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A
pastoral landscape is never complete without the
image of cows grazing in the fields. This holds
especially true for Maine where the dairy industry
has long been the traditional mainstay of southern
and central Maine agriculture. Statewide, there are
about 38,000 dairy cows, and the dairy industry
occupies approximately a third of Maine’s cropland.
Along with potatoes, milk is Maine’s leading
agriculture product, worth about $100 million a
year. Dairy farms employ more than 1,200 people full
time and hire many seasonal laborers. At least
another 1,200-1,500 jobs rely directly on Maine’s
dairy farms because dairy farms support a milk
processing industry and a farm infrastructure that
includes feed grain facilities, farm equipment
dealers, cattle dealers, milk haulers, supply
stores, and dozens of other businesses. As a result,
every dollar of dairy farm income in Maine creates
an additional $1.82 in output in other sectors of
the economy.
Over the past 25 years, there has been a decline in
the number of both dairy farms and cows and this
decline is continuing at a rapid pace. Statewide,
the number of farms has declined from 775 in 1986 to
fewer than 400 at present; in 2002 alone, there was
a 10% loss of farms. This is partially because
Maine’s dairy industry has suffered for many years
from increased production costs and depressed
pricing.
I recently requested a General Accountability Office
(GAO) report on the nation’s dairy industry. The
report, entitled “Dairy Industry: Information on
Milk Prices, Factors Affecting Prices, and Dairy
Policy Options,” provides many reasons for Congress
to take up legislation to help protect dairy farmers
from harmful price fluctuations. The GAO’s report
found a widening gulf between farmers’ and
distributors profits so I am concerned that dairy
farmers may not be reaping the benefits of their
hard work.
In order to help out dairy farmers
struggling with price volatility, Congress enacted
the Milk Income Loss Contract (MILC) program in
2002. The program authorizes additional federal
payments when farm milk prices fall below an
established target price and serves as an
alternative to regional dairy compacts and ad-hoc
emergency payments to dairy farmers. Under the MILC
program, dairy farmers nationwide are eligible for a
federal payment whenever the minimum monthly market
price falls below $16.94 per hundred pounds of milk
(about 12 gallons). Subsidies will cover 2.4 million
pounds of milk per farm which is equal to the milk
from about 125 cows.
The MILC program, which was set to expire in 2005,
was renewed until October of 2007 through the Budget
Reconciliation bill that passed last November. When
the Senate takes up consideration of the 2007 Farm
Bill, we will have to pass a continued extension of
the program. I believe that we must extend this
vital program in order to ensure a healthy dairy
industry in the future, and I
look forward to working with my Senate colleagues in
doing this in order to support our dairy farmers in
a fair and fiscally responsible way.
Along with reauthorizing the program, we must ensure
adequate funding and support for it. In the
President’s fiscal year (FY) 2007 budget, funding
for the MILC program was cut by 5 percent. Cuts to
funding could be potentially damaging to struggling
dairy farmers, and I am also worried that the budget
includes the imposition of a three cent fee
assessment on dairy farmers for every 100 pounds of
milk they produced. Such an assessment would place
an undue burden on producers and must not be
enacted.
Price volatility in the milk market and growing
production costs are making it increasingly
difficult for family dairy farmers to stay in
business. The dairy industry is a
vital part of our state’s economy, especially in
rural areas that depend heavily on agriculture and
its revenues, so dairy farm losses extend beyond the
farms to the entire industry. The MILC program
provides a vital safety net to farmers that allows
them to continue working through tough times.
I have long fought on behalf of New England’s dairy
farmers and I pledge to continue the fight to keep
this program as Congress moves forward and
reauthorizes the 2007 Farm bill.
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