Senator Farley Announces $30 Million In Relief For Dairy Farmers

Hugh T. Farley

April 11, 2007

State Senator Hugh T. Farley (R,C - Schenectady) applauded the work of upstate Senators in obtaining financial relief for the State's dairy farmers.

Senator Farley's remarks coincided with a news conference held today at the Hourigan Dairy in Elbridge formally announcing the Dairy Investment Act, a $30 million program included in the 2007-08 State budget.

"Urban consumers, and the legislators who represent them, all too often believe that milk originates in a bottle in the dairy case at the supermarket," Senator Farley noted. "I'm proud of the work of the upstate Senate delegation in convincing our downstate colleagues to include in the budget this important financial relief for our hard-pressed dairy farmers."

Although neither the Governor nor the Assembly offered any aid to dairy farmers in their budget proposals, the Senate adopted a "one house" budget which included $60 million in aid. The $30 million provided in the final budget was a compromise.

The Dairy Investment Act will provide one-time direct support payments to the State's dairy farmers based on their milk production during 2006. That was a particularly difficult year for the industry, struggling against record increases in energy and feed costs, bad weather, and relatively low milk prices. The United States Department of Agriculture estimates that farmers affected by the June floods lost $40 million. Over 500 New York farms went out of business in 2006.

Agriculture is New York's largest industry, and dairy sales account for half of the State's total agricultural receipts. New York, which produces over 11 billion pounds of milk a year, is the nation's third largest dairy producing state. Other northeastern states, including Vermont, Connecticut, and Maine, have already offered dairy price relief programs.

The Dairy Investment Act will be administered by the State Department of Agriculture. Dairy farmers should receive payments within thirty days.

The text of the new law follows:

 31 ARTICLE 21-D  32 DAIRY ASSISTANCE PROGRAM  33 Section 258-oo. Legislative intent.  34 258-pp. Dairy assistance program.  35 § 258-oo. Legislative intent. The legislature hereby finds that this  36 state's dairy farmers continue to labor under a combination of extremely  37 low milk prices well below those of twenty-five years ago, along with  38 very high fuel, feed, energy, fertilizer and other operating costs.  39 These conditions have resulted in unprecedented losses for dairy farms.  40 The price of milk continues to be well below the cost of production.  41 Many of the vendors and service industries serving dairy farmers have  42 had to provide an increasing amount of credit to such farmers. This  43 article is enacted to assist the dairy farmers of this state and their  44 industry in a time of great need and to prevent further loss in the  45 dairy industry and its infrastructure which are critical to the state's  46 agricultural economy.  47 § 258-pp. Dairy assistance program. 1. A dairy assistance program is  48 hereby established within the department for the purposes of providing  49 payment to producers for milk produced during the two thousand six  50 calendar year. The dairy assistance program shall pay eligible producers  51 the difference between target prices to be established by the commis-  52 sioner and the combined announced Northeast Federal Order Statistical  53 Uniform Price plus the amount of the Milk Income Loss Contract X payment  54 rate on a per-hundredweight basis. Further, other factors may be used  1 by the commissioner in determining payment to producers for milk. Dairy  2 producers shall receive payment from the New York state urban develop-  3 ment corporation, after consultation with the commissioner, in the form  4 of a separate check based on pounds of milk produced during the two  5 thousand six calendar year. Such payment shall be made no later than  6 thirty days following the effective date of this article.  7 2. The commissioner shall request the United States Department of  8 Agriculture's Farm Service Agency to provide production data for produc-  9 ers and assist the department in administering the program. Production  10 data shall only be obtained from producers in this manner provided such  11 producer submit a form, prescribed by the commissioner, authorizing the  12 release of such data. Producers who do not participate in the Milk  13 Income Loss Contract X program shall submit to the department alterna-  14 tive means of verifying production data as prescribed by the commission-  15 er, including but not limited to milk marketing payment stubs, bulk tank  16 records, milk handler records and daily milk marketing records.  17 3. The following shall not be considered commercially marketed milk  18 and shall be ineligible for the dairy assistance program:  19 (a) dumped milk that causes bulk load contamination for which a  20 producer receives an insurance indemnity; and  21 (b) milk dumped on the farm by order of any state officer or employee.  22 4. All producers shall be reimbursed for up to four million eight  23 hundred thousand pounds of milk produced during the two thousand six  24 calendar year until such time as thirty million dollars in state funding  25 is expended pursuant to section sixteen-h of the New York State urban  26 development corporation act. The commissioner is hereby authorized to  27 promulgate any additional rules and regulations necessary to implement  28 the provisions of this article.  29 § 3. This act shall take effect immediately and shall expire and be 30 deemed repealed December 31, 2007.