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New ideas needed to boost farm revenue

August 17, 2003|by BOB MAGINNIS

The Washington County government has tried to protect local farmland by buying preservation easements and changing the comprehensive plan to require larger lots in agriculturally zoned areas. But what hasn't happened is a full-blown effort to help farmers increase their income.

Goodness knows they need it. Last week I wrote about a Downsville Pike farm family that is getting just about the same milk prices they got 10 years ago, even as their costs continue to rise. As Mike Forsythe told me, there's only so much belt-tightening you can do. And if dairy farming is hurting, farming in general is in trouble because dairy farms account for 75 percent of all local agricultural income.

Some farmers are better at cost-cutting than others, according to Don Schwartz, the Washington County extension agent for agriculture. Schwartz, who stayed in agriculture despite a school counselor's advice to the contrary, told me that in today's economy, traditional methods just aren't good enough.

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"The single most important factor on a farm is the ability to change. If we have a farmer bound and determined to do it the way his daddy did, his time on the farm will be limited," Schwartz said.

Increasing efficiency is a must, Schwartz said, because just as the mom-and-pop corner groceries have been squeezed by the big chains, the smaller dairy farms of the East Coast are being seriously challenged by the those in other parts of the country where land is cheaper and herds are much larger.

With a milk price of $11 per hundredweight, supplemented by a $2 per hundredweight subsidy from the 2002 federal farm bill, the economies of scale are tough to beat, but some local farmers do it, Schwartz said.

"We have some very accomplished grazers here who can make milk for $6 a hundredweight," he said.

In some cases, he said, they do it by specialization, allowing someone else to raise their heifers, pump out their manure pits and harvest and store their feed.

Another factor in some farms' success is having one member of the family, usually the wife, work off the farm in a job where she can get health insurance most farmers can't afford on their own, Schwartz said.

The 2002 farm bill, which provides some subsidies, does help, Schwartz said, adding that Congress passed it because members recognized the need to preserve secure sources of food within the U.S.

But on the other hand, Schwartz said, the Northeast Dairy Compact, which set milk prices for six months at a time, was allowed to expire at the same time the federal government was cutting its purchases of dairy products.

So what's the alternative? Additional subsidies are probably not going to win much political support, at least until there are far fewer farms than at present and elected officials begin worrying about the security of imported foodstuffs.

A March 2002 report by the Cato Institute looked at New Zealand, which phased out all farm price supports in 1984, giving those who wanted to quit farming an "exit grant."

Those who did stay on the land adapted by cutting costs, diversifying land use and altering production to meet the needs of the market.

But the article didn't address a key point - the availability of development opportunities for those who decided to leave farming. Pushed to the wall, financially speaking, many Washington County farmers will take the development alternative.

Another possibility that cuts out the middleman is for a farmer or group of farmers to build their own milk-processing plant and market directly to supermarkets and the public. Schwartz noted that two local operations - the South Mountain Dairy and the Trickling Spring Creamery - have already gone that route.

When I suggested that a local dairy might couple a processing operation with a Knott's Berry Farm-style country store, Schwartz said that such an establishment might also sell locally grown fruit and produce.

Another possibility to supplement income: Sharing the farm with city-dwellers by renting out rooms in a bed-and-breakfast type operation that would allow metro-area folks to experience farm life up close. The Washington Post looked at this phenomenon recently and found city slickers will pay to show their children that milk isn't created at the supermarket.

The idea of creating a local processing plant for Washington County's dairy farmers is not a radical proposal, since it's already being done in this area with some success. What the farm community needs now is some sense of urgency from elected officials, some indication that they know that if there's wholesale residential development on many existing farms, every taxpayer will pay more for the schools and services those new homes will require.

Will it cost some money? Probably, but by my reckoning there should be $300,000 in start-up cash available. That's the amount the County Commissioners pledged to director Ron Maxwell last November to film the third leg of his Civil Way trilogy locally - providing "Gods and Generals" succeeded commercially.

As of last month, that $90 million flick had grossed just $12.9 million in the U.S. Helping farmers make money on milk would be more profitable - and better for the county in the long run - than making another movie.

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