The global food company Danone, which owns Horizon Organic, has not lived up to promises it made when it pulled out of New England, according to a statement from six regional organic dairy organizations.
A year ago, 89 organic dairy farmers in New England, including 28 in Vermont, learned of Danone’s planned exit from the region. The company told farmers in a letter they had one year until their contracts expired.
Most farmers haven’t seen any of the additional money Danone said it would provide, according to their statement. The organic dairy groups said the company has not made any measurable investments in the region.
The missive was signed by the Northeast Organic Farming Association of Vermont; Northeast Organic Farming Association of New York, Inc.; Maine Organic Farmers and Gardeners Association; Northeast Organic Farming Association of New Hampshire; Northeast Organic Dairy Producers Alliance; and Organic Farmers Association.
“In the year since Horizon’s announcement, some of the farms have gone out of business, some have been lucky to find another dairy buyer, many have had to make significant, costly upgrades to their farms, and all dairies have suffered from inflation, skyrocketing feed prices and summer drought,” the groups wrote. “Danone owes these farmers a future, because their healthy, organic milk has helped make Danone one of the largest multinational dairy companies in the world.”
They called on Danone to pay the farmers their severance and invest $20 million in the transition — matching the amount the United States Department of Agriculture gave to the Northeast Dairy Business Innovation Center to address the problem.
“U.S. taxpayers should not be picking up the tab to clean up Danone’s economic mess left behind as they exit the Northeast,” they wrote.
Officials with Danone refuted the claims, saying the company remains committed to its transition plan. The company has been “in regular communication with local stakeholders in Vermont” and has “honored all contracts, including extensions, and have paid the additional transition payments,” spokesperson Nancy Fishgold said in a statement.
“These transition payments, which are facilitated through local farm cooperatives, have been executed over the past several months and will continue to be made as farms exit the network,” Fishgold said. “Regarding investments in the region, we are continuing to explore co-investments that will support the best needs.”
Maddie Kempner, policy director for the Northeast Organic Farming Association of Vermont, or NOFA-VT, said most farmers “have not received those payments or are not clear if they received the payments.”
“There's like a small possibility that it's been included in other checks they've received but most farmers do not feel they’ve received them,” she said.
Kempner said the communication between Danone and farmers has been “pretty abysmal,” and the impact is unprecedented — she’s never seen a milk buyer cancel contracts with this many farms all at once.
With national trends already plaguing the organic dairy industry — lowering prices for milk and raising production costs — the decision left the farmers in dire straits. Many feared they would need to shut down, and while some secured contracts with Organic Valley, some have transitioned away from the business.
Dairy organizations, state and federal government agencies and politicians appealed to Danone last August, asking them to help farmers transition during their exit.
In what they called a four-part “transition plan,” Danone officials said they would extend contracts by six months, give farmers more money during the last six months of their contracts, provide free technical support and “explore co-investment solutions that will address some of the systemic challenges related to Northeast organic dairy infrastructure.”
Danone is a certified B Corp. Entities with that certification must meet high social and environmental performance, be accountable to stakeholders and practice transparency.
“The really unprecedented dumping of these farmers just runs so counter to everything that we understand B Corp principles to be about,” Kempner said.
Ed Maltby, executive director of the Northeast Organic Dairy Producers Alliance, said the organization he leads was formed when the previous owners of Horizon Organic wanted to cut pay prices for their farmers. Back then, he said, it was easier to communicate with Horizon representatives.
“It's a classic example of what happens when you get consolidation and international control,” Maltby said.
The hardships for farmers — and the next generation of farmers, who have seen the small, family dairies struggle with the situation — is hard to quantify, he said.
“They were in a bad situation, and it's just made it worse,” he said. “All the resulting stress and trying to deal with that has had a dramatic effect on not just the farm, but on the whole community.”
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