Commentary: The Future of Agricultural Report

Earlier this month the Scott Administration released the Report of the Governor’s Commission on the Future of Agriculture. The Report is well-written and constructive, but for many people seriously concerned with this subject, it is likely to be a disappointment.

The 33-page Report purports to chart a path forward to cope with today’s crucial challenges and opportunities. It does a good job explaining that “agriculture is a principal engine for Vermont’s rural economy”, and that our farming sector – especially its largest component, dairy farming – is essential to preserving Vermont’s scenery and indeed its iconic character. Point taken.

At the onset it notes, correctly, that Vermont’s dairy sector is under threat from a confluence of factors mostly outside the state’s control. A footnote explains that these include a long-term decline in conventional milk prices due to production efficiencies and evolving consumer preferences, a rigid (that is, insufficient) USDA pricing regime, a national market with returns to scale that favor larger farms from other regions of the country, and decisions from regional producers to consolidate their supply chains.

Given all that, the Report assembles a long list of coping strategies, which together promise a “robust commitment to investing in appropriate projects and policies”. These include, for example, Payments for Ecosystem Services, Farm Enterprise Ownership Purchasing Assistance, a Farm and Forest Viability Project, the Working Lands Enterprise Fund, a streamlined regulatory process, and so on – so many that the Report recommends funding a skilled “navigator” to help farmers get everything they qualify for.  

These new initiatives to produce a healthy, diverse, and resilient agricultural ecosystem will require $31 million in early grant funds, plus $59 million more over five years, to supply a long list of services to dairy farmers. From where? That awkward question is not recognized.

This is not to suggest that all these proposed programs are worthless. Far from it. A renewed Strategic Brand Initiative to promote premium prices for Vermont-made products should be well worth the requested  $250,000 expenditure. Strengthening the Current Use program to protect operating farms from development-driven property tax burdens is well worth doing. But the great bulk of the spending – often described as “investment” – is built on the model of the concerned government doing all sorts of things to keep an economically imperiled sector of the economy afloat.

Here are four reasons why this report is something of a disappointment to me.

Nowhere does the report take cognizance of a multitude of Federal programs to boost the agriculture sector and its associated rural economy. The venerable UVM Extension Service and the Farm Service Administration, Yankee Farm Credit and Vermont Agricultural Credit Corporation are not mentioned.

America’s dairy sector is producing more milk than America’s consumers want. Last year’s 2.654 billion pounds is, despite population growth, the same as national milk production in 2012, and ten percent below the record high level in 2017. Even after federal government efforts to buy up surplus milk to sustain higher prices, the price many farmers get in many years is below their cost of production. 

Big well-capitalized dairies enjoy efficiencies that keep them in the black, but small and medium dairy farms are often hanging on at the margin, or kept afloat by family off-farm employment. The Report avoids any critique of the prevailing industrial dairy business model – large freestall barns, heavy equipment, 20,000+ pounds a year of production from hard driven cows , reliance on migrant labor, and purchased feed and fertilizer. The alternative of low-input grass-based New Zealand style dairy farming, with its notably lower cost of production, is not mentioned, let alone recommended.

And then there’s the billion dollar problem for which Vermont is under the gun of the Federal EPA: phosphorus from fertilized fields running into the lakes – notably Lake Champlain. Dairy farming is not the only source of the phosphorus, but it’s the largest.  

It’s not as if state government isn’t working to ameliorate this problem. The Agency of Agriculture Food and Markets and the Agency of Natural Resources are working together to find a solution. The choices are: stop applying fertilizer, dredge the alluvial fans and treat the Lake to neutralize the phosphorus, or extract the phosphorus from the cycle and ship it out of the watershed to phosphorus-deficient places that need it, or as dewatered manure fuel logs. But no discussion of this crucial problem appears in the Report. The word “pollution” appears only in a list of concerns on Page 2.

The Report is well intended, but it stops short of explaining how the proliferating assortment of proposed new state programs will solve the dairy sector’s current and impending problems, and convincingly justifying the expenditure of millions of tax dollars.

- John McClaughry is vice president of the Ethan Allen Institute


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Enter Comment Here:

  • John McClaughry
    commented 2022-03-02 15:51:07 -0500
    Thanks, Christian, for your kind words. I was aware of the Auditor’s report but didn’t cite it. Maybe I should have.
  • Christian M
    commented 2022-03-02 11:23:35 -0500
    Well written John.

    Another good read is the state Auditor’s report: Examining Vermont State Spending on the Dairy
    Industry from 2010 to 2019:

    “From State fiscal year (FY) 2010 to 2019, we estimate that Vermont spent more than $285 million on
    programs and policies that support the dairy industry and/or address detrimental environmental
    impacts of dairy farming. In FY19, the most recent year of our analysis, spending totaled $35 million”

  • David Flemming
    published this page in EAI Commentary 2022-02-25 16:10:58 -0500