Tom Vilsack, Secretary of Agriculture, has announced $11 million in grants to support small-scale dairy operations.  Speaking at the World Dairy Expo in Madison, WI. Vilsack stated, “USDA is committed to helping America’s dairy industry remain competitive as they work hard to provide necessary, nutritious dairy products to communities nationwide.”  He added, “The Dairy Business Innovation Initiative has invested over $64 million in more than 600 projects that are increasing dairy supply chain resiliency and creating new markets.” To date there has not been any report on the evaluation of return on this expenditure of public funds?

Grants will be awarded on a noncompetitive basis to three dairy organizations and a university to be distributed among milk producers: -

• The Pacific Coast Coalition will use $700,000 to allow farmers to establish high-value uses for milk including cheese and organic dairy products. 
• The University of Tennessee will distribute $3.5 million to support farmers to introduce sustainability and innovation.
• The Vermont Dairy Business Innovation Center will use $3.5 million to assist farmers to improve energy efficiency.
• The Dairy Business Innovation Alliance in Wisconsin will apply $3.5 million to technical assistance with an emphasis on expanding market opportunities.

The support of dairy farmers is evident given their inability to thrive in a market characterized by declining demand for fluid milk and dairy products and in the face of increasing costs.  Again, it is questioned why USDA is using funds to prop up farming entities that lack financial viability and have limited prospects of attaining profitability.  The expedient of using intermediaries to distribute funds is also questioned.  Given the practices of the USDA under the current Administration, questions relating to accountability and return on the euphemistically termed ‘investments’ should receive scrutiny.  Secretary Vilsack apparently ended up with a fat checkbook and is distributing his largesse to a limited range of farmers in one subsector of livestock production. These producers are apparently unable to acquire financing from regular banking institutions based on their inability to demonstrate collateral and capacity despite character in the form of sweat equity.

There has been no support for the egg-production sector over many years despite periods when producers were under water for extended periods. Innovation, product development, market promotion have been funded by check-off remittances to the AEB.  Many small-scale producers have ceased production since 2010 because they could not raise capital for conversion to cage free production or ceased supplying packers. Low prices over extended periods depleted working capital and prevented these producers from incorporating depreciation in pricing to fund replacement of obsolete equipment.