Governor M. Jodi Rell today announced she has signed a bill that would help save the state’s $1 billion dairy industry and preserve valuable farmland by providing direct aid for the next two years to farmers struggling with historically low milk prices and high production costs.
“Dairy farms are an irreplaceable part of our landscape and our culture and keeping family farms viable ensures that we retain the ability to produce fresh, local food. We cannot afford to lose them. Once they disappear so do the countless businesses and thousands of jobs the dairy industry supports,” Governor Rell said.
Under the new law, money for the aid will be generated by revenues raised from a $40 fee for recording municipal land documents.
“In this down economy, our dairy farmers had no safety net and were essentially in freefall. I commend the leadership of the General Assembly for their strong endorsement of this bill. The legislation had broad bipartisan support, a testament to the importance and urgency for finding a solution, much sooner rather than later,” Governor Rell said.
Connecticut currently has 151 dairy farms that use over 83,000 acres in cropland, of which 30,000 acres of that in preserved farmland. That is down from 500 farms in 1990 and 210 in 2007. During the first quarter of 2009, state dairy farmers received approximately $1.07 a gallon of milk produced, compared to $1.42 a gallon in 1998, a drop in price of nearly 25 percent.
According to the state Department of Agriculture, which will administer the quarterly payment program, Connecticut dairy farmers lose about $1 for every gallon of milk they produce. The amount of the payment would be based on how much milk each farm produces and the costs to produce it, such as feed, equipment, fertilizer and fuel. The state payment is intended to help the dairy farmer absorb some of the financial losses.
The first state aid check is expected to be issued in October. The state Agriculture Department is sending information packets to all dairy farms explaining the process and the payment schedule. State agriculture officials expect that all dairy farmers in the state will receive a payment. The program will sunset on July 1, 2011.
The legislation, Senate Bill 891, changes the grant formula for the Community Investment Account (CIA), which is funded by the recording fee. Under the former grant structure, the money was divided in four equal portions or 25 percent each to the Connecticut Commission on Culture & Tourism (CCT) for heritage preservation, the Connecticut Housing Finance Authority (CHFA) for affordable housing, the Department of Environmental Protection (DEP) for municipal open space and the Department of Agriculture for agriculture viability grants and farmland preservation.
The new law allots 20 percent each to the CCT, CHFA and DEP and will use the remaining 40 percent for quarterly payments to dairy farmers to help them stay in business.
“The State of Connecticut is doing all we can for our dairy farmers, but real, lasting change is urgently needed at the federal level where prices are set,” Governor Rell said. “I have directed Commissioner of Agriculture to work with our neighboring states in the Northeast to help bring about that reform.”
According to a 2009 University of Connecticut economic analysis, the state dairy industry generates:
- As much as $1.1 billion in sales
- Approximately 4,200 jobs
- $145 million to $208 million in personal income
Related industries include feed suppliers, fertilizer and seed suppliers, veterinary services, equipment manufacturers and distributors, processing equipment, packing materials refrigeration, transportation and energy.
In 2008, Connecticut dairy farmers produced 351 million pounds of milk, of which 40 percent was consumed in the state.
For more information on the state’s dairy industry: www.ct.gov/doag