July 23, 2024

 

Pennsylvania, US bill introduced to permit collection and distribution of dairy premium

 

Senators in Pennsylvania, the United States, have introduced a long-awaited bill to allow the state to directly collect and distribute a dairy premium.

 

Senators Elder Vogel and Judy Schwank produced the bill on July 17 after more than a year of stakeholder negotiations. Under the bill, the Pennsylvania Milk Board would be empowered to coordinate the collection and distribution of the premium with the Department of Revenue.

 

Pennsylvania would distribute the money to farmers, milk dealers or handlers in a manner that accounts for the cost of production, price received, and a return on equity.

 

The House and Senate ag committees would have the power to disapprove the board's orders setting the premium.

 

The premium funding would also be subject to audit. Rep. John Lawrence argued that the current system — in which processors distribute the money to farmers on their milk checks — lacks accountability.

 

Additionally, the bill would formally establish the over-order premium in statute. The premium was created in 1988 and has been maintained since then by Milk Board regulations.

 

The bill was assigned to the Senate Agriculture and Rural Affairs Committee, which Vogel and Schwank lead.

 

The senators announced vague plans for the bill in November, about seven months after holding a hearing on the subject.

 

The over-order premium is paid to dairy farmers and cooperatives on Pennsylvania-produced milk that is used for fluid products and stays in the state for processing and retail sale.

 

The current premium is US$1 per hundredweight plus a fuel adjuster. The board sets the premium through periodic hearings in which it receives testimony from industry groups.

 

Farmers have long complained that the premium treats co-op members and independent farms differently, and gives companies an incentive to move milk across state lines.

 

Pennsylvania Farm Bureau started a renewed push for reform in 2021.

 

Ag Secretary Russell Redding has supported the effort, though the Milk Board is separate from the Ag Department.

 

The premium has been difficult to change due to stakeholders' competing priorities and the risk of transgressing federal interstate commerce law.

- Lancaster Farming