[Congressional Record Volume 145, Number 58 (Tuesday, April 27, 1999)]
[Senate]
[Page S4247]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          DAIRY POLICY REFORM

  Mr. KOHL. Mr. President, I would like to take this opportunity to 
discuss the direction of our nation's dairy policy. When Congress 
passed the 1996 Farm Bill, we passed the most significant reform of our 
agricultural system since the Great Depression. In that bill, we 
ordered USDA to update our outdated milk pricing laws--something that 
had not happened for 60 years.
  In taking these market oriented actions to drag dairy policy into--if 
not the 21st century--at least the second half of the 20th century, 
Congress may have spoken more boldly that we were willing to act. 
Congress has tried to put the brakes on USDA's milk pricing reform 
efforts from the moment they began. And now, mere days after USDA 
announced the reformed system, there are those who are seeking to 
insulate their home states from it by legislating compacts to set the 
price of milk artificially high in their regions.
  These actions cannot stand. Though I understand my colleagues desire 
to protect the dairy farmers in their regions, I cannot let them do so 
at the expense of the productive dairy farmers in the upper Midwest--or 
at the expense of a national milk pricing system that, for the first 
time in sixty years, is market oriented and fair.
  Expanding the anti-competitive Northeast dairy compact would 
regionalize the dairy industry and institutionalize market distorting, 
artificially high prices in one area of the country--just as the rest 
of the country is moving toward a simplified and more equitable system.
  Dairy markets are truly national in nature. My region of the country, 
the Upper Midwest, has learned this lesson all too well. We have seen 
our competitive dairy industry decline, damaged by the distortion 
caused by an outmoded milk marketing order system. That system requires 
that higher prices be paid to producers the farther they are from 
Wisconsin. Sixty years ago, when the Upper Midwest was the hub of dairy 
production and the rest of the country lagged far behind, this regional 
discrimination had some justification. It encouraged the development of 
a dairy industry capable of producing a local supply of fluid milk in 
every region. But today, that goal is largely accomplished, and the 
continuation of the discriminatory pricing policy serves only to fuel 
the decline of the dairy industry in the Midwest.
  The new system proposed by USDA is not all that we in the Upper 
Midwest would want. But it is an improvement in the current system, and 
a move toward a national compromise on this divisive issue. It is a 
step forward.
  The legislation introduced today to continue the Northeast Dairy 
compact is just the opposite--a step backwards. It would remove a 
region from the new national dairy pricing system and move toward a 
Balkanized dairy policy. It hurts consumers in the affected region--
consumers who will pay artificially high prices for their milk. And it 
hurts our hopes of achieving long-overdue unity on dairy pricing 
reforms that are fair and good for all regions of the country.
  For all of these reasons, I oppose the expansion of regional milk 
pricing cartels like the Northeast Compact, and I ask my colleagues to 
do the same. Lets enter the next millennium with a dairy policy that is 
market-oriented and consumer friendly--not one that ties us to the 
unjustified protectionism and unnecessary inequities of the past.

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