Jun. 18, 2015
HARRISBURG – The House Agriculture and Rural Affairs Committee on Wednesday held a public informational meeting to discuss legislation sponsored by Rep. John Lawrence (R-Chester/Lancaster) that would encourage transparency and accountability with regard to premiums owed to Pennsylvania dairy farmers.
House Bill 1265 would require any payment made to a dairy farmer to clearly delineate the dollar amount of the total that consists of money collected from the state mandated over-order premium. Established in 1988, the over-order premium is intended to help cover Pennsylvania dairy farmers’ production costs and protect them from fluctuations in dairy market prices. The premium is included in the price of milk paid by Pennsylvania consumers.
“For decades now, this state-mandated over-order premium has been collected on each gallon of milk sold in Pennsylvania. Yet many family farmers do not know how much, if any, of that state-mandated money is actually getting back to them,” Lawrence said. “This legislation would correct that by requiring payments made to Pennsylvania family farmers, whether by milk dealers or cooperatives, to include a line-item showing the specific amount of state-mandated premiums contained in the check.”
Current law requires payment and full disclosure of the over-order premium when a “milk dealer” makes a payment to a “producer,” which includes both a family farmer and a dairy cooperative.
The result is that milk dealers paying family farmers and milk cooperatives must include a line-item on the milk check showing the specific amount of state-mandated premiums contained in the check. Milk cooperatives paying family farmers, on the other hand, are under no obligation to disclose anything on the milk check showing the specific amount of state-mandated premiums contained in the check because both are defined as producers.
Dairy farmers Rob Barley of Lancaster County, Nelson Troutman of Berks County and Dan Brandt of Lebanon County each spoke in support of the legislation, saying that it would add transparency to the milk payment process and build trust between members of a milk cooperative.
House Bill 1265 would “clear up misconceptions about where the premiums are really going,” Barley said, adding that the legislation would “allow the industry to move forward in a unified manner that will build trust between dairy farmers and the milk dealers and cooperatives that market their milk.”
Committee members also heard remarks from William Beeman, co-chairman of the Northeast Council of the Dairy Farmers of America (DFA), a nationwide milk cooperative; Dan Risser, president of the Mt. Joy Dairy Farmers Cooperative Board; Earl Fink, executive vice president of the Pennsylvania Association of Milk Dealers; and Tim Moyer, executive secretary of the Pennsylvania Milk Marketing Board.
Beeman stated that requiring cooperatives to include line-items indicating over-order premiums on farmers’ checks would add a “costly administrative burden.” Fink, however, said that his organization has been showing the over-order premium amount on producer’s pay statements for nearly 18 years.
“A Pennsylvania family farmer has the right to know how much of the payment he is getting for the milk sold off his farm comes from a state-mandated premium, regardless of whether that farmer sells his milk to a cooperative or a milk dealer,” Lawrence added. “The state-mandated over-order premium should be transparent at all levels, but particularly to the family dairy farmer.”
House Bill 1265 is awaiting consideration in the House Agriculture and Rural Affairs Committee.
Representative John Lawrence
13th District
Pennsylvania House of Representatives
Media Contact: Jonathan Anzur
717.260.6610
janzur@pahousegop.com
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