August 02, 2020

Dairy farm woes focus of Agriculture panel> Officials seek replacement for lost milk subsidy

NEWPORT — Robert Tardy, the chairman of the Maine Legislature’s Agriculture Committee, said Friday that the committee will hear alternatives, options and hopefully some solutions next week to the dairy farmer crisis in Maine.

Agriculture experts have estimated that from 100 to 150 Maine farms could disappear over the next year with the recent loss of a state milk subsidy.

Since the loss of the subsidy, which was determined to violate interstate commerce laws, legislators, dairy operators and farmers have been working together to reinstate some sort of program to replace the subsidy.

Tardy said a subcommittee of the Agriculture Committee has been studying methods to lessen the impact of the lost subsidy, and will present some alternatives at a committee meeting next Thursday.

“Basically, we are going to recommend several changes. We expect the subcommittee to make a recommendation regarding an excise tax on milk,” said Tardy from his Newport business Friday.

The tax, he said, would go directly into the general fund. A separate appropriation then would be sought for the second half of the fiscal year, from January to June, based on each farmer’s previous month’s production.

The appropriation, estimated to be about $200,000 a month, would translate to 50 cents per hundredweight to the farmer.

Tardy said other methods are being sought to assist Maine’s depressed dairy industry. Revamping the state’s farm and open-space tax law would be one way, he said.

Tardy advocates reducing the penalty for withdrawal that farmers pay if they remove any land from pasture. The new recommendation would be to go with the constitutional minimum of requiring the farmer to pay taxes avoided over the past five years.

The current withdrawal penalty is a complicated formula based on resale value of the land and percentages.

Another refinement would be to clarify, on a rate of every three to five years, the tax schedule used for farmland.

“The current schedule is so vague that many assessors use the high value,” he said.

Pastureland can be valued at between $150 and $500 an acre, said Tardy.

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