Congress to weigh fate of disputed
By Beth Daley, Globe Staff, 5/2/2001
Tiny, family-owned dairy farms have defined the New
England landscape for generations: Black-and-white
cows munching on green grass are the embodiment of
country living for many urbanites.
But a controversial effort to save the region's dwindling
number of dairy farms faces an uncertain future today as
Congress considers whether to continue a subsidy program
for farmers. Supermarkets and dairy processors hope to kill
the Northeast Dairy Compact, a four-year-old program that
sets a price floor for milk sold by farmers and passes the
charge, about 4.5 cents per gallon, on to consumers.
''Without the dairy compact, a lot of local dairy farmers will
close up shop,'' said Representative James P. McGovern,
Democrat of Massachusetts, a cosponsor of the bill, which
would reauthorize the compact and include five other states
from New York to Maryland.
''It also means fresher milk for New England consumers,''
McGovern said. ''You shut down one of these dairy farmers,
you could see a strip mall the next day. No one wants that.''
However, support for the compact hinges on consumers'
willingness to pay extra for milk, the price of which has risen
much more than 4.5 cents a gallon since the compact's
In the past, some supermarkets have put signs in milk cases
blaming prices of close to $3 a gallon on the subsidy
But an independent University of Connecticut study being
released today says prices went up, in large part, to increase
leading supermarket and milk processors' profits, giving them
an extra 11 cents a gallon. The study, by Ronald W. Cotterill
and Andrew W. Franklin of the Food Marketing Policy
Center, found that of the $130 million more that consumers
across New England paid for milk, about $50 million has
gone to supermarkets and dairy processors during the first
three years since Congress passed the Northeast Dairy
Compact. The price of milk went up about 29 cents a gallon
from July 1997 to July 2000, according to the researchers.
The study is sure to play heavily into the dairy compact
debate, as milk processors and supermarkets argue that the
program unfairly targets consumers who have to pay to
''If people are concerned about consumer price levels of milk,
the price-taking by these large retail [businesses] makes the
price-taking by the dairy farmers pale in comparison,'' said
Jay Healy, commissioner of the Massachusetts Department of
Food and Agriculture. ''I find it to be the height of
Officials at the Massachusetts Food Association and Stop &
Shop Supermarket Co. declined comment late yesterday
afternoon, saying they had not seen the report. A call to Suiza
Foods, the largest New England milk processor, was not
returned. In the past, supermarkets and processors have
adamantly denied accusations of price gouging.
Most people agree that dairy farms, occupying about 1.4
million acres of open space in New England, need to be
saved. There are now 262 dairy farms in Massachusetts,
compared with 416 in 1993.
While the aesthetic value of preserving the picture-perfect
pastures are obvious to any tourist driving by them, compact
supporters say the farms also keep milk production local,
avoiding high transportation costs and ensuring freshness.
Without the compact, they say, more dairy farms could close
and most of New England's milk would be trucked in from
the Midwest, raising prices even more than what it would be
under the compact.
About $140 million has been paid out under the compact, and
dairy farmers get about $16,000 each per year on average.
''The compact is the nation's one good model to protect
against globalization,'' said Stephen Burrington of the
Conservation Law Foundation, a Boston-based
environmental advocacy group. ''We know [the
reauthorization] is going to be difficult. It has strong support
in a lot of quarters, and it has a lot of opposition, and from
serious monied interest.''
Indeed, opposition to McGovern's bill - which would also
smooth the way to create a compact of 14 southern states
and allow others to join later - has been apparent since its
inception. They say the compact unfairly burdens seniors and
low-income families who cannot shoulder the price increase.
The compact exempts some low-income government
programs, such as school lunches, from paying the compact
increase. Still, some say, the idea of using consumers to pay
for farmers to stay in business is unfair.
''Artifical price supports are always a bad idea,'' said David
Tuerck, executive director of the Beacon Hill Institute of
Suffolk University. ''If the government wants to do something
for dairy farmers, it should find a way not to raise the cost of
But many dairy farmers say they would be out of business
without the compact. Before it was adopted, they often
operated at a loss; milk prices were so volatile and barely
covered operating costs, they say.
''It gives us that little more breathing room,'' said David W.
Shepard, co-owner of 330-acre Elm View Farm in Warren.
His ancestors established the farm in 1715, and Shepard has
''If the price of milk wasn't at or above the compact level, I
don't think we would continue to do this for very long.''
This story ran on page 1 of the Boston Globe on 5/2/2001.
© Copyright 2001 Globe Newspaper Company.