January 22, 2009
US state Maine faces possible slash in milk subsidies
State legislators on the Agriculture, Forestry and Conservation Committee have recommended slashing price supports to Maine's dairy farmers by US$4.8 million.
This follows the forecast of crashing milk prices, which by March, are expected to be nearly half of what farmers received a year ago.
Farmers' prices per hundredweight of milk for last June was US$19.56, but is expected to fall to US$11.54 by March 2009. In comparison, a study by the University of Maine states that Maine's milk production cost, excluding profit, is US$24.50 per hundredweight.
The US$4.8 million represents about 37 percent of what is expected to fund the milk subsidy programme in fiscal year 2009-2010.
However, the state is facing an overall deficit of more than US$800 million in the next two-year budget cycle that starts July 1, and the cut will help close the budget gap.
The committee discussed percentage cuts in the subsidy programme ranging from 17-40 percent to each farmer. With subsidies tied to how much milk a dairy farm produces, a cap on how much milk would be subsidised was also discussed.
The legislator panel also recommended adding a cap of 7 million pounds of milk being eligible for subsidies. Any milk that a farmer produced beyond 7 million pounds would not be subsidised.
