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Thursday, August 18, 2016

Ag Committees Hear Concerns of PA Dairy Industry, Causer Says

More than a dozen members of the House and Senate Agriculture and Rural Affairs committees heard from dairy farmers and ag industry experts during an informational meeting at Penn State’s Ag Progress Days.
PENNSYLANIA FURNACE – Environmental and permitting hurdles are among the greatest challenges facing the future of Pennsylvania’s dairy industry, lawmakers were told Wednesday at a joint meeting of the House and Senate Agriculture and Rural Affairs committees at Penn State’s Ag Progress Days in Centre County.

Rep. Martin Causer (R-Turtlepoint), chair of the House Ag Committee, said the information presented at the meeting will help lawmakers work on policies to support and enhance the dairy industry, which represents the largest sector of the state’s agriculture industry overall.

“Dairy farms, dairy processors and other related industries represent thousands of jobs and billions of dollars for our state’s economy,” Causer said. “But our dairy industry is struggling and growing at a slower rate than that of other top dairy-producing states. In fact, Pennsylvania was just bumped out of its spot as the fifth highest dairy-producing state in the nation.

“While there are a number of factors influencing this downturn that we cannot control, such as dry weather and changing markets and consumer demands, we heard about a number of things we can do to help, including developing more reasonable environmental policies and proactive economic initiatives to encourage growth and expansion here in the Commonwealth,” he added.

Several speakers at the meeting pointed to the high cost and long duration of the state’s permitting processes as a major hindrance to the expansion of dairy operations. There is concern the problem could get worse instead of better as the state works to comply with federal Environmental Protection Agency (EPA) standards for cleaning up the Chesapeake Bay Watershed.

Justin Risser, a dairy farmer and president of the Professional Dairy Managers of Pennsylvania, said the current permitting process puts the state’s dairy farmers at a competitive disadvantage with other high producing states like New York, Michigan and Wisconsin. But he also pointed to the need for more processing opportunities in the Commonwealth and encouraged lawmakers to adopt an aggressive economic development policy to achieve that goal.

Another significant topic of discussion during the meeting was House Bill 1265, sponsored by Rep. John Lawrence (R-Chester County). The bill, which passed the House in December 2015 in a 102-94 vote, would require any payment made to a dairy farmer to clearly delineate the dollar amount of the total that consists of money collected from the state-mandated over order premium. The over order premium was established in 1988 to support Pennsylvania dairy farmers and help protect them from fluctuations in the national and global markets. The premium is included in the price of milk paid by Pennsylvania consumers.

Under current law, payment and full disclosure of the state-mandated milk premium are required when a “milk dealer” makes a payment to a “producer.” However, the law views cooperatives and their members together as a single “producer,” so there is currently no statutory requirement for cooperatives to delineate payment of the over order premium to their members. At least one cooperative has acknowledged the premiums go into a pool used to pay all of the cooperative’s members, including those who live out of state.

Those addressing the committee on Wednesday were mostly supportive of the bill’s goal to ensure transparency for milk producers, including the state Department of Agriculture.

House Bill 1265 is now pending consideration in the Senate Agriculture and Rural Affairs Committee.

The committee members also heard testimony from Dr. Charles Nicholson, clinical associate professor, Penn State Smeal College of Business; Rick Ebert, president, Pennsylvania Farm Bureau; Christian Herr, executive vice president, PennAg Industries; Tom Wegner, director of governance and leader development, Land O’Lakes; Kirk Sattazahn, director of marketing, Select Sire Power, and board member, Professional Dairy Managers of PA; and Rob Barley, dairy farmer, Star Rock Farms, Lancaster County.

Video of the entire hearing will be available at www.RepCauser.com.

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