To: Wisconsin Department of Agriculture Trade and Consumer Protection (DATCP) Board
From: David Ward, Cooperative Network Director of Government Relations & Dairy
Re: Financial Help for Dairy Industry
Cooperative Network is the statewide trade association representing Wisconsin’s cooperative community. Our state is home to more than 800 cooperative businesses owned by more than 2.9 million Wisconsin citizens. Over 80% of the milk marketed in Wisconsin goes through a cooperative and around 60% of the cheese made in Wisconsin is made by a cooperative.
2009 has brought economic hard times to the dairy industry in Wisconsin. Because dairy cooperatives are owned by the dairy producer members, the hard times are being felt throughout the industry. Wisconsin dairy cooperatives have stepped up to do what they can to help their farmer-owners get through these hard economic times. This includes their participation in Cooperatives Working Together (CWT) which has removed 4.8 billion lbs of milk and 238,000 cows in 2009, as well as buying cheese and donating it to food pantries in an attempt to take cheese off the market. Many cooperatives have also accelerated the revolving of equities to get dollars into producer’s hands to help them in these hard times. For example, one dairy cooperative has returned an additional $1.7 million back to its member owners.
Cooperative Network commends DATCP for its attempts to help Wisconsin dairy producers in these hard economic times. At the September 9 board meeting, DATCP board member Brian Rude suggested that Wisconsin government look at ways it can help the dairy industry by lowering taxes and fees and by cutting government red tape. Cooperative Network would like to take this opportunity to suggest a solution that Wisconsin could use to help provide needed dollars to the dairy industry.
First, milk contractor assessments to Wisconsin’s Agriculture Producer Security (APS) program have far exceeded the draws against Milk Contractors in recent years. According to APS 2009-2010 first quarter Statement of Revenues, Expenditures and Cash Balances, the APS fund is in good shape with a $10.2 million ending cash balance, almost $7 million of which is attributed to milk contractor assessments. For the 2009-2010 first quarter, $174,019.49 has been collected in assessments from milk contractors. This is on top of the nearly $900,000 collected in 2008-2009. In the past 10 years the only default (Linden Cheese) amounted to a $130,000 payment from the fund. For this reason, Cooperative Network proposes a one year assessment holiday for Milk Contractor Assessments to Wisconsin’s Agriculture Producer Security program to assist the dairy industry in this difficult dairy economy. Reducing these unnecessary dairy industry costs at this difficult time will help to ensure additional dollars are returned to the member-owners of our state’s dairy cooperatives.
Second, Cooperative Network requests that DATCP closely analyze the Agricultural Chemical Cleanup Program (ACCP) for more opportunities to return much-needed dollars to producers. The ACCP provides financial assistance to clean up ag chemical and fertilizer spills through a $0.44 ton tax on fertilizer and a 0.75% tax on ag chemicals. The projected balance at the end of 2008-2009 fiscal year is $2.8 million. According to Wisconsin Statute 94.73 (15), DATCP shall adjust ACCP surcharge amounts as necessary to maintain a balance at the end of each fiscal year of not more than $2.5 million. Cooperative Network is concerned that excess dollars in the ACCP fund will be removed from the ACCP fund and used for other purposes unrelated to chemical and fertilizer cleanups. According to the Legislative Fiscal Bureau, $3.7 million has been transferred from the ACCP Fund to the General Fund for other purposes in recent years. This does not include the $2.4 million transferred in the 2009-2010 state budget. Cooperative Network asks DATCP to take the measures necessary to reduce the surcharge on fertilizer and ag chemicals in time for the 2010 planting season. These dollars would then remain in the pockets of cash-strapped dairy producers.
Thank you for your consideration. |
