PA State House

Gov. Tom Wolf’s $24 million package to help Pennsylvania farmers has passed its first test in the Legislature.

During budget hearings this week, Appropriations Committee members in both chambers appeared generally favorable to the proposal.

“It’s time and it’s timely because certainly agriculture needs that attention,” said Sen. Judith Schwank, a top Democrat on both the Senate Appropriations, and Agriculture and Rural Affairs committees.

Lawmakers mostly asked Ag Secretary Russell Redding how provisions in the PA Farm Bill would work, and some floated ideas for improvements. None declared themselves flat-out opposed.

The Farm Bill, which offers something for almost every sector of Pennsylvania agriculture, is the most ambitious ag funding proposal of Wolf’s tenure.

Still, it’s a relatively small part of Wolf’s $160 million proposed budget for the Ag Department.

Aid for Dairy

Naturally, much of the discussion focused on dairy, an iconic Pennsylvania industry that has been battered by several years of low milk prices.

A $5 million program to help farmers and processors seize new marketing opportunities is back this year.

It’s one of the PA Farm Bill’s largest line items, and legislators from both chambers asked how the current year’s money is being used.

Redding said the first round of funding closed in November and netted 28 applications seeking about $3.5 million.

The applicants include farmers looking to manufacture dairy products and processors planning to add packaging lines. The projects vary in scale and come from all over the state.

The proposals are pending approval by a state board, and a second round of funding is in the queue.

“We have more than enough projects to consume the $5 million,” Redding said.

In the meantime, the state has been courting dairy companies from around the world to build processing plants in the state.

Some companies have expressed concerns about the state’s reliability as a supplier.

Redding interprets that as a desire to work with a few large dairies instead of many small farms.

“That is not our model,” he said.

Pennsylvania has the smallest average dairy herd size in the United States despite being the nation’s seventh largest milk producer.

The state is also a leading natural gas producer, and it’s got plenty of water. Those assets make the state stand out to prospective processors, Redding said.

Dredging and other improvements at the Port of Philadelphia should increase access to dairy export markets.

Schwank, D-Fleetwood, said a recent day of volunteering at a food pantry has shown her that more work is needed to get milk to needy people.

“People wanted it, but it wasn’t there,” she said.

In a sign of support for dairy farmers, officials at both the House and Senate hearings sported bottles of chocolate milk.

Open for Business

Pennsylvania’s other livestock producers would benefit from a new Center for Animal Agriculture Excellence modeled on the Center for Dairy Excellence.

Pork and poultry in particular are major industries in the state, but they have not received the same level of support as dairy has, Redding said.

The $1 million center would help with animal welfare, the transition to organic farming, permitting challenges and conservation.

The Farm Bill would also create a $2 million Ag Business Development Center that would swallow up the Center for Farm Transitions and the Preserved Farms Resource Center.

At Tuesday’s House hearing, Rep. Jesse Topper, R-Bedford, wanted to know why the new entity would cost more than the original programs.

“Normally when we combine agencies or departments or bring something together, it saves us money,” Topper said.

Redding said the new center would offer an expanded list of services, including business planning and market development.

Help would be available to all farmers, not just those in the narrow demographics served by the current programs.

The center could work in coordination with Penn State Extension but would likely not duplicate services, Redding said.

The Farm Bill would also waive the realty transfer tax, paid when real estate changes hands, when a preserved farm is transferred to a qualifying beginning farmer.

Rep. Clint Owlett, R-Wellsboro, wanted to know what farmers would need to do to qualify.

Redding said recipients would need to have federal gross income from farming for the past 10 years, have made at least $10,000 in gross ag sales in the most recent taxable year, and intend to engage in ag prodcution in Pennsylvania.

In short, this program would be for farmers with some experience. New farmers could get help from the Ag Business Development Center, Redding said.

Promotion

The largest percentage increase in the ag budget’s main line items belongs to PA Preferred, the state’s branding program for foods grown and produced in Pennsylvania.

Under Wolf’s proposal, the program’s funding would rise from $600,000 to $3.2 million.

At Wednesday’s Senate hearing, Sen. Elder Vogel, R-New Sewickley Township, chairman of the Senate Agriculture and Rural Affairs Committee, asked what the administration’s plans were for that additional money.

For one thing, Redding said, it’s time to do some advertising for the brand.

“We’ve heard directly from retailers to say, ‘Great idea, but you need to help me tell the world that it’s there,’” he said.

At the same time, the Ag Department should do more to quantify the sales value of the PA Preferred seal to retailers and generate revenue from licensing, said Sen. Pat Browne, R-Allentown, the chairman of the Appropriations Committee.

Some $1.6 million would support the growth of organic production.

Pennsylvania is second in the nation in organic production, in large part because of its livestock sector, but much of the state’s organic feed is imported from the Midwest or abroad.

“There’s no reason we can’t grow that here,” Redding said.

Rep. Lynda Schlegel Culver, R-Rockefeller Township, said she has heard from farmers who are worried about the state pushing a wholesale shift to organic. They say farming by organic methods isn’t always feasible.

Redding said PA Preferred will still have room for conventional farmers, but it makes sense to promote Pennsylvania-produced organic foods through the state’s branding apparatus.

Pests and Diseases

The Farm Bill would also create an ag disaster readiness account.

Some $3 million would be for spotted lanternfly containment, and $2 million would be available for response in case of an animal disease outbreak.

The Ag Department is particularly concerned about African swine fever, which is spreading in China, and Newcastle disease, which has been found in California and Utah.

“We would hope that dollars in this readiness account would allow us to move with some dispatch to staff, to respond, to get the equipment, to get the expertise,” Redding said.

Sen. Ryan Aument, who represents a poultry-rich section of northern Lancaster County, said he hoped the funding would allow the state to “jump into action at a moment’s notice.”

Rep. Marcia Hahn, R-Bushkill Township, asked if the funding could help farmers after natural disasters such as floods - a concern brought to the fore by last year’s record rainfall.

Mike Hanna, the executive deputy ag secretary, said flood recovery funding would most likely come from Restore PA, another of the governor’s initiatives.

But Rep. Jim Struzzi, R-White Township, warned against relying on Restore PA for natural disaster relief.

Wolf has proposed paying for that proposal with a severance tax on natural gas drillers, and “that’s not something that’s a definite by any means,” Struzzi said.

The state already charges an impact fee on each gas well, and Republicans have consistently rejected Wolf’s calls for the production-based tax.

Changing the Process

Rep. Martin Causer, chairman of the House Agriculture and Rural Affairs Committee, said he is generally supportive of the Farm Bill, but he doesn’t like the administration’s plan to zero out $3.8 million in established agricultural line items.

Wolf’s proposed ag budgets have customarily omitted funding for a handful of small programs, which the Legislature has generally proceeded to reinstate.

Cuts this year include the Ag Department’s research budget, ag promotion and export work, the All-American Dairy Show and the Keystone International Livestock Exposition.

“I think that with every year’s budget we have to start with what we did the previous year before moving forward to new programs,” said Causer, R-Turtlepoint.

Causer said he’s tired of being told line items are on the chopping block while also being told that those programs are important.

“Quite frankly, it shouldn’t be a game every year of eliminating funding just to have to put it back,” he said.

Redding assured House members that some of the unfunded programs would be woven into the Farm Bill programs.

“There’ll be research components in the Farm Bill, but there’s not going to be a one-to-one substitution there,” he said.

The next hurdle for the ag budget is a March 20 joint hearing by the House and Senate ag committees focusing on the PA Farm Bill proposals.

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