San Joaquin Farm Bureau Federation

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By Craig W. Anderson

Dairies are some of the most highly regulated agricultural operations and this provides an example of how regulators pick off a segment of the ag industry, and those regulations tend to spread to the rest of the ag industry. As this occurs, Farm Bureau appreciates regulatory reforms that would improve the federal rulemaking process. Reasonable rules would create an atmosphere of cautious optimism that the regulated sectors could eventually be brought into compliance. Those rules tend to the rest of agriculture.

Legislation solution

For example, legislation passed by the House of Representatives would reform the process that created controversial mandates such as the "Waters of the United States," or WOTUS rule that would affect every aspect of agriculture, including the dairy sector. Paul Schlegel, AFBF director of environment and energy policy said, "That rulemaking process was an example of how things are not supposed to happen. Any agency creating federal regulations should be faithful to the congressional intent, faithful to Supreme Court rulings and should examine relevant science objectively."

No free rules

Part of the problem, according to Jack Hamm, SJFB past president and Lodi dairy farmer, is that "regulations, taxes and fees usually go hand in hand, so no rule is free. Ag really suffers from our products being regulated by people who aren't ag savvy, are activists without agricultural expertise."

Agency conflicts

Even when a federal milk marketing order is developed by the USDA in conjunction with the California Department of Agriculture the merits of the bill might be lost in conflict between agencies. "Establishing a federal milk marketing order is complicated because they have different interests and each must be satisfied," said Anja Raudabaugh, Western United Dairymen (WUD) CEO. 

Methane digesters devour bank accounts

Then, there are federal mandates such as the regulation that requires the state's dairies to reduce manure methane emissions by 40 percent by 2030 primarily by using methane digesters. Raudabaugh called that goal "relatively unrealistic. We'd been hoping to receive some support from the greenhouse reduction fund, mostly aimed at digesters." 

The average cost of a regulation-required methane digester is around $4 million and, said Raudabaugh, "About 50 percent of the digesters that've been built in the state have gone under for various reasons. I fear the regulatory cost of milk production will continue to shrink the dairy business in California." The estimates for achieving the methane reductions of 40 percent will require the construction of 200 digesters on the state's largest dairies.

State's dairy sector shrinks

And that would definitely be bad news as California's 2016 milk production dropped 428 million pounds from 2015 with income falling more than $227.5 million, according to the U.S. Department of Agriculture. Milk cows were reduced by 14,000 head; overall, the gross income for California dairies dropped nearly 3.5 percent to $6.07 billion in 2016 compared to $6.29 billion in 2015.

Adding to dairy's woes is the closing of dairies – 115 lost in the Central valley over the past two years – and, said "Raudabaugh, "We've lost several dozen this year." Those that remain will still have to comply with the regulations, no matter the difficulty.

Alternatives to digest

The anti-methane mandate has, however, spurred a serious look at Alternative Manure Management Programs (AMMP). The CDFA said, "AMMP aims to incentivize adoption of alternative – non-digester – manure-management practices that reduce greenhouse gas emissions from dairy and livestock operations including scrape conversion, open solar drying and composting of manure onsite, conversion of dairy operations to pasture-based management and solid-separation technologies."

President Trump takes action

President Donald Trump has met with farmers to discuss the industry's regulatory burden and he has signed executive orders and introduce a tax plan that includes repealing the federal estate tax, actions that could have a positive impact on agriculture, and policies that mirror those of CFBF.

"Farmers have advocated for years for repeal of the federal estate tax," said CFBF President Paul Wenger. "Relative to the tax reform proposals, the devil is in the details, but repeal of the federal estate tax is critical because it's burdened farming and ranching families for years, forcing them to sell land, livestock and equipment to pay the tax or risk losing the farm or ranch."

Common sense standards

"For any regulation that is forced on businesses, and especially agriculture, there ought to be a clear end result that's within reason and economically viable. Otherwise, regulation for the sake of regulation is ridiculous, and that's what we've come to."

Via executive order, President Trump created the interagency Task Force on Agriculture and Rural Prosperity which will look for ways to reduce the regulatory burden and increase economic opportunity in rural areas.

Regulatory reform key for ag

"Regulatory reform is a key issue for agriculture," said Shaun Crook, chair of the CFBF Federal Economy and Farm Policy Committee. "The cost in both time and money for compliance can be a huge burden on small and large operations. "We've also found that sometimes to comply with one agency's rules, you're forced to violate the rules of another."

Pendulum swinging back to reason

Josh Rolph, manager of federal policy for CFBF said, "[Farm Bureau] has applauded Mr. Trump's rollback of stifling regulations such as the waters of the U.S. rule. Executive orders and congressional action are swinging the pendulum back toward reason."

Regulations should be practicable, science-based, and shouldn't create a tremendous burden for those who are primarily responsible for feeding the nation. "The Clean Water Act, Endangered Species Act and Food Safety Modernization Act should each be improved in ways that can simultaneously create a healthier environment, prevent food-borne illness and promote productive agriculture," Rolph said. "Repealing the estate tax would allow farm families to pass the farm to the next generation without the government stepping in to take nearly half of hard-earned assets."

Dairy farmers and the entire agricultural community could benefit greatly from fair and reasonable regulations; where once this was a pipe dream in the Obama administration, now changes in a variety of mandates seems possible. CFBF contributed to this article.