The recent scare to the dairy industry by the large milk company, Parmalat, clearly illustrates the need to update the existing milk bonding laws, especially in Pennsylvania.
Meetings are going on with key officials in Pennsylvania to examine the present bonding laws, as well as reviewing suggested changes to the law.
Sen. Roger Madigan, R-Bradford County, is taking the lead in proposing amendments to the bonding law: 100 percent bond coverage and/or three payments a month to dairy farmers will be considered.
Now that Parmalat has filed voluntary bankruptcy, it might mean that dairy farmers shipping to the giant company might even be better protected than before.
At least Parmalat’s actions will now be scrutinized by the bankruptcy courts.
Parmalat has asked the courts to give payments to dairy farmers top priority.
Actually, as you examine Parmalat’s record in paying dairy producers, the record is not all that bad. We can think of some organizations that pay producers later than Parmalat did in January 2004.
One of Parmalat’s biggest mistakes was not notifying their producers that their milk checks would be a couple of days late.
However, a bad situation turned into a real turmoil with some of the techniques used by the organizations in recruiting Parmalat’s producers.
Many producers did not know which way to go with their milk. Only time will tell if the barnstorming tactics used by some people will be a benefit to the dairy farmers.
A few producers have returned to Parmalat because of the tactics used to obtain their milk.
Parmalat’s problems clearly illustrates the need to update the bonding laws in Pennsylvania.
(The author is manager of the Progressive Agriculture Organization.)