[Congressional Record Volume 145, Number 58 (Tuesday, April 27, 1999)]
[Senate]
[Pages S4249-S4250]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             DAIRY COMPACTS

  Mr. FEINGOLD. Mr. President, I rise in strong opposition to 
legislation introduced today by my colleagues Senator Jeffords, Senator 
Leahy, Senator Cochran and Senator Specter. They have introduced a 
measure which will further aggravate the inequities of the Federal Milk 
Marketing Order system. Their legislation will make permanent and 
expand the Northeast Interstate Dairy Compact and will authorize the 
establishment of a southern dairy compact.
  Despite the discrimination against dairy farmers in Wisconsin under 
the Federal Dairy policy known as the Eau Claire rule, the 1996 Farm 
Bill provided the final nail in the coffin when it created and 
authorized for 3-years, the existence of the Northeast Interstate Dairy 
Compact. The Northeast Interstate Dairy Compact sounded benign in 1996, 
but its effect has been anything but, magnifying the existing 
inequities of the system.
  The bill which authorized the Northeast Interstate Dairy Compact 
established a commission for six Northeastern States--Vermont, Maine, 
New Hampshire, Massachusetts, Rhode Island, and Connecticut. This 
commission set minimum prices for fluid milk higher even than those 
established under Federal Milk Marketing Orders. Never mind that the 
Federal milk marketing order system, under the Eau Claire rule, already 
provided farmers in the region with minimum prices higher than those 
received by most other dairy farmers throughout the nation.
  The compact, which controlled three percent of the country's milk, 
not only

[[Page S4250]]

allowed the six States to set artificially high prices for their 
producers, it allowed them to block entry of lower priced milk from 
producers in competing States. To give them an even bigger advantage, 
processors in the region get a subsidy to export their higher priced 
milk to noncompact States. It's a windfall for Northeast dairy farmers. 
It's also plainly unfair and unjust to the rest of the country.
  Mr. President, the Northeast Interstate Dairy Compact (NEIDC) is set 
to expire at the implementation of USDA's new Federal Milk Market Order 
system. According to the Omnibus Appropriations measure passed last 
year, the expiration date of the NEIDC is scheduled for October 1, 
1999. Now, Members of Congress are pushing for an extension and 
expansion of the existing milk cartel and for the authorization of 
another.
  To make clear the magnitude of this legislation on producers and 
consumers we need to only look at the numbers. Currently, three percent 
of milk is under a compact, conceivably, under this new measure, over 
40% of this country's milk will be affected. More importantly, one 
hundred percent of this country's milk prices will be affected--in 
Wisconsin, prices will be adversely affected.
  These compacts amount to nothing short of government-sponsored price 
fixing. They are unfair, and bad policy. Now, my colleagues would like 
you to make this compact permanent, expand it to include other states, 
and authorize a southern dairy compact. After three years, we know that 
dairy compacts:
  Blatantly interfere with interstate commerce and wildly distort the 
marketplace by erecting artificial barriers around one specially 
protected region of the Nation;
  Arbitrarily provide preferential price treatment for farmers in the 
Northeast at the expense of farmers in other regions who work just as 
hard, who love their homes just as much and whose products are just as 
good--maybe better in Wisconsin;
  Irresponsibly encourage excess milk production in one region without 
establishing effective supply control. This practice flaunts basic 
economic principles and ignores the obvious risk that it will drive 
down milk prices for producers everywhere else in the country;
  Raises retail milk prices on the millions of consumers in the Compact 
region;
  Imposes higher costs on every taxpayer because we all pay for 
nutrition programs such as food stamps and the national school lunch 
programs that provide milk and other dairy products.
  As a price-fixing device, the Northeast Interstate Dairy Compact was 
unprecedented in the history of this Nation. As a dairy cartel, it is a 
poor legislative fix and bad precedent to deal with low milk prices.
  Wisconsin's dairy farmers are being economically crippled by federal 
dairy policies. It's time to bring justice to federal dairy policy, and 
give Wisconsin Dairy farmers a fair shot in the market place.
  I urge my colleagues not to buy into the rhetoric surrounding this 
issue. I urge you to work together towards fair national dairy policy. 
A policy that provides all dairy producers a fair price for their 
commodity, a policy that allows all of this country's dairy producers 
to succeed on the basis of hard work and a good product.
  I urge my colleagues to oppose this legislation and to join me in the 
fight against its passage.

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