Dairy compact could go national
WASHINGTON (AP) – A proposal by Vermont lawmakers to take the Northeast Dairy Compact national has won some supporters in the Upper Midwest, New England’s long-time rival in the battle over the price-fixing cartel.
The plan would establish a minimum price for milk in every region of the country, as the Northeast Dairy Compact did for New England for the past four years.
The proposal would work this way: When dairy prices fall below a set minimum level, dairy processors–companies that buy the milk and put it in bottles and cartons–would pay the difference into a national dairy trust fund. That money would be distributed to dairy farmers through regional districts.
Rep. Bernie Sanders, I-Vt., came within 30 votes of passing his amendment during debate on the farm bill earlier this month, with the vocal backing of Rep. David Obey, D-Wis. Sen. Patrick Leahy, D-Vt., plans to insert something similar to the Senate agriculture bill in the next few weeks.
“No one in this chamber has been more opposed to regional dairy compacts than I have,” Obey said. But he called Sanders’ bill “the most imaginative effort to overcome regional differences that I have seen in the last four or five years.”
The moves [sic] comes after New England lawmakers failed in their efforts to renew the Northeast Dairy Compact, which expired last month. Minnesota and Wisconsin lawmakers have fought the compact for years, arguing that it leads to overproduction of milk and depressed dairy prices in their markets.
“I am a strong supporter of the Northeast Dairy Compact,” Sanders said. “I make no apologies for that. But the fact is that while we have worked very hard, we have not been successful in reauthorizing the Northeast Dairy Compact.”
“We’ve had this regional division for years,” Obey said. “Bernie’s approach is an effort to de-Balkanize it.”
The legislation would establish five regional supply management districts. Minnesota and Wisconsin would be grouped with Illinois, Indiana, Iowa, Michigan, and the Dakotas in the upper Midwest District. Participation by states would be voluntary.
Wisconsin’s five Democratic representatives, including Obey, voted for the amendment. The state’s four GOP reps voted against it.
Rep. Collin Peterson, Minnesota’s most senior member on the House Agriculture committee, said he opposed the bill because he feared it would lead to overproduction. Only two of the state’s eight reps–Democrats Bill Luther and Jim Oberstar–voted for it.
“Farmers are their own worst enemy,” Peterson said. “What they do best is produce. They’re going to produce as much as they can. They don’t look at the big picture.”
Sanders’ amendment does have provisions aimed at discouraging overproduction. For example, if overproduction in a particular regional district leads to increased government purchases of surplus dairy products, the U.S. Department of Agriculture would assess the region the added cost.
But Peterson said that doesn’t go far enough.
“We are going to get so much milk that we are not going to know what to do with it,” he said.
Dave Schmidt, who farms 32 cows on a 60-acre dairy farm in Menomonie, Wis., agreed.
“People would put on more and more cows, and we’d be awash in milk,” he said. “Farmers would be more and more on the government dole.”
The International Dairy Foods Association, which represents milk, ice cream and cheese processors, predicts the legislation would add $2 billion in costs to processors and consumers.
“It appears to me to be new milk tax legislation,” said Kathleen Nelson, a lobbyist with IDFA. “This comes at a time when hundreds of thousands of Americans are facing layoffs.”
Sanders said the compact would cost consumers only about 1 percent
more, and suggested people would be willing to pay it.