Bill proposes tiered milk-pricing system to create countercyclical support for Vermont dairy farmers

Representative Don O’Brien introduced H.475, a bill to establish an equitable, tiered pricing system for milk handled in Vermont intended to generate a fund that could flow back to dairy farmers and possibly support programs such as universal school meals.

O’Brien said the proposal was inspired by prior work from a state dairy task force and by pricing models used in other states, particularly Maine. He described the mechanism as a “tiered” approach that would collect fees at the handler level — the processors that buy and process Vermont milk — and create a pool of funds that would supplement farm income when federal market prices fall: “So the thing about this is it's countercyclical,” O’Brien said, describing how payments would be larger when federal prices are low and smaller when prices are high.

Committee discussion covered practical hurdles and precedents. Members noted that in Maine the revenue from a similar program has flowed through the state general fund and then been appropriated to dairy supports, a structure reportedly shaped by interstate-commerce and accounting constraints. A committee member observed that handlers could push back because the fee would add a cost to processing, and speakers discussed how processors that use Vermont milk for value-added products may still source locally rather than relocate to other states.

The committee also discussed related tools and history: the Northeast Area Compact (a multistate pricing approach that existed in the past); the federal Dairy Margin Coverage program; and recent volatility in milk classes and prices. O’Brien noted the measure would not replace federal programs such as Dairy Margin Coverage and that the proposal would require technical work and stakeholder vetting to sort tiers, appropriations, and possible treatment of milk coming from out of state but processed here.

No formal vote was recorded in the excerpted discussion. Committee members later moved on to other agenda items, and O’Brien said the committee would compare the House proposal to a Senate farm relief bill scheduled for review.