Legislators grapple with dairy payouts

By Sharon Kiley Mack, BDN Staff
Posted Jan. 10, 2010, at 10:09 p.m.

AUGUSTA, Maine— Legislators debated the payments to the state’s unique Dairy Stabilization Program for nearly the entire day Friday.

The program provides subsidies to Maine dairy farmers when the price of milk falls.

Rep. Jeff McCabe, D-Skowhegan, a member of the Agriculture, Forestry and Conservation Committee, said the committee struggled with making across-the-board percentage cuts to farmers’ payments in a cash-strapped year.

“The reality is that all farms are struggling, not just one size farm,” McCabe said Sunday. “We are hearing from equipment folks, grain dealers.”

The program, which is managed but not funded by the state, was established in 2004 and operates with a tiered system depending on the size of an individual farm. Payments kick in when milk drops below the cost of production, set for average-size Maine farms at $20.70 per hundredweight.

To date, the program has paid out more than $24 million to dairy farms from fees paid by processors. When dairy prices hit crisis levels last year, the program ran out of money in September.

Legislators this year are grappling with decreased funding and how to allocate it fairly.

“The [Agriculture] Committee appears to be split in their thinking [about the cuts] right now,” McCabe said in response to questions about Friday’s session.

A workshop on the program is set for Wednesday.

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http://bangordailynews.com/2010/01/10/business/legislators-grapple-with-dairy-payouts/ printed on October 24, 2014