By Aaron Stauffacher, associate director of government affairs
It is not too often dairy farmers have the opportunity to vote on Federal Milk Marketing Order (FMMO) reform. Often years go by before a referendum process makes it to a farmer vote. And then if a farmer belongs to a cooperative, he or she may not even get the chance to cast an individual ballot reflective of their own personal views.
This is not the case for Edge’s dairy farmer members.
Cooperative bloc voting is a longstanding rule within FMMO law. However, given the past several years of sustained low milk prices combined with the volatility of dairy markets we are experiencing in 2020, numerous aspects of dairy policy and pricing are up for evaluation. We should not expect major changes overnight. But a threshold item that could take center stage sooner rather than later is a cooperative’s ability to bloc vote on behalf of its membership on matters pertaining to FMMO reform.
The law requires a producer referendum to approve or modify a federal order. The approval or modification is only adopted if at least two-thirds of the eligible producers voting in the referendum or the eligible producers who represent more than two-thirds of the milk in the referendum vote in the affirmative. If the referendum fails to meet the required vote, the FMMO is eliminated.
Ballots in such a proceeding are cast in one of two ways. The first is through individual ballots by independent producers. The second is through bloc voting where a qualified cooperative may cast a ballot on behalf of all of its producer members. This procedure gives large cooperatives a large amount of control over FMMOs. However, a cooperative can elect not to bloc vote for its members so the individual producers may cast a ballot according to their own views. Edge is in the latter category and has always held the position that individual producers should be able to cast their own ballot.
Several amendments have been put forward over the years, but none passed the initial stages to reach a referendum. While there is no pending vote on FMMO reform, your understanding of bloc voting is important because a debate appears to be emerging as other farm organizations are taking notice of issues in the system.
More than a year ago, the American Farm Bureau Federation (AFBF) formed an internal working group to assess the opportunities for reform in federal dairy policy and milk pricing. The group included dairy farmer representation from across the United States, including Midwestern members. As we understand it, the work was a soup-to-nuts review on dairy policies, procedures, pricing and regulations. Edge was able to lend insight to their work, particularly on our uniqueness as a producer-focused cooperative. As a result of the group’s work, AFBF released its newly adopted polices for dairy in late July.
Those policies include several elements worthy of a fresh discussion. In general, they could be categorized into three buckets — giving producers a stronger voice in FMMO matters, inclusive milk pricing and improving transparency. Bloc voting fits in the first bucket. Instead of a wholesale elimination of cooperative bloc voting, AFBF is taking a middle road by supporting a modified bloc voting procedure.
The concept of modified bloc voting for FMMO reform is borrowed from the method producers and their cooperatives vote on in promotion program (i.e. checkoff) referendums. The procedure would be the same for independent producers, and a cooperative could still choose to bloc vote for its members. This differs from a true bloc vote when a cooperative chooses to bloc vote.
Under the modified bloc voting procedure, the cooperative would take a position on the referendum and then must inform its members of how the cooperative intends to vote. A producer member can then elect to individually cast a ballot regardless of how the cooperative intends to vote. If a producer does not individually cast a ballot, the cooperative may vote its members’ uncast ballots.
Going forward, any change in FMMO producer referendum voting rules would require legislation to be passed by Congress. No bills have been introduced. Edge has long stressed the importance of allowing for individuality on FMMO amendment and reform matters. This is why Edge has relinquished past opportunities to cooperative bloc vote. Our line of thinking is not one commonly held by other cooperatives. Edge believes all producers should have an individual voice on the FMMO issues that ultimately affect their bottom line. Cooperative bloc voting, as it currently exists, does not allow for that.
As this debate takes shape over the next several months, and maybe even years, Edge looks to be a part of crucial conversation on behalf of our dairy farmer members.
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