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Good To See Govt. Helping Private Sector

August 20, 2012
The Post-Journal

Is it at all possible anyone in Albany or Washington will take a lesson from the irony of last week's yogurt summit?

Yes, yogurt.

Gov. Andrew Cuomo called the summit to hear ideas about how the New York's dairy industry can expand fast enough and well enough to ride the wave of the state's burgeoning yogurt industry.

Much of the talk at the summit last weekend centered on ideas to get government out of the way so dairy farmers can increase their herds to meet the growing demand for raw milk.

The yogurt industry is a great New York success story so far. The number of yogurt processing plants in the state has increased from 14 in 2000 to 29 today. Chobani has a plant in Chenango County, for example, that employs 900 people and expects to increase that to 1,000. Fage has a plant in Fulton, County and Alpina and Pepsi/Muller are building plants in Western New York to produce various yogurt products.

In particular, the boom in Greek yogurt, which uses three times as much milk as regular yogurt, has already created great opportunities for dairy farmers. The yogurt industry in New York has increased its need for milk from around 158 million pounds a dozen years ago to 1.2 billions pounds today. The Farm Bureau estimates New York dairies need to increase output by another 15 percent.

But because of government regulations, there has been a limit to how far dairies can go in expanding their operations.

One of the barriers is a complicated and potentially expensive federal and state regulation that tends to restrict small dairy farms in New York to having199 or fewer cows. Once a farmer crosses over to the 200 level, complicated and potentially expensive state and Environmental Protection Agency regulations kick in.

But according to Farm Progress, a company serving the agriculture industry, the compliance costs present a classic government Catch 22. Because those costs are so expensive, dairies that bump into the 200-cow rule cannot afford to buy enough extra cows to expand their earnings to a level where they can afford what the regulations require when they increase the size of their herd.

The upshot is that Gov. Andrew Cuomo weighed in last week and the state Agriculture Department has raised the threshold to 300 cows - a change that will enable any of the state's 800 small dairy farms to expand milk production without running afoul of a host of complicated and expensive regulations.

Sen. Charles Schumer has chipped in proposals to allow farmers who purchase cows that are already old enough to produce milk to write them off as a capital expense, thus lowering their overall tax burden.

He has also included a provision in the bill to set up federal tax-deferred savings accounts for farmers to help them save and grow during booms and to weather market downturns.

There was even talk about helping dairies install anaerobic digesters to turn farm waste into energy - and perhaps having the Power Authority build digesters to turn waste into electricity in places where farmers can't afford them.

These are all good ideas and it is good to see everyone busily thinking up ways to help.

But will anyone, we wonder, take a lesson from the spectacle of government puzzling over how to get out of the way so that the private sector can, by dint of hard work and the financial risk of expanding production, pull the state along to prosperity?

 
 

 

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