns is up and driving the resulting crime rates up as well. As population has declined and businesses have left, real estate values in the commercial sector have plummeted, and many building are left vacant. Employers have said that the loss of employment is not due to a lack of jobs, but a lack of qualified employees. Those business simply moved to suburban areas where the qualified labor exists. A number of rural areas during the ‘80s and ‘90s opened call centers for major corporations. Those call centers have left for overseas locations where labor is cheaper. Advances in telecommunications and technology has enabled this exodus to happen.

Federal and state anti-poverty programs designed to help the urban poor have failed to address the rural poor. Many of those programs helped with public transportation and day care, which is lacking in small towns and rural areas. There has always been a wage gap between non-metro areas and their urban counterparts, but in recent years that gap has grown as manufacturing left the small towns.  The last recession widened the gap as well. While other sectors have recovered from the recession, the rural areas have not.  Consolidation has shut down many rural hospitals in the past decade.  Not only did this cause a loss of jobs and rural income, but it left the residence with much longer drives for health care.  And rural residents are among those most in need of health care, since smoking has not decreased among the rural population as much as it has in the urban centers, and obesity rates have been increasing. Rural America and its small towns do not have the treatment facilities for opioid addiction that our urban and sub-urban counterparts have, and yet the opioid crisis has hit the rural parts of our nation at a disproportionate level.

There has been a lot of federal and state money directed to helping the urban areas of our country, funding efforts to improve education and skills training, medical care, public transportation, jobs and rebuilding the inner cities.  Very little funding has gone to rural America.

In November 2016, many voters in the country’s rural counties cast their ballots for now President Trump in record numbers, thus electing him. He promised to revive our small forgotten towns, reduce regulation, increase trade, curb illegal immigration, and bring jobs back.  Many small town and rural people think Trump cared about their plight, and felt that other politicians have not for a number of years.

Let’s look at some USDA data.  While the population drain from rural to urban areas in 2015 slowed to no loss of population from rural counties, the population shift for the last half of the prior century was dramatic.

Percent of US Population

 

Rural Counties Urban Counties Suburban Counties
1950 44% 33% 23%
1999 18% 25% 57%

 

As of 2014 only 14% of the population is rural, but those rural counties amount to 72% of the land mass of the country.  Many farmers, departments of agriculture, and conservationist have pointed out that the 14% of our population produces 90% of our food on that 72% of the land.  Many counties are continuing to lose population, and what population remains is getting poorer.  These rural counties have lost a total of 650,000 people over the last four years.  But there is a flip side – other rural counties gained a total of 500,000 people, decreased poverty rates and increased employment levels.

From 2000 to 2015 total rural population grew at a rate of 4.5%. During that same period, the rural Hispanic population grew at a rate of 45%. The USDA commission on Rural Affairs states that currently rural employment is lagging urban employment.  The largest population losses are in the most remote areas. They also report that much of the loss of employers are due to the closing of large industrial plants, other manufacturing and distribution, and farms that have become more efficient with technology. Service producers and retailers are the bright spot, albeit paying lower wages.

One more set of statistics paints a rosier picture of rural America.  It is safer to live in Small Town USA. Urban violent crime per 100,000 is 74% higher than rural towns, and even the suburbs have a violent crime rate 37% higher than their rural counterparts. Gun crimes are far higher in both urban and suburban locals than in rural counties. And 95% of rural household own a car, while only 13% of inner city households do (although the presence of rapid transit in urban areas reduces the need for automobile ownership).

Now that we have begun to dig through data and ireports, we have found that there is a vast amount of information available on the subject – enough to warrant a second blog on the issue of urban vs. rural, which we will be bringing you soon.

Meet Massachusetts Representative Stephen Kulik

Representative Stephen Kulik hails from Worthington in Western, MA, and represents 16 rural communities to the north and west of Springfield. Steve went to Newton Junior College, and then attended Northeastern University before finishing his studies at the University of Massachusetts Amherst. Representative Kulik started his public service on his hometown’s Planning Board and then Selectboard.  He then served three years as a County Commissioner. Steve was the President of the Massachusetts Selectmen’s Association and the President of the Massachusetts Municipal Association. He has been a member of the Massachusetts House of Representatives for the last 24 years, and is currently the Vice Chair of the House Ways and Means Committee. Steve is the founder and co-chair of the Small Town and Rural Caucus. He is also Chairman of the national organization of state legislators called State Agricultural and Rural Leaders (SARL).  Rural and agricultural issues have been a priority for Steve since he began his legislative career.

We asked Steve what he sees as the biggest issue for Massachusetts agriculture. He said the biggest problem with MA agriculture is sustainability, with no growth in rural population and the ‘brain drain’ of young people leaving their small towns after they graduate. The loss of population and the loss of representation at both federal and state levels are a serious concern for education and infrastructure. Forty communities are without broadband access in western MA. Those forty communities account for only 30,000 people out of almost 7 million in the state.  Steve said, “It’s hard to get anyone’s attention to help those few towns and their small populations get access to broadband. The private sector won’t help because it is not financially viable, and the towns do not have enough of a voice in Boston to put pressure on the state to provide broadband.”

We then asked the Representative about what he considers to be the biggest issues, outside of agriculture, that the state is facing. He immediately answered, “The cost of health care”. He said it is a $40 billion commitment to provide health care to the residents of the state.  Currently 42% of the State budget is health care cost alone. The good news is that 98% of the state’s population has some form of health coverage.  The second biggest problem for the state, Steve said, is the loss of revenue over the last few years. The lawmakers admit that they do not fully understand why. They believe that part of the drop in revenues is fewer hours worked and lower wages paid to the employees of the state. The lawmakers also know that purchases at brick and mortar store sales are shifting to internet sales, which has affected sales tax revenue. He also believes that wealthy residents are holding onto investments, because they are waiting to see what happens in Washington in terms of tax policy.  Steve’s proudest accomplishment as a Representative has been casting a vote for marriage equality.

Representative Kulik noted with deserved pride that the House was able to complete work on the budget in two days, albeit long days. When we asked how they could manage getting a budget approved in two days he responded with; “Revenue is down, so there is no new spending and plenty of advanced work. We held eight public hearings around the state, each focusing on a different agency. Forty-two percent of health care costs in the budget accounts for much of the discretionary spending. The Governor provides the legislature with a good budget, the lawmakers are involved in decision making with the Governor before the budget even gets submitted to the House. The hearings are held jointly by the Governor, House and Senate.

We asked Steve what he values most about CSG-ERC.  He said, “CSG-ERC provides the benefits of a regional forum for agriculture and rural issues. ERC member states and provinces all have similar issues, which sometimes are very different than other regions of the country.” Steve added, “My favorite part of the ERC meetings is learning what other states are working on and how they are solving the problems that Massachusetts might be having.”  He learns so much from his peers in other states and considers the attendees to be like family.

Finally, we asked how the state’s remaining dairy farms are faring in this tenuous market. His response was that they are doing okay because the state has a dairy assistance program which provides a tax credit to dairy farmers. The dairy assistance is capped at $4 million in any given year, and is not given when dairy prices are up. Rep. Kulik says that many farms have told him that the assistance has really helped them over the years.

Steve’s last comment was how much he believes in legislative organizations like CSG-ERC and sharing of ideas, solutions and the networking between legislators.

You will be able to meet Rep. Steve Kulik and the other members of the Agriculture and Rural Affairs Policy Committee this summer at the CSG-ERC Annual Meeting, August 13 through 16 in Uncasville, CT.  Registration is available online.  We hope to see you there.

Meet Delaware Senator Gary Simpson

Senator Gary F. Simpson, representing the 18th Senate District of Delaware, has been in the legislature since 1998. The Minority Leader in the Senate, Gary also sits on the Agriculture, Executive, Rules & Ethics committees, and is a member of the Legislative Council. He retired from twenty years with the University of Delaware in 2011, and before that served as the general manager of the Delaware State Fair. He is also the Co-Chair of the CSG-ERC Agriculture & Rural Affairs Policy Committee.

We asked Sen. Simpson what prompted him to run for the Senate that first time. “I was working for the University of Delaware at the time, and he had some free time. I had experience working with the legislature in my position, and so when I was asked to run, I thought it would be a great new challenge for me. I had had leadership roles in other avenues of life, and felt I could bring that experience to the office.”

Although Gary had never run for office, never been involved in politics in any way, and never even gone to a county meeting, he had lived and worked in every area in the senate district, and he won the election in a seat that had been held by the other party for a quarter century. And he has won every election since. “The almost twenty years has gone by so quickly,” he adds.

Knowing Senator Simpson’s love of agriculture, we asked him what is the biggest Agricultural issue facing Delaware today? “Nutrient management is our main problem,’ he said. ‘Delaware is a coastal state. We have many inland waterways and bays. We are constantly fighting to control nutrient management, and to educate the people who think that agriculture is the sole blame for the pollution.”

Another issue of critical importance is the threat of avian influenza. Poultry is a huge industry in Delaware, as are the associate industries of soybeans and corn that feed the industry. An AI outbreak could be devastating for the state. ”We had an outbreak several years ago,” Gary said, “and we developed a strong protocol to manage Avian Influenza, but we have to always be vigilant for another outbreak. Delaware is a flyway for geese and other migratory birds, so the threat is there.”

Urban sprawl continues to eat up farmland due to the lure of coastal living and low property taxes. “We have an active farmland preservation program that the state has funded for the last twenty years,” Simpson notes. “Whether it will continue to be funded in this current budget cycle has yet to be seen.”

Changes to trade agreements under the new administration might negatively impact the robust exports Delaware is enjoying with Russia and China. ‘A lot of countries are buying chicken products, and we want to see that trade continue,’ he says.

We asked what he likes the most, and the least, about being a Senator. “I like solving problems,” he says. “Problem solving has been my forte both in public and private life.   Suggesting paths forward, finding solutions – that’s what I enjoy most.” He added, “There was a United States Senator, Bill Roth, who I use as a role model. Whenever anyone called his office from anywhere in the state, Senator Roth’s staff got back to that person in a quick manner to help solve the problem. I make it a point to try to do the same with my constituents.”

What he dislikes is politics. He sees legislators on both sides of the aisle being so tied to the political party they can’t see the other side. Votes are being taken straight down party lines.   “We’ve dirtied the word compromise”, he notes. “You get more done if you compromise.” This is why he likes the agriculture committee, because members from both sides of the aisle work together for a common goal of advancing agriculture in Delaware.

We asked how CSG-ERC helps him in is work. “I think we each have our own strengths in agriculture, whether it be dairy in PA, vegetables in NJ or poultry in DE. We can each benefit by hearing each other’s problems, and by seeing how each has have solved them. The sessions during our annual meeting where ag legislators compare notes about issues affecting their states is always incredibly helpful and informative.”

At the end of our interview, we asked what advice he might have that would help first time legislators. “Don’t take yourself so seriously. That is probably the biggest downfall of a lot of political folks.   They think the world will not continue without them. They are wrong. We can all be replaced.   Think of your term in office as an opportunity to serve and be involved, but know that other people can do it better.”

We doubt that that is true of Sen. Gary Simpson, who is one of the agricultural leaders who will be attending the CSG-ERC Annual Meeting in Uncasville, CT from August 13 through 16. We hope to see you all there.

 

Bob Haefner and Tara Sad

CSG/ERC Agriculture & Rural Affairs Policy Advisors

Meet Representative Carolyn Partridge

 Representative Partridge,  Chair of the Vermont House Committee on Agriculture and Forestry,is an 18-year member of the Vermont House of Representatives and the Chair of the Committee on Agriculture and Forestry. She is better known to the regular participants of the ERC as one of the two Co-Chairs of the ERC Agriculture and Rural Affairs policy committee, along with Senator Gary Simpson of Delaware. Carolyn has also been a chair of the ERC Annual Meeting Committee, and the Chair of ERC Nominations committee for several years.

Representative Partridge grew up in Hackensack, New Jersey, and moved to Vermont in 1972 after completing her Bachelor’s Degree in Oceanography at NYU. Outside of the Legislature, she is a farmer and seamstress, plus a mother of five and grandmother to one. Carolyn is also a member of her local school board, and past member of her planning commission and several other boards over the years. She is also deacon of her Congregational Church.

We asked the Representative what is the biggest agricultural problem in Vermont today. She replied that it is water quality – in Lake Champlain primarily, but in the Connecticut River as well. She says, “Forty percent of the pollutants going into the big lake are from agriculture run off.” She adds, “The worst pollution in the lake is at the north end, where the most farms are.” Vermont has passed a law that requires that all farms have a nutrient management plan, not just large and medium size farms as in the past. The cost of compliance with nutrient management regulations is anticipated to be approximately $25 million per year to the state, but a large part of this will be borne by the farmers. The Representative tells us that the Governor has committed to no new tax or fee to cover the cost of the cleanup.

Carolyn goes on to say, “Home lawn care and storm water management are also part of the total solution.” Two problems they are experiencing is that people in other parts of the state are not happy about being charged to clean up the lake since they are not contributing to the problem. The cleanup has been driven by a lawsuit against Vermont by the Vermont Office of Conservation Law Foundation.

We asked her what was the biggest non Agriculture problem in the state and she replied, “There are three – the Opioid crisis, funding for education, and balancing the budget.” (Sound familiar to any of the other jurisdictions?)

Carolyn was asked about how the Vermont dairy farms are doing with low milk prices. “We are now down to 800 dairy farms left in the state, and we are worried about losing infrastructure with less than 1000 dairy farms.” Carolyn herself travels one and three quarters hours to pick up parts for her farm equipment. Vermont farmers, like every other northeast state, are disappointed in the failure of MPP. Her committee is looking at ways to bring about farm sustainability.

We asked Rep. Partridge what her best job was. “I love being a legislator, in spite of it being taxing at times, and I love farming, because I don’t need to think while working on the farm.” She does go on to say that, while being a legislator is challenging, she loves the constituent service, even though she cannot make every constituent happy.

When asked what she wanted her legacy to be, Carolyn said, “I am proud of the fact that the ‘Farm to School’ and ‘Farm to Plate’ programs were big successes and have improved the diets of Vermonters.” She is also proud of helping to develop the ‘Working Lands initiative’, which created jobs. And she is very proud of her role in the Vermont law that required labeling of GMOs. Partridge is currently very interested in regenerative agriculture, which emphasizes soil health.

She sums her legacy up as participating in work that results in improving people’s lives.   “I love creative thinking, good processes and working together.”

Carolyn Partridge is just one of the many committed and knowledgeable State Representatives and Senators who are passionate about agriculture and rural affairs that you will meet at the 2017 Annual Conference in Connecticut August 13-18.

 The Extent of the 2016 Drought, and the Prognosis for 2017

(Note: This is the third and last in a series of articles relating to the dairy crisis.   See the CSG-ERC Agriculture and Rural Affairs blog for previous articles)

Last year was a difficult one for agriculture in the northeastern states. While prices for almost all commodities were at lows unseen in decades, the intense drought that hit many of the states proved even more challenging.

Since June of 2016, 169 of the 244 counties from the 11 northeastern states in the CSG-ERC Region were declared designated disaster areas by the USDA. According to the United States Drought Monitor (USDM), 51.2 percent of the Northeast was experiencing moderate to exceptional drought at the end of October, the highest percentage since 2002 in the 17-year USDM record.

For example, Worcester Massachusetts recorded only 23.44″ of rain through August of 2016, 10″ below the average for that period.

As a result of this drought, many farmers in the northeast were impacted financially – reduced product available for sale, need to buy in feed for farm animals due to stunted crops, increase in feed price due to lack of supply.

What Federal Assistance Is Available

The disaster designations trigger the availability of low-interest FSA EM loans to eligible producers in all primary and contiguous counties.

The Noninsured Crop Disaster Assistance Program (NAP), reauthorized by the 2014 Farm Bill and administered by the U.S. Department of Agriculture (USDA) Farm Service Agency (FSA), provides financial assistance to producers of noninsurable crops to protect against natural disasters that result in lower yields or crop losses

Statewide Efforts

Among the initiatives:

New Hampshire: The New Hampshire Senate and House Environment & Agriculture Committee have voted in favor of SB10, a drought relief bill to assist the state’s dairy farmers. The bill will be heard in the full House on March 23, and, if passed, will trigger a $2 million payment to the farmers hit hardest by the drought.

New York: It was anticipated that New York legislators will be putting assistance to the state’s dairy farmers into their budget.

Maine, Massachusetts, Connecticut and Vermont: These states currently have general dairy assistance programs in place. As a further step, Massachusetts launched a new Massachusetts Drought Emergency Loan Fund, allocating $2 million in micro-loans to family farms and other small business affected by the drought conditions.

Future Outlook

The seemingly heavy winter precipitation has replenished some watersheds, but groundwater levels remained near to below normal for a majority of the drought stricken area.

The USDM Release on January 26 indicated, after two months of winter, 41 percent of the Northeast was in a moderate, severe, or extreme drought, with another 20 percent being abnormally dry. January average stream flow ranged from much below normal to much above normal, with many areas near normal. Groundwater levels remained near to below normal for a majority of the drought-stricken areas. Reservoirs continue to increase slowly, but they remain below normal capacity.

According to a NOAA February 16, 2017 the drought forecast is ‘low’ confidence.

With the continuing low dairy price and the absence of an effective federal safety net program, should the drought continue through 2017, we will surely lose more of our already disappearing dairy farms. And our specialty crops and horticultural sectors will be severely tested as well.

Meet the Legislator – PA Senator Judy Schwank

This month’s featured CSG-ERC Agriculture and Rural Affairs legislator is Senator Judy Schwank of Pennsylvania.

Senator Schwank was first elected to the senate in 2011. The long-serving and well-loved senator from Judy’s district unexpectedly passed away, and the seat needed to be filled. Judy was on vacation with her husband when she got the call from the Party asking her to run. Judy says her husband often reminds her “You never said ‘no’.” He, of course, was concerned about the amount of time and energy this job would require. She would also be required to resign from the job that she loved – that of Dean of Agriculture and Environmental Sciences at Delaware Valley College.

So, knowing she would be out of a job if she lost the election, she signed up anyway. “I was very nervous,” she admitted, “but I had an incredible amount of help. Volunteers stepped forward to help.” And she gave her normal 110% to the campaign, doing everything she could, and then more. It paid off in the end, and she has been filling the large shoes of her predecessor ever since.

We asked Senator Schwank what the biggest issues are facing Pennsylvania agriculture today. “Pennsylvania is primarily a dairy state, and the biggest issue right now is that of dairy profitability.” She added, “Following that is the trade issue, especially with the uncertainty of the new administration, and the renegotiation of NAFTA, which is a big concern. Food processing is big business in my state, and the cost of food may rise as a result of the trade deals.”

When asked what the big non-agricultural issues are in the state, she immediately said, “The huge budget deficit. Our state has a $3.1 billion budget, and our deficit is $3 billion. The governor is committed to resolving this problem but it will mean some very difficult decisions of what to cut and who will suffer.” She added, “The Affordable Care Act is a big issue as well. In Pennsylvania, 700,000 people are on expanded Medicaid. This is an important resource for the treatment of opioid addiction, which is a public health epidemic in our state. Overdose deaths have more than doubled. If ACA funding is taken away, we will lose the ability to treat so many people in need.”

When we asked about the state of the Dairy industry in her state, Judy noted that it is very precarious because of the low prices the farmers are receiving. Some are selling off their herds. However, she understands there is going to be an uptick in the prices, which will help. It is a problem that needs attention at the federal government level as well. On the plus side, they’re seeing a lot of automation come online on dairy farms, and more and more young and beginner farmers are interested in getting into the business.

We asked Judy how she first got interested in agriculture. She said she has always been interested in horticulture, even from a very early age. “When most kids at 8 or 9 are reading comic books, I loved reading horticultural magazines. I would look at the pictures of the flowers and plants, and just dream of one day being a horticulturist.” So it was poppy seed packets, not paper dolls, for Judy! She added, “I even studied Latin starting at age 11, not because I wanted to speak it, but because I thought it would help me with the botanical names of the plants and flowers I loved.”

It was only natural, then, that she study at Pennsylvania State University, where she received her BS in Agricultural Education, and a Masters in Agricultural Education with a Horticulture minor. She went on to become an agriculture extension agent with the Cooperative Extension, where she worked on community development projects, including a developing a wholesale produce auction with Mennonite farmers to supply farmers markets in the state. Because of her work with the county commissioners as an extension agent, when a Commissioner’s seat opened up, she decided to run, and won.

We asked her, of the many jobs she has had in her career, which one was her favorite. “This one,” she said without hesitation. “I love being a state senator. I love being in a position where I don’t have to run for my life or run to support my family, but I run to do the best job I can for my constituents.” She adds, ‘I have found my voice as a senator, speaking out on issues.’ She said, ‘That is what I love the most, the public service aspect of the position. When someone pulls me aside and says, ‘Your staff just did an amazing job and helped me or my family members’, that makes me feel terrific.”

When we asked what Senator Schwank dislikes most, she answered, “I dislike it when people disparage politicians so often. I wish they knew how hard my colleagues work, and how serious they take the work that they do. I may not agree with them politically, but to a person my colleagues are very sincere and want to do the best job possible for their constituents.”

Judy is an active member of CSG-ERC, and we asked her why. ‘I am just so thankful that CSG-ERC exists. I come from academia, where we have in-service education and continuing education opportunities where our colleagues convene and meet to discuss common issues. CSG-ERC makes sure we legislators have the same kind of high educational opportunities. Networking is valuable. A number of the bills I have sponsored have come from the discussions at our annual meetings.”

Senator Judy Schwank is just one of the many great members of our Agricultural & Rural Affairs Policy Committee. Come and meet her, and all of us, this summer at the Annual Meeting in Uncasville, Connecticut, August 13 through 16

 

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Bob, Tara and Elsie

 

Understanding the Margin Protection Program (MPP)

You may have heard complaints from our dairy farmers about the Margin Protection Program (MPP), who say that the insurance program for dairy has been a failure. Let’s take a look at the program, what it was meant to do, and what the problems are.

To be sure, our dairy farmers have had their share of low milk prices, the up and down cyclical nature of prices that the farmers receive for their product, and the high cost of producing milk in the northeast. We covered this part of the story in our January blog (http://www.csg-erc.org/blog/2017/01/16/can-small-northeast-dairy-farms-saved/). And this year many in our region have been hit with unprecedented drought that has stunted the crops needed to feed the herds. On top of this, we have the highly touted new insurance program fail the farmers, which is adding salt to the wounds.

When we were preparing to tackle this blog, we both thought we understood the MPP. However, as we went to put pencil to paper (or fingers to keyboard), we found ourselves having a hard time explaining the program. So we did what we are good at – we set off to research the issue.   There were many explanations being bandied about, all of which were long, obtuse and leaving one scratching one’s head and saying, “Huh?” We need to thank a friend, Jay Phinizy, former USDA–FSA director in NH and Chair of the House Ag Committee, for his patience in making sure we understood the issue. We hope we are able to explain it more simply than most of the attempts we have read.

We will start with a little history. The MPP came about in the 2012 Farm Bill that was actually not finalized and signed into law until 2014. Many in the dairy industry had asked for an insurance program to replace the previous MILC safety net program. Congress wanted to eliminate Milk Income Loss Contract program (MILC), because it was viewed as a subsidy for dairy farmers. In fairness, many of the dairy producers also preferred to pay into a program meant to protect them from either low milk prices or high feed costs, rather than the MILC handout. The insurance program MPP became a reality in the last farm bill, and MILC was repealed. (There are other programs for dairy, but we will concentrate only on the MPP in this article)

So how does the insurance program work – or how should it work? The program on one side of the ledger takes the “all milk price” as the revenue for the program, and uses the Midwest feed price on the Chicago Mercantile Exchange as the expense side of the equation. The difference between the revenue and the expense is the ‘Margin’. As of this writing, those numbers are $17.05 per cwt (a cwt – or hundredweight – is 100 pounds of milk), $7.89 in feed costs to produce that 100 pounds of milk; resulting in a margin of $9.16. The margin is the important number.

The MPP provides insurance that protects the farmer against the Margin falling below a specific level. The farmer needs that Margin to be reasonably high, because they have plenty of other costs to cover, such as heat, electric, labor, taxes, and on and on. You can purchase MPP to protect that Margin from going below $8:00 (the top level) or from falling below $4.00 (the lowest level). You can buy protection in 50-cent increments anywhere between those numbers. The $4.00 is premium free, except for a $100 annual fee. Above that, premiums go up and are based on actuarial data.

Even if you bought the most coverage of protection at the of $8.00 Margin, you would receive no payments because the margin is $9.16. Should milk prices drop by more than a $1.16, feed prices rise by an equal amount, or some combination of the two, the coverage would kick in if you had bought in at the high margin level.

So what is the problem with MPP? There are several. The ‘all milk price’ is a national average price for milk, and the ‘feed price’ is the Midwest price on the Futures Market. Neither of those is reflective of our Northeast region. Milk prices vary in different regions of the country.   The feed cost vary from region to region. This government insurance program is a one-size-fits-all average, and does not vary by region. Therefore, it is not taking into consideration varying cost factors. The MPP also does not consider other cost issues, which also vary by region. We all know that it costs more to operate a dairy farm in New England than it does in Louisiana.

Another problem is that the margins are calculated in two-month increments. Let’s assume you bought in at the $8 margin level.   If the margin calculated for January is $7.50 and in February the margin went back up to $8.52, the two-month average is $8.01 and the farmer would receive nothing. However, if the margins were calculated one month at a time, the farmer would have had a payout for January but not February. Lastly the margins have been relatively steady (in the $9 to $10 range), so there have been very few payouts. Even though dairy prices are extremely low, the Midwest corn, soybean and other grain prices are low as well. As a result, the numbers we hear are that the program has collected $78 million in premiums and paid out $11.2 mil. (Using New Hampshire as an example, only nine of the 101 dairy farms in that state received an MPP payment).

It is clear that the system is not working for the dairy farmer in our region. Congress has just begun its negotiations on the next Farm Bill. We need to make sure the needs of our Northeastern Dairy Farmers are represented. We will be facilitating discussions for members of our region to develop specific wording for changes we seek to the existing MPP subchapter in the Farm Bill (Title 7-AGRICULTURE, CHAPTER \ 115-AGRICULTURAL COMMODITY POLICY AND PROGRAMS, SUBCHAPTER III-DAIRY Part A-Margin Protection).

 

Bob, Tara and Elsie

Can Small Northeast Dairy Farms Be Saved?

There is perhaps nothing more evocative of New England than dairy farms – old barns, contentedly grazing cows, and rolling green fields of corn and hay. However, that iconic vision is in danger of disappearing, to be replaced by mini-malls and subdivisions.

Since 2015, our local dairy farmers have been losing money – in effect paying to milk their cows.   The latest data from the USDA shows that the cost to produce milk in Maine per hundredweight is $25.15 (a hundredweight, or CWT, is 100 pounds, or 8.6 gallons of whole milk). The June 2016 price to the farmers was $16.39, or a loss of $8.70 per hundredweight. With the average herd size of 125 cows, and the average milk production per cow of 2,300 pounds, the total production of 287,500 pounds of milk will mean a loss of $25,012.50 per year.

In Vermont, the number of dairy farms has dropped from 1,200 five years ago to 800 now. In New Hampshire, the number of dairy farms have slipped from 137 ten years ago to the current 100 farms. Thirty years ago, there were more than 10,000 dairy farms in the northeast. Today there are fewer than 2,000.

This is the first in a series of three articles dealing with the dairy crisis. We’ll examine the causes of the crisis and look for solutions.

The Milk Price Roller Coaster

 When we entered the NH legislature in 2006, the state and the region were in the midst of a dairy crisis. At that time, the cost of production was just over $16 per CWT, but the farmer was getting only $11 per CWT for his milk. In 2007 and 2008 the prices rose to decent levels. Another fall in prices occurred in 2009, then back up to highs in 2015.   And now, the lows we are currently experiencing.

What is causing this extreme fluctuation? There are many factors, including the balance of international trade, the speculation in milk futures on the Chicago Mercantile Exchange, and the base price as set by the Federal Milk Marketing Order (or FMMO). Just what is the FMMO? For the past ten years we’ve been trying to get a handle on exactly what it is and who controls it, with no success. Here is a link http://future.aae.wisc.edu/publications/federal_orders.ppt to a Powerpoint presentation that explains the system. (Note:   The Powerpoint is 50 pages long)   No one understands it, and therefore no one knows how to fix it.

What we know is that the costs of production and inputs included in the FMMO formula are not sufficient to cover the real costs that our dairy farmers have to pay. One thing to keep in mind is that the FMMO price is a base price. Processors and retailers are able to pay whatever they would like over and above this base. The problem is they don’t.   The average retail price for a gallon of milk is $4.49. For that same gallon, the farmer receives $1.40, or 31%.

What can we do? One possibility is, working as a region, we can work with our congressional delegations to amend the Agricultural Marketing Agreement and change the FMMOs formulas to take into consideration the high input costs in the northeast.

Your state can also provide your farmers with a safety net of either cash infusions when the prices plummet, or tax credits and/or tax exemptions to allow them to weather the vagaries of federal dairy pricing. Massachusetts, Connecticut and Maine each have set up systems to assist their dairy farmers from these cyclical depressions.

Another way to help is to encourage diversification and innovation for your farms. Cheese and ice cream making, agritourism, timber harvesting, and maple sugaring help to augment the milk income and get farmers through downturns.

Our dairy farmers are a smart and pragmatic breed, used to planning for the bad times when the times are good. We can only hope that they continue to be the stewards of our land and open space.

The next installment of this series will deal with the Margin Protection Program, a newly-established safety net insurance plan that was meant to protect farmers when the price drops below a set level. Unfortunately, this did not work. We will investigate why, and what needs to be done to fix it.

Bob Haefner                                                                                 Tara Sad

Meet Senator ‘Mac’ Middleton

Meet State Senator Thomas McLain Middleton – ‘Mac’ to his friends. Since 1994, Mac has served the people of the 28th Senate District of Charles County (southeast of Washington, DC), and is now the last remaining full-time farmer in the Maryland legislature. He owns and operates 275-acre Cedar Hill Farm with his family, raising beef cattle and growing hay to feed not only his cows but the neighboring horses that make up the large Maryland equine industry.

As with most modern farms throughout the northeast, diversification and innovation are the keys to success, and Cedar Hill Farm is no exception. Mac’s daughter, Kelly, operates a thriving agritourism business on the farm, where cute barnyard animals charm the kids and their parents.   In addition, the farm has pick-your-own strawberries, a large corn maze, a pumpkin patch, and events like birthday parties and even weddings. (http://www.middletonfarm.com/)

Mac has a degree in Biology from Mount Saint Mary College and served his military obligation is the US Army Intelligence, which took him to both Italy and Germany. After his stint in the service, Mac was elected as a Charles County Commissioner. During this period he bought Cedar Hill Farm from his parents, and proceeded to raise tobacco, grains and strawberries. While the type of crops he grows has changed over the years, his love for the land has not. Mac has recently put the land into a conservation easement so that it will remain farmland in perpetuity.

Senator Middleton notes that the best farm preservation program is farm viability and profitability.   When asked what the biggest agriculture issues are in Maryland, Mac responds, ‘There are three right now.   First is low grain prices, second is the rules for Food Safety Modernization Act (FSMA), and third is some of the EPA regulations.’

We asked the Senator how CSG-ERC helps legislators. ‘I think the most important thing that CSG-ERC does is to enable legislators to discuss mutual concerns with other lawmakers from the region.’ He especially likes the tradition of taking the time at the annual conferences to ask each state for a brief update on what they are doing in agriculture and what the major issues they are dealing with.. ‘I always learn from his fellow legislators in other states that way,’ he adds.

The legislation Mac is most proud of in his 22 years in the Senate is the ‘Agriculture Certainty Program’ that he sponsored. This program allows farmers to set environmental goals, especially regarding the Chesapeake Bay. With those goals in place, that farm would then be exempt from new environmental regulation for ten years. He says, ‘This legislation enables farmers to have certainty that new regulations will not impact their ability to secure loans for new equipment and operations.’

We asked about the biggest changes in Maryland agriculture in the last twenty or thirty years, and Mac answered that it was the transition out of tobacco as the number one crop in the region.. ‘Much of the land that was tobacco fields has been replaced by greenhouse products – many Maryland farms raise plants that are sold at big box stores across the country.’

We asked Mac about changes in the legislature he has seen during his tenure. He noted how partisan it has become on both sides of the aisle. He also talked about the urban-rural divide in government. ‘We need to act as agriculture legislators. We need to educate our urban and suburban counterparts about the importance of rural issues and agriculture to the state economy, open space and our ability to produce locally grown food.’ He adds, ‘it is important for rural legislators to understand the urban issues and support what they need, in return for understanding and support coming back to the rural areas. We need to understand both sides of all issues and legislation, not just our own parochial views.’

Finally Mac is justifiably proud of his work on the Chesapeake Bay commission, where he has served for many years, and where he is serving his second term as the chair. When asked what he worries about, he says, ‘I’m concerned about where the next generation of farmer is coming from.’

Mac will be at the Annual CSG-ERC Annual Meeting at the Mohegan Sun Resort in Uncasville, Connecticut from August 13 through 17. We hope to see you all there as well.

Bob Tara and Cow

Bob Haefner and Tara Sad, Agricultural & Rural Affairs Policy