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Small Biz November 9, 2006, 2:25PM EST

The Raw Milk Wars Heat Up in Ohio

The state is aggressively pursuing farmers who make unpasteurized milk available to consumers. Will a Democratic governor declare a cease-fire?

Which state is toughest on small dairy farmers seeking to meet the burgeoning consumer demand for raw milk? It recently looked as if Michigan had the title, after its October sting operation on a farmer delivering raw milk and other products to members of a cooperative in Ann Arbor (see BusinessWeek.com, 10/19/06, "States Target Raw-Milk Farmers"). That one-upped California, which the previous month had quarantined the state's largest raw-milk producer (see BusinessWeek.com, 9/28/06, "Getting a Raw Deal?").

But Ohio may be tougher than both these states when it comes to policing distribution of raw (unpasteurized and unhomogenized) milk, moving aggressively over the last year-and-a-half against farmers who might make it available in any form—as pet food, via herd-share leasing programs, or even giving it away.

"They're treating raw milk like heroin or crack," says David Cox, a Columbus lawyer with the firm Lane, Alton & Horst who specializes in cases involving agriculture regulations. He now has six Ohio cases at various stages, and one common element in all, he says, is a sense of "vindictiveness" by the state's Agriculture Dept. (ODA). "I think there's competition among the directors of agriculture to see who can put raw milk out of business."

Coveting the Neighbors' Cows

Ohio's agriculture officials deny there's any vindictiveness behind their actions, but do allow that going after raw milk producers has become a high priority for the state and a hot topic among state agriculture officials. "When I go to meetings of my cohorts, it is the No. 1 issue that comes up," says Lewis Jones, chief of the agency's dairy division.

The crackdown appears to have begun in September, 2005, when some neighboring farmers complained that Arlie Stutzman's family dairy in Millersburg, Ohio, was distributing raw milk to consumers via a herd-share leasing arrangement. According to Jones, such complaints are increasingly common because farmers "are upset because [raw-milk producers] are getting three times the price [the conventional farmers] are getting."

So an agent from ODA visited the Stutzman farm pretending to be a building contractor, and asked to purchase a gallon of raw milk. According to the hearing testimony, before the agent's one-gallon plastic container was filled, "He inquired as to cost and was advised there was no charge, but he could make a donation if he so desired."

"Noble Purpose"

After the agent had received his milk, he "again inquired as to price. Stutzman replied, 'Whatever you think it is worth.' The investigator then gave Stutzman $2, asking, 'Is this all right?' Stutzman put the $2 in his pocket." Stutzman, an Amish farmer, "testified that he had been taught that if any person asks for food, one should give it if he has such."

The hearing examiner allowed that Stutzman's explanation "is a noble exercise. However, one cannot pursue this noble purpose by turning a blind eye to clear proscriptions set forth by the legislature." The penalty: revocation of his milk producer's license. A department spokesman says Stutzman subsequently applied for a new license and was granted it a couple months later. Presumably he will be more sensitive this time around to Ohio's stringent enforcement program.

Next to feel the brunt of Ohio's crackdown was Linda Fagan, a mother of eight children, who runs a 15-cow dairy in Macksburg, Ohio. She had decided five years ago after reading an article in a farming publication to sell raw cow's milk as pet food. She obtained all the licenses and approvals from ODA, and for the next four years sold her raw milk and cream at farmers markets, in containers labeled "not for human consumption."

Strong Suspicions

Her customers were mostly owners of calves, goats, and baby deer, though she doesn't doubt that at least a few purchasers were drinking the milk themselves.

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