Governor Rell Unveils New Program to Help Dairy Farmers Lower Costs and Save Jobs
Date: July 7, 2006
Governor M. Jodi Rell today announced a new program to provide direct financial aid to Connecticut’s struggling dairy farmers.
The Dairy Farm Reinforcement Program is designed to help the industry reverse recent financial losses by providing grants, loans and access to credit to offset costs incurred due to federal price controls and high energy costs.
“Connecticut’s dairy farmers provide so much to our state, from the milk we drink to the $100 million the industry contributes to the state’s economy to the pastoral landscape we all enjoy,” Governor Rell said. “Now is the time to lend farmers a helping hand.”
Governor Rell noted that the dairy industry in Connecticut has declined from 367 farms and eight milk processing plants in 1990 to 165 farms and five milk processing plants today.
“Dairy farming is a heavily regulated industry that is currently experiencing severe financial hardships,” Governor Rell said. “Federal dairy subsidies are down, while energy costs are up, leading to a real cash crunch for farmers.”
The dairy industry employs 2,200 people in Connecticut and produces approximately 50 to 60 percent of the milk consumed in the state.
“Connecticut has a long and proud history of dairy farming and we must do all that we can to preserve and protect this heritage. We must do everything in our power to help the industry retain and grow jobs, stay competitive and stay healthy over the long term. After talking with farmers and state agriculture officials, I am proposing a new Dairy Farm Reinforcement Program.”
The Governor’s Dairy Farm Reinforcement Program is made up of the following components:
- Grants –The Department of Agriculture will oversee a $2 million fund that will provide one-time support payment to eligible dairy farmers to offset market cost inequities that result from the federally regulated milk price. The grant will be based on each farm’s production during the first six months of 2006.
- Low Interest Loans – The Department of Economic and Community Development will provide $2 million in low-interest loans for energy conservation, machinery and equipment, and farm diversification.
- Loan Guarantees - The Connecticut Development Authority is offering $2 million in loan guarantees to lenders enabling them to provide $7 million to $10 million in financing to dairy farmers in need.
- Energy Conservation Through the Connecticut Energy Efficiency Fund (CEEF), Connecticut Light and Power will offer technical assistance and to qualified farms, financial incentives to assist dairy farmers implement energy efficiency and control their consumption. In addition, the municipal electric utilities, through the Connecticut Municipal Electric Energy Cooperative (CMEEC), will offer evaluations for dairy farmers to identify energy saving opportunities.
- Legislation – Governor Rell has directed the state’s Milk Regulation Board to develop and propose legislation to be introduced during the next legislative session that will provide for the long-term viability of Connecticut’s dairy farmers.
The current estimated cost for producing a gallon of milk in Connecticut is approximately $1.60. Today’s federally set price for milk provides producers with approximately $1.10 per gallon, which means that farmers are losing 50 cents per gallon.
“To see the immediate need here, you just have to do the math,” Governor Rell said. “The price at which our farmers are paid for the milk they produce is fixed at the federal level. The current federally fixed price of milk per gallon is significantly lower than the cost of producing that milk in Connecticut.
“The bottom line is that our state dairy farmers are being required to sell every gallon of milk they produce at a significant loss—with little or no relief in sight. Well, I am pleased to say today that relief is on the way.”
