On June 17, 2015, the Pennsylvania House of Representatives Agricultural and Rural Affairs Committee held an informational meeting on proposed House Bill 1265, regarding transparency of Pennsylvania state-mandated milk premiums paid to dairy farmers.
House Bill 1265 addresses farmers concerns that they are not aware of whether they are being paid the Pennsylvania state-mandated premium (“over-order premium”) on milk sales. The state over-order premium is currently $1.85 per hundredweight, or in terms of gallons, .16 cents. The fee applies to every gallon of Class 1 fluid drinking milk that is produced, processed, and sold in Pennsylvania. Farmers currently lack a verification method that the premium is being paid because payments made to the farmer do not contain a separate line item identifying the over-order premium amount paid. The bill would make it mandatory for milk dealers, as well as dairy cooperatives, to include distinct notification on the payment form to inform the farmer how much they are being paid for the State-mandated premium.
Testimony was heard from both proponents and opponents of the bill. Opponents of the bill discussed the administrative difficulties of implementing the changes required by H.B. 1265. In addition to implementation difficulties, they argued ample transparency already exists so the bill would provide no extra benefit to the farmers. Proponents of the bill argued it would strengthen trust between dairy farmers and cooperatives by fostering accountability and transparency in payments received. It would also assist the farmers in adequately managing their operations by knowing how much revenue will be coming in.
To watch the full legislative hearing, click here.
Written by Katharine Richter - Research Assistant
June 18, 2015