November 20, 2009

Gillibrand Urges USDA To Immediately Distribute Emergency Assistance To Dairy Farmers In A Way That Helps Small, Family Farms In NY

Senator Encourages the Purchase of Cheese to Maximize Payments to Farmers

Washington, DC - Today U.S. Senator Kirsten Gillibrand, the first New York Senator to serve on the Agriculture Committee in nearly 40 years, urged the U.S. Department of Agriculture (USDA) to act quickly to distribute emergency assistance funds to dairy farmers based on a formula she has proposed, which would provide more funding to family farms like those in New York.  This fall, Senator Gillibrand helped secure $350 million for the USDA to help New York farmers struggling during the dairy crisis in the final Agriculture Appropriations Bill. The agreement includes $60 million in cheese and dairy product purchases for food banks and other nutrition and feeding programs, and $290 million in direct support to dairy farmers using guidelines to be determined by the Secretary of Agriculture.

Today, Senator Gillibrand again urged the USDA to use the Milk Income Loss Contract (MILC) program to distribute the direct payments and purchase cheese for price support to help keep dairy farmers solvent during this current crisis.  Specifically, Senator Gillibrand urged the USDA to use her bill, S. 1330, as a model to distribute payments by increasing the percentage of payments between the market price and $16.94.

In her letter to USDA Secretary Tom Vilsack, Senator Gillibrand wrote, "I am writing to you about the grave situation that family-owned dairy farms in New York are facing. With milk prices disturbingly low, farmers are waking up every morning to milk their cows and see their equity vanish into thin air. Last month, Congress provided the USDA with $350 million dollars in order to help bring some measure of relief to our dairy farmers. I am writing to ask that you disperse these funds with all due haste. Every day we wait means more dairy farms will go under... My colleagues and I will continue to work to develop long-term solutions to the unpredictable dairy industry, but once again I must stress the urgency of immediate action. Farmers are currently operating in an unsustainable environment. I fear a delay in getting this badly needed funding out the door would result in hundreds more of New York's farms closing their doors forever."

In June, Senator Gillibrand introduced legislation that would index the MILC rate of $16.94 to inflation. The MILC program payments were originally designed to help dairy farmers in their time of need, but have remained stagnant. The price floor of $16.94 per hundredweight has not changed since the 1990's, yet the cost of production has increased exponentially.

In her letter, Senator Gillibrand cited that in the North Country alone, 15 dairy farms closed, leaving many without jobs. She argued that we are losing the economic driver for many of our rural communities and a cultural heritage that we may never again regain.

Senator Gillibrand urged the USDA to utilize the MILC program, since the infrastructure for the program is already in place. Using an existing program will ensure that MILC checks that farmers received were able to provide real help in a time of crisis.

In regard to the support price, Senator Gillibrand urged the USDA to use a portion of the funds to purchase cheese. This would lead to a quick boost for farm milk prices today, and help farmers in the coming months stabilize their farms.

Senator Gillibrand is giving a strong new voice and a real seat at the table for New York's dairy farmers and agricultural communities struggling in these tough economic times.

In July, after meeting with Senator Gillibrand, the USDA announced immediate action to support struggling dairy farmers by increasing the amount paid for dairy products through the Dairy Product Support Program (DPPSP). The increase went into effect in August and will continue through the end of October.  The increase is expected to generate an additional $243 million in revenue for dairy farmers.

In August, Senator Gillibrand held a field hearing in Batavia, New York that focused on identifying major problems with the current dairy pricing system and determining effective solutions moving forward.  Just last month, Senator Gillibrand chaired an Agriculture Committee Hearing on dairy pricing in Washington, D.C. which explored the various proposals currently being presented as a response to historically low dairy prices. On October 30, Senator Gillibrand met with North Country dairy farmers to discuss short-term and long-term fixes to the dairy pricing system. Senator Gillibrand is working with stakeholders and economists to develop a proposal before the next Farm Bill is written in 2012 that will mitigate the boom and bust cycle that dominates the American dairy industry.