• Mass. dairy farmers urge state to keep tax credit




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  By Bradford L. Miner
  Correspondent

  
  Posted Mar. 7, 2016 at 6:58 PM
  Updated at 7:41 PM
  
  
  

  WESTBORO – Dairy farmers voiced support Monday for making the emergency dairy tax credit program a permanent part of the tax cod.

  During a state Department of Agricultural Resources hearing, Mark Duffy, a Carlisle dairy farmer, and David Hanson, owner of Hanson Farm in North Brookfield, said the importance of the program could not be understated for the future of the state’s dairy industry.

  “The next generation of dairy farmers coming along is looking at the dairy industry as a whole. It’s not just about milking cows, but whether this is a viable model for supporting a farm and providing for a family,” Mr. Duffy said.

  Jessica Burgess, DAR legal counsel, conducted the two-hour, sparsely attended hearing at the Massachusetts Division of Fisheries and Wildlife field headquarters.

  Mr. Duffy, a Cabot Creamery Cooperative director, said he was speaking on behalf of Massachusetts farmers in the Agri-Mark dairy cooperative, and the Massachusetts Association of Dairy Farmers.

  The program, instituted in 2008 as a component of the Dairy Farm Preservation Act, allows the state’s dairy farmers a refundable income tax credit based on the amount of milk produced and sold at the Federal Milk Marketing Order price for the Northeast market.

  If that price, currently about $15 per hundred pounds of milk, drops below the cost to produce the milk, based on statewide production costs, the tax credit is triggered, according to the agriculture department.
  

  Mr. Duffy said those conditions have been present for more than 12 months, and all of the state’s milk producers are receiving the credit.

  Bill and Sue Turner, dairy farmers from Egremont, in the Berkshires, said they have benefited from the program since the beginning.

  “We support the program and the amendments to make it permanent. We have had better years and poorer years, and this program helped us make it through the poorer years,” Mr. Turner said.

  Mr. Duffy said the most critical element of the tax credit program is that production costs more accurately reflect what the state’s farmers have to spend, rather then using regional or national production cost averages.

  “We have many dairy farms in Massachusetts well over 100 years old, some much older, having been in the same family for generations. Without a tax credit guarantee, many of those farms would be facing a bleak future,” the Carlisle farmer said.

  “One need only pay a visit to any of the farms that are beneficiaries of this program to see just how effective it is,” he added.

  Both Mr. Duffy and Mr. Hanson said that reduced milk prices are the result of competing on a world market for dairy prices.

  “What affects the world market is everything from Europe to Russia and China, to production in Australia and New Zealand,” Mr. Duffy explained.

  “Two years ago, we were enjoying record prices. Now, depending on butterfat and protein content, milk prices are in the $15 a hundredweight range. We’d like to be back up in the 20s range to be competitive,” he said.

  Both Mr. Hanson and Mr. Duffy said that beyond the farmers themselves, the tax credit program was an economic boost for the entire infrastructure and associated goods and services that supported not just dairy farms, but all of the state’s farms.

  Mr. Hanson said, “Right now, there’s been a downturn in milk prices so the tax credit will come in handy this spring. Spring is when we spend a lot of money up front on seed and fertilizer, and other needs.”

  Mr. Duffy said the next generation of dairy farmers is looking at the family farm and asking, “Is this a viable industry for the future to provide for a family?”

  State support for the tax credit tells us the state wants us here. They believe that agriculture has a future here, Mr. Hanson said.

  Mr. Duffy said the program has been written into the tax code, and the only change will be the designation from “emergency” to “final.”

  “The dairy industry not only has a long and storied history in Massachusetts, it also contributes greatly to our state’s vast agricultural economy and produces a highly nutritious product for the commonwealth’s residents,” said Massachusetts Department of Agricultural Resources Commissioner John Lebeaux. “MDAR recognizes the critical role of dairy farmers in Massachusetts, and will continue to work to ensure that dairies across the Commonwealth remain viable and successful while producing a safe, local, healthy product for generations to come.”