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BILL AS PASSED HOUSE AND SENATE 2007-2008

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H.213

AN ACT RELATING TO INTERIM ASSISTANCE TO THE DAIRY INDUSTRY AND THE DEVELOPMENT OF LONG-TERM GOALS FOR A VIABLE AGRICULTURAL SECTOR

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  LONG-TERM GOALS

(a)  The general assembly should support programs and policies that foster the development of a diversified agricultural sector that:

(1)  offers farmers an opportunity to sell their products to a marketplace that pays them a reasonable rate of return for their labor and capital investments;

(2)  offers the public nutritious and safe foods;

(3)  produces, markets, and distributes agricultural products in a sustainable manner that conserves energy and the environment;

(4)  fosters on-farm renewable energy production and its infrastructure that maximizes energy conservation and efficiency and limits greenhouse gases;

(5)  enables business opportunities that ensure agriculture continues to be a vibrant sector of our Vermont economy that retains current farmers as well as attracts new and young farmers; and

(6)  provides economic stability to preserve the necessary infrastructure of the agricultural industry.

(b)  The general assembly also recognizes that this act provides only

short-term help for problems caused by ongoing severe structural problems in the industry.  Therefore, the general assembly also recognizes the need to work with the farmers, related industries, and citizens of Vermont to work collaboratively with all parties to support and develop a more robust and

self-sustaining agricultural sector.

Sec. 2.  CURRENT SITUATION

(a)  The general assembly finds that Vermont dairy farmers are currently laboring under the problems caused by the unfavorable weather of the last growing season, the high cost of production, and the low price paid for milk.  Many farms are short of feed, and the quality of the available feed is poor, resulting in lower production.  The prices of many farm supplies, particularly grain and feed, continue to rise.  The price of milk continues to be well below the cost of production.  The accounts receivable of many dealers and suppliers have grown beyond generally accepted financial standards.  The situation for much of the dairy industry is dire and the 2007 rate of attrition of Vermont dairy farmers is anticipated to be two to three times the normal rate. Furthermore, Congressional action on the $54 million federal disaster aid package is uncertain.  The general assembly, therefore, adopts this act in order to assist Vermont dairy farmers and their industry in a time of great need, and to help prevent further loss of the industry and its infrastructure which are critical to Vermont’s economy.

(b)  The Vermont agricultural credit corporation was established to assist Vermont farms and maintain their viability.  Currently there are 431 loans, totaling $31.5 million, of which over 90 percent are to dairy operators.  The current loan rate of 5.75 percent is scheduled to increase to 8.25 percent on April 1, 2007.  In view of the current situation, the general assembly finds it is necessary to keep interest rates as low as possible through the remainder of FY2007 and continuing through FY2008.

Sec. 3.  INTERIM DAIRY ASSISTANCE

(a)  The interim dairy assistance will pay the difference between target prices established by the secretary of the agency of agriculture, food and markets and the combined announced Federal Order Statistical Uniform Price for the Middlebury Location plus the amount of the MILCX payment rate on a per-hundredweight basis.  The payment will be paid in March of 2007, based on the amount of milk produced in the previous two months or on the seasonal herd formula pursuant to subsection (c) of this section, using the entire appropriation.

(b)  The agency of agriculture, food and markets will request the Farm Services Agency to provide the production data for dairy producers and assist the agency to administer the assistance.

(c)  Dairy producers will receive a single payment based on pounds of milk produced in January and February 2007 multiplied by the payment rate for the interim dairy assistance as calculated in this section on a per-hundredweight basis.  The payment will be made by the end of March 2007 based on January and February milk production and price data.  Farmers who do not take part in the MILCX program and who wish to receive this interim assistance shall provide the agency of agriculture, food and markets with the appropriate verifiable production evidence by the 12th day of March for the previous two months’ milk production.  Seasonal herds that have no production in the qualifying months would be paid on the monthly production average of the 12 months, including the payment period, as determined by the secretary. Acceptable forms of verifiable production evidence include:  milk marketing payment stubs, bulk tank records, milk handler records, and daily milk marketing records.

(d)  The payment will come as a separate check to dairy producers from the state of Vermont.

(e)  Determination made within the MILCX program on farm ownership will be used for interim dairy assistance.  The following is not considered commercially marketed milk and is ineligible for this assistance:

(1)  Dumped milk that causes bulk load contamination for which a producer receives an insurance indemnity;

(2)  Milk dumped on the farm by order of a state agriculture or health department official.

Sec. 4.  ASSISTANCE THROUGH A LOAN BUY-DOWN PROGRAM

The state of Vermont will buy down the interest rate of farm loans at the Vermont agricultural credit corporation for three additional months to continue the program for the entire fiscal year 2007.

Sec. 5.  APPROPRIATIONS

(a)  There is appropriated from the general fund in fiscal year 2007 the sum of $3 million to the department of finance and management for transfer to the agency of agriculture, food and markets to process payments for interim dairy assistance established in this act.

(b)  For the purpose of continuing to provide interest rate support for farm loans, the sum of $100,000.00 is appropriated from the general fund in fiscal year 2007 to the Vermont agricultural credit corporation.

(c)  The sum of $100,000.00 is appropriated from the general fund to the agency of agriculture, food and markets for emergency funding for farm capital needs resulting from the February 2007 blizzard.  The funds shall be used according to a plan determined by the secretary of the agency of agriculture, food and markets, and whatever funds are not necessary for the blizzard emergency shall go to the Vermont agricultural credit corporation for the purpose of the interest support program pursuant to subsection (b) of this section.

Sec. 6.  FUNDING OFFSETS

The administration and the legislature have agreed to:

(1)  Recognize and directly apply to the general fund $600,000.00 from the consumer protection fund in fiscal year 2007.

(2)  Remove or reduce the following appropriations from the governor’s budget proposal for fiscal year 2008:

(A)  $700,000.00 for judicial case management system;

(B)  Reduce from $400,000.00 to $150,000.00 Regional Marketing Organizations; and

(C)  Reduce debt service cost by $100,000.00.

(3)  Recognize vendor incentive payments of $500,000.00 to the general fund in fiscal year 2007.

(4)  Reduce LIHEAP from $990,000.00 to $590,000.00 in the governor’s budget adjustment proposal for fiscal year 2007.

(5)  Recognize and directly apply to the general fund increases from the captive insurance fund at the department of banking, insurance, securities, and health care administration:

(A)  $360,000.00 in fiscal year 2007; and

(B)  $290,000.00 in fiscal year 2008.


Sec. 7.  FINAL PAYMENT

It is the intent of the general assembly that the payment provided by this act is the final dairy assistance program payment for the 2007-2008 biennium.

Sec. 8.  EFFECTIVE DATE

This act shall take effect on passage.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us