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BILL AS PASSED HOUSE AND SENATE 2007-2008

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S.78

AN ACT RELATING TO the Vermont milk commission establishing an over‑order premium and a minimum producer price

Sec. 1.  FINDINGS

The general assembly finds:

(1)  Dairy farmers contribute $1 million a day to the economy of Vermont, provide about 7,500 farm jobs, account for $426 million annually in sales for Vermont businesses that interact with dairy farmers, and support businesses, including veterinarians, grain dealers, equipment sales, farm insurance, and other dairy suppliers.

(2)  In January of 2007, there were 1,137 dairy farms with 142,000 milking cows, generating over $2 billion annually in Vermont’s economy through production, employment, and business interaction.

(3)  Vermont’s conventional dairy farmers have lost purchasing power in recent decades because the farm gate price paid for their milk has not kept pace with inflation.  In 1980, the average price paid was $13.06, which, when adjusted for inflation, is equivalent to $30.95 in 2006 dollars.  The average price for milk in 2006 was $12.88.

(4)  Many farmers continue to receive a price for their milk that is below the cost of production.

(5)  Milk and milk products are used as ingredients in thousands of foods, including baked goods, snack food, baby formula, and pet food.  Milk products are used in sit‑down and fast food restaurants.  Dairy products are featured in a large proportion of the space in supermarkets.

(6)  6 V.S.A. § 2676 states that the ownership of milk passes from the farmer to the buyer when the milk is transferred from a farm tank to a tank truck.

(7)  Stop and hauling charges currently paid by Vermont dairy farmers result in a decrease of approximately $0.60 per hundredweight for fluid milk picked up at the farm.

Sec. 2.  PURPOSE

The purpose of this act is:

(1)  to enable Vermont dairy farmers, processors, and retailers and their supporting infrastructure to achieve a positive return on their labor and investment; 

(2)  to ensure the continuing economic vitality of the dairy industry by stabilizing the price received by farmers for their milk at a level allowing them an equitable rate of return;

(3)  to assure that the cost of hauling and handling milk is not charged to or paid by the producer.


Sec. 3.  VERMONT MILK COMMISSION ESTABLISHING AN
 OVER‑ORDER PREMIUM

(a)  The Vermont milk commission shall establish by rule, pursuant to its authority under chapter 161 of Title 6, an over‑order premium on Class I fluid cows’ milk, consistent with accepted pricing mechanisms at the farm gate.

(b)  In establishing the over‑order premium, the commission shall investigate, ascertain, and include in establishing such premium the reasonable costs and charges for producing, hauling and stop charges, handling, processing, and any other services performed in respect to fluid dairy products.

Sec. 4.  VERMONT MILK COMMISSION ESTABLISHMENT OF A
 MINIMUM PRODUCER PRICE

The Vermont milk commission shall establish by rule pursuant to its authority under chapter 161 of Title 6 a minimum producer price that is designed to achieve a price by which the cost of picking up the milk and hauling the milk from the farm to the purchaser will be paid by the purchaser.  Notwithstanding 6 V.S.A. § 2925(d), hauling and stop charges of milk loaded at the farm shall not be charged back to the selling dairy farmer.  No additional charges shall be made, and no costs may be shifted from other benefits the farmer receives to contravene the purpose of this act.  Nor shall any funds be transferred away from the farmer in paid producer differentials or any premiums the farmer would receive, but for this act.

Sec. 5.  6 V.S.A. § 2937 is added to read:

§ 2937.  ANNUAL REPORT

The commission shall report annually on its activities to the house and senate committees on agriculture on or before January 15, beginning in 2009.

Sec. 6.  EFFECTIVE DATE; RULES

(a)  This act shall take effect on passage.

(b)  The milk commission shall commence the rulemaking process necessary to implement the provisions of Sec. 3 of this act within 60 days of the effective date.  Each of the rules required shall take effect only if, by rule or legislation, New York and Pennsylvania have enacted substantially comparable provisions for their dairy farmers.

(c)  The milk commission shall commence the rulemaking process necessary to implement the provisions of Sec. 4 of this act within 60 days of the effective date of this act.  The rule shall take effect when, by rule, legislation, or other agreement, New York and one other state in the Northeast Marketing Area, Federal Order 1, have accomplished the purpose of this act or on January 15, 2009, whichever comes first.

(d)  The milk commission shall report the progress being made on implementing this act to the house and senate committees on agriculture on or before November 1, 2007.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us