The Process section should contain information on topics like:

• Farming best practices
  
• On farm processing

• Federal inspection regs.
• State inspection regs.

Risk Management Programs:
Milk Income Loss Contract (MILC) - extended to August 31st, 2007. Started in 2002 Farm Bill w/intent to keep small dairy farms in business. Arose out of demise of Northeast Dairy Compact. Senator Leahy's statement on Farm Policy and the MILC program.

This involves the financial position of farmers and producers, affecting their ability to stay in business and manage risk. Payments are made to producers when dairy prices fall below specified levels. Eligible dairy producers are those who, anytime from December 1, 2001, to September 30, 2005, commercially produce and market cow milk in the United States or produce milk in the United States and commercially market the milk outside the United States. There were $2 Billion in payments made to dairy producers from the program's inception to Nov. 2004.

Risk management programs are intended to mitigate risk for farmers including price, production, income, institutional and financial risk. Milk is a fragile commodity that cannot be stored until the market improves. Payments from the MILC program have been found by the GAO to have kept small and medium dairy producers in business, thought to help support local economies. VT Dairy Farms contribute $1 billion to state economy, according to a UNH study.

The risk management programs have the policy goal of increasing the security of the farmers in order to secure the food supply. Some argue that keeping small producers in business makes for a safer milk supply than if it were consolidated and thus an easier target for contamination or terrorism. Also, provides for security of local economies, etc. Efficiency can also be affected (in terms of market efficiency) by interfering with the market. Some say it does little to encourage development of more efficient practices.

In Vermont, the MILC program is supported by Leahy and the General Manger/CEO St. Albans Cooperative Creamery, Inc. MILC provides counter-cyclical support on the first 125 cows-worth of production so it is not favored by large producers. Because of this limitation, it favors small and mid-size producers of which there are a little over 1000 in VT. However, in the big picture, some economists argue that interfering in the market, as this program does, may have the unintended consequence of lowering milk prices. Furthermore, some argue that this program does not encourage efficiency. While this program is of immediate benefit to VT dairy producers, more research is needed to see if this program is truly in the best interest of small dairy producers or if there are better ways to manage risk while supporting small and mid-size dairy producers.