[Congressional Record Volume 145, Number 76 (Tuesday, May 25, 1999)]
[House]
[Pages H3585-H3589]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             DAIRY PRICING

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 1999, the gentleman from Wisconsin (Mr. Green) is recognized 
for 60 minutes as the designee of the majority leader.
  Mr. GREEN of Wisconsin. Mr. Speaker, I am here tonight to talk about 
an important issue of fairness, fairness to farmers, fairness to 
consumers, and fairness to taxpayers. I know that ``fairness'' is an 
overused term. But quite frankly, Mr. Speaker, it has never been more 
important or more true than it is on the issue that I want to talk 
about tonight, and that is the issue of dairy pricing.
  For the last six decades, we have had a Government mandated system of 
dairy price supports. It began in the late 1930s because dairy 
producers had a difficult time getting their goods to consumers in a 
timely way. They had a difficult time because of technology in meeting 
consumption needs. We did not, quite frankly, have effective 
infrastructure or enough technology to transport our surplus to States 
that had deficit in production.
  Those days are over, however. We have the refrigeration, we have the 
infrastructure to transport dairy products from States like Wisconsin 
anywhere in America overnight. As a result, the outdated dairy price 
system, the Federal order system, no longer makes sense.
  Wisconsin dairy farmers and Wisconsin communities are being ravaged, 
they are being destroyed by the current Federal order system. In the 
last 8 years, Wisconsin has lost over 10,000 dairy farms. Wisconsin has 
lost 2,000 dairy farms in each of the last 2 years. We have lost more 
dairy farms in the last 8 years than most States ever have.
  Now, I am here tonight to speak to my colleagues, quite frankly, not 
on behalf of dairy farmers. Dairy farmers are not looking for our 
sympathy. They are a tough bunch. This is a tough life-style. They know 
that. They have been fighting uphill all of their lives. They are not 
looking for sympathy. They are looking for fairness.
  More importantly, quite frankly, I would think to the Members of this 
body is the fact that this unfair system not only hurts our dairy 
farmers, my family farmers in Wisconsin, of which there are 22,000 
remaining, but it is also unfair to consumers.
  Mr. Speaker, it is important to realize, it is important to know that 
the outdated Federal order system artificially inflates the price of 
milk. And as more farmers go out of business, and as I just said, we 
are losing farmers each and every year, the more farmers who go out of 
business, the higher that price will be.
  The Citizens Against Government Waste, Americans for Tax Reform, a 
number of taxpayer groups, groups that do not necessarily have a 
natural stake in the fight over a dairy policy, they have reached an 
interesting conclusion. After looking at the Federal order system, they 
have concluded that the Federal order system that we have had in this 
country for six decades is little more than a tax on milk. It is a milk 
tax that consumers are paying all across this land. It is a milk tax to 
the tune of about $1 billion each and every year.
  Now, the reason I come forward today is because of a battle that I 
believe is going to be on this floor tomorrow and, quite frankly and 
unfortunately, probably on this floor for weeks and months to come.
  Some weeks ago, Secretary Dan Glickman proposed a final order on the 
Federal order system for dairies. And in that Federal order, Secretary 
Glickman proposed a very minor change to the Federal order system, a 
very minor, modest change. And it is true, it will benefit Wisconsin 
farmers, dairy farmers, but again in a very modest way.

                              {time}  2115

  Now, it may be ironic to some of you that I come here today to 
support a proposal from a Democrat administration. But I come forward 
because this issue of the Federal order system of the milk tax is not 
about Republican versus Democrat, it is not about conservative versus 
liberal. It is about doing the right thing. And I come here tonight to 
argue that we need to support Secretary Glickman's plan. Modest as it 
is, it is a step in the right direction.
  Now, the Federal order system for dairy is one of the most 
complicated systems that you can possibly imagine. It is full of 
acronyms, it is full of terminology that the average person cannot 
understand, let alone a Member of Congress who may serve on the 
Committee on Agriculture or who comes from a dairy State. If you tried 
to explain to your constituents that this system that we have in place 
creates a price on milk based not upon productivity, based not upon 
quality, based not upon efficiency, but instead based merely on the 
distance that a producer is from the city of Eau Claire, Wisconsin, 
your constituents would not believe you. They would think that you were 
making it up. The sad reality is that that is the truth.
  We have a dairy system in this Nation for which government mandates 
prices for fluid milk again based merely upon geography. That is wrong. 
It is unfair to farmers, it is unfair to consumers, it inflates the 
price of milk and, quite frank,ly it is un-American because it is 
contrary to our free enterprise system.
  Mr. Speaker, I yield to the gentleman from Minnesota (Mr. Gutknecht). 
I know that he shares many of the concerns that I bring forward 
tonight.
  Mr. GUTKNECHT. I would like to thank the gentleman for yielding and 
especially thank him for requesting time for this special order 
tonight. I suspect there are an awful lot of Americans who may tune us 
in and certainly most of our colleagues who will be watching in their 
offices or are still here on the House floor who really do not 
understand this whole milk marketing order system. Frankly, having 
studied it now for about 5 years, I honestly cannot say that I 
completely understand it, either.
  But I would correct the gentleman on one fact, and that is, he said 
it is priced purely on how far you are from Eau Claire, Wisconsin. That 
is partially right. It is the only commodity I think in the United 
States, maybe in the world, that is priced not only based on where it 
comes from, it is also priced on what it will go into. Milk that goes 
into cheese is of lower value than milk that goes into a bottling plant 
and is sold for fluid milk for drinking.
  There are actually four classes of milk. Class one is milk that goes 
into liquid dairy products that are drinkable. Class two are spoonable; 
that would be things like yogurt. Class three is cheese, and class four 
is dry powdered milk. So we have four classes, and it is all priced 
based upon where it comes from. And the farther you are from Eau 
Claire, Wisconsin, the more the dairy farmer gets for their milk. The 
closer you are to Eau Claire, Wisconsin, the less you get.
  And then if you are at an area that has cheese plants and most of the 
milk goes into cheese, you get a lower price still.

[[Page H3586]]

  In my opinion, it is the most indefensible thing that the Federal 
Government ever created. It may have made sense back in 1934. In my 
opinion, it makes no economic sense today.
  Let me just show in this chart that I have next to me, and it sort of 
illustrates the differentials we are talking about. These are the 
producer class one blended price benefits per hundred weight. That is 
the way milk is priced. Milk to dairy farmers, and we have got a former 
dairy farmer sitting here in the second row and maybe he can talk a 
little bit about it, maybe he does not even understand how his cream 
checks were calculated.
  But if you lived, for example, in the northeastern part of the United 
States, your differential came to about $1.40. If you lived in the 
Appalachian region, that average price was $2.34. If you lived down in 
Florida, that worked out to $3.32. But if you live in the area that the 
gentleman from Wisconsin and myself come from, in the upper Midwest, 
you can see that over here it is only 27 cents. That is what we are 
talking about, ultimately.
  We are not asking for special privilege, for special benefits; we are 
not even asking to receive equal pay for equal milk; but we would like 
to equalize it much more than it is today.
  The second chart that I have I think illustrates it more 
geographically and what we are talking about. The country is divided up 
into all of these milk marketing order regions. For example, these are 
the average blended prices for current Federal milk marketing order 
areas. In the Pacific Northwest, that average price last month I 
believe was $14.75. If you are in the upper Midwest, that is, basically 
Wisconsin, Minnesota, parts of the Dakotas, you are talking $13.57.
  Now, on the other hand, if you lived in eastern Colorado and produced 
milk, your average blended price last month was $15.16. And if you 
lived down here in Florida, that price is $16.82. If you look at this, 
at one time it may have made some sense because the area around Eau 
Claire, Wisconsin, was considered the dairy capital of the United 
States and in many respects the dairy capital of the world, and we are 
still privileged that in this region we produce about 30 percent of the 
milk in the United States.
  But as I say, it may have made some sense back in 1934; that was 
before the days of refrigeration, that was before the days of the kind 
of transportation, the interstate highway system that we have, but 
today we can move milk 1,200 miles in 24 hours. So the whole idea that 
we need this regional balkanization of the United States as it relates 
to dairy production is just crazy.
  Again, back to the point that my colleague from Wisconsin made about 
the basic unfairness of this: How can you say to dairy farmers in 
Glenville, Minnesota, that you are only entitled to $13.57 for your 
milk, but the same quality, the exact same quality of milk in the 
Southeast is worth $16.13. That is a difference of over $2. When you 
are talking about hundreds of thousands of pounds of milk per month, 
you are starting to talk real differences.
  I see the chairman of the Committee on Rules is approaching the 
microphone and perhaps we should yield to him for a moment.
  Mr. DREIER. I thank my very good friends for yielding.
  Mr. Speaker, I would like to congratulate my friends for their very, 
very hard work and wish them well in their proceedings here.
  Mr. GUTKNECHT. We would like to thank the chairman and we hope that 
he will drink more milk. June is Dairy Month, so enjoy as much as you 
can.
  Mr. DREIER. I will tell my friend that I am a huge dairy consumer. 
Ice cream is my favorite.
  Mr. GUTKNECHT. I would like to thank the chairman.
  As I mentioned earlier, we have been pushing now for 60 years to get 
this whole milk marketing order system reformed. Finally, under the 
leadership of former Congressman Gunderson from Wisconsin, we finally 
got included in the ag bill a couple of years ago a requirement that 
the Secretary of Agriculture, Secretary Glickman, was forced to come up 
with a new plan to begin to bring some equity to this whole milk 
marketing order system. To his credit, he did come up with a plan that 
frankly some of us are not completely happy with.

  I want to point out these colors if I could. I promise not to take 
too much time here, but this essentially reflects some of the changes 
that would occur under the plan that Secretary Glickman came out with. 
If you look at this, actually Minnesota and Wisconsin lose under the 
Glickman proposal.
  And so we are not asking for completely equal pay for equal milk, but 
we are asking to level the playing field. The net practical effect of 
the Glickman plan is, it does eliminate some of the differences. 
Relative to some of the other areas of the State, if you just go by 
winners and losers, we lose less than some of the other States, but 
that is because they already are getting more than we are getting.
  So we are prepared to accept what Secretary Glickman has proposed in 
a spirit of compromise, because at least in general it moves to a 
leveling of the way that the milk marketing orders are set up.
  Before I yield back to my colleague from Wisconsin, I want to play a 
little visualization game with some of my colleagues. If you could, 
just close your eyes and think of all of the products that the pricing 
is based upon some geographic location. Just think about that. Well, 
the answer is, there is only one. Only milk.
  I think we have got a cartoon from, I believe it is from the St. Paul 
Pioneer Press. Maybe the gentleman from Wisconsin wants to talk a 
little bit about it. Maybe it is easier for me to talk about it because 
I have got it right here.
  But could we imagine a system where all computers would be price 
adjusted according to their distance from Seattle? We could not imagine 
that, could we? Could we imagine a system where all country music 
should be price adjusted according to how far it is away from 
Nashville, Tennessee? Where all oranges should be price adjusted 
according to their distance from Florida?
  But we do have a system where all milk is priced based on how far 
away it is from Eau Claire, Wisconsin.
  Now, the question at the bottom is, which of these is actual Federal 
policy. It is amazing when you stop to think about it. It is the only 
product where the price is based on some arbitrary geographic location.
  Secondly, it is based on what that product is going to go into. In 
fact, up in northern Minnesota where we produce an awful lot of iron 
ore, they produce taconite pellets. These taconite pellets, no one 
could imagine that some Federal bureaucrat would sit up there in front 
of an iron mine and say, well, these taconite pellets are going to go 
into automobiles so they will be priced at this level, and these 
taconite pellets are going to go into steel lockers and therefore the 
price will be something else. That would be a crazy, absurd idea. But 
the truth of the matter is that is exactly what happens to milk. It is 
all done by bureaucrats here in Washington, D.C.
  Once again, we are here on the floor of the House tonight arguing 
this case because farmers in the upper Midwest have been dealing with 
this antiquated, in fact Justice Anton Scalia has referred to this 
system as ``Byzantine.''
  We have dealt with this Byzantine system for 60 years. Finally, 
Secretary Glickman has come out with a plan which is not perfect, 
actually in some respects it still punishes dairy farmers in the upper 
Midwest, but at least it levels the playing field, at least it is 
fairer for dairy farmers regardless of where they are than the system 
we have today. I congratulate him for it.
  I am willing, in a spirit of bipartisanship, to move forward with the 
plan that the Secretary came up with.
  I will yield back to the gentleman from Wisconsin and maybe we can 
talk a little more about this cartoon. As I say, it would be a whole 
lot funnier if it was not true.
  Mr. GREEN of Wisconsin. I thank my friend and colleague from 
Minnesota. I think he has pointed out again just the absurdity of the 
system and that cartoon does show it.
  Think about this. We are entering the year 2000, the next millennium, 
yet we have a system for the production and consumption and 
distribution of milk that is based upon economic realities around World 
War II. Think about how much technology has changed since then.
  Beyond that, we are at a time in our history in which Members of this 
body

[[Page H3587]]

from both sides of the aisle are emphasizing the need to open up 
borders, to break down barriers for trade all across this world. Yet 
here in America, in supposedly the bastion of entrepreneurial 
capitalism, we have a system that creates barriers, that blocks the 
flow, creates disincentives for the flow of dairy products across State 
lines and across regional lines. This is counter to everything that we 
stand for in America today.
  Again, I want to come back and emphasize the point, this system is 
terrible for the dairy farmers in States like Minnesota and Wisconsin. 
Again, over the last 8 years, we have lost more dairy farmers than most 
States ever had.
  But beyond that, this is bad for consumers. Under this system, we are 
driving up the price of milk. We are also encouraging large corporate 
farms, which are buying up the small family farmer.

                              {time}  2130

  If that trend continues, we are going to see dairy production in the 
hands of only a few, and then we will have a true monopoly on the 
supply of milk. Then we will see milk prices rise, and then milk will 
no longer be the cheap and wonderful fluid that it is, available to all 
today.
  This is also, this system is bad for taxpayers. It drives up the cost 
on programs like the school meal program, it drives up the costs for 
families on food stamps, reduces the value of food stamps. This system, 
almost any way to look at it, is absurd, it is un-American, and it is 
wrong.
  Now we are not going to change things overnight, we are not going to 
change things here tonight, but we do want to make our case to the 
American people. It is a long uphill battle, but it is certainly no 
longer and no more uphill than our dairy farmers are facing.
  We want to start the process tonight, and as has been stated before, 
it is a long battle that we have ahead.
  I yield my friend from Minnesota (Mr. Gutknecht).
  Mr. GUTKNECHT. I thank the gentleman from Wisconsin for yielding, and 
again I thank him for having this special order.
  As my colleagues know, if this regional differentiation was not bad 
enough, and if the fact that we price milk to the producer based on not 
only how far they are from Eau Claire, Wisconsin, but what ultimately 
that milk is going to go into, if that were not bad enough, we have one 
other little wrinkle that has made things worse. It is called regional 
compacts.
  Now this is the only area, again, that I can think of where we have 
allowed States literally to go together and hold out imports of dairy 
products from other parts of the country. In other words, they have 
created their own little fiefdoms.
  As my colleagues know, at the very time, as was mentioned by the 
gentleman from Wisconsin, at the very time we are saying to Europe and 
we are saying to Asia and we are saying to our trading partners all 
around the world it is time to bring down those trade barriers, we need 
open markets and open trade, we have problems trading even with certain 
regions of the country.
  Right now there is a Northeast Dairy Compact, and unfortunately some 
of our colleagues, even as we speak, are trying to work out new 
compacts to try and create even worse regional differentiations between 
the regions and to keep out imports from other parts of the country.
  As my colleagues know, this seems, and the gentleman mentioned the 
word ``un-American''. At the very time that we are trying to break down 
trade barriers to China and to Asia, we are constructing trade barriers 
right here in the United States, and in my opinion it is just an 
outrage, and so the only thing we can do is come to the House floor, 
offer amendments, talk about this, talk about the fairness, and 
hopefully in the long light of history sooner or later these trade 
barriers are going to be knocked down. We are going to see open trade 
not only with Europe, but with the Northeast as well.
  The problem with compacts in my opinion is they do violate, if not 
the letter, certainly the spirit of the Commerce Clause in the 
Constitution, and frankly, had they not been legislatively approved, 
there is a very good chance that the Supreme Court would have thrown 
them out. That debate is going to get very heated because, as I say, 
not only does the Northeast want to expand its dairy compact, they are 
talking about a regional compact in the Southeast, perhaps extending as 
far west as into Kansas.
  And we joked with some of the supporters of those compacts. We would 
be happy to allow those compacts, if they would just allow the upper 
Midwest in. I mean, if we could be getting the same price, for example, 
that they are already getting in New York and New Jersey, and you see 
by this chart $13.57 for us, $15.40 in New York and New Jersey. The New 
England Compact States are getting $15.61. Now our dairy farmers would 
love to be in that compact if that meant that they got $15.61 for their 
milk.
  That is the difference. Again, it is unfair, and if the system is 
already convoluted and complicated, the terrible tragedy is there are 
people here in the Congress today, well-intentioned Members, but they 
are trying to make the situation even worse, even more complicated, 
even more unfair.
  Mr. GREEN of Wisconsin. Mr. Speaker, what my colleague, the gentleman 
from Minnesota (Mr. Gutknecht), points out is something important, and 
that is that there are really two different elements to this overall 
fight that we have on the dairy front.
  There is, first of all, the problem of the Federal order system, 
which is what we began talking about tonight, and that is the 
differential system that does base the price of milk largely on the 
proximity to Eau Claire.
  In fact, it was interesting. That is a fight that my predecessor has 
been fighting and so many men and women over the years have been 
fighting. The Agriculture Commissioner from your State, in Minnesota, 
pointed out that dairy farmers in Minnesota have become so frustrated 
with their inability to change that system that they actually think it 
might be easier to physically relocate the City of Eau Claire to the 
West Coast than actually making a reform to it. That is the Federal 
order system.
  But the second part of this, and it is a problem, as you rightly 
pointed out, which is equally bad, it is the problem of the compacts 
because the compacts do serve to create trade barriers between States 
and between regions, and Citizens Against Government Waste have 
calculated that the compacts are a major tax on milk that will drive up 
the cost of milk for so many consumers in this country.
  As my colleagues know, we are the most effective dairy producing 
region in the whole world in the upper Midwest, and yet because of the 
combination of the compacts, because of the combination of the compacts 
with the Federal order system, we are being punished for that very 
productivity which we have.
  And as the gentleman pointed out also, the dairy farmers in Minnesota 
and Wisconsin are not asking for any favors. They do not want favors. 
They do not want sympathy. They just want the chance to compete. They 
know that if they are given that equal chance to compete, they will 
succeed. They will succeed vis-a-vis farmers in America, but also 
farmers all across the world.
  That is all they are looking for, and in this land of opportunity it 
seems to be the least that we can do.
  Mr. GUTKNECHT. Mr. Speaker, if the gentleman will yield, talking 
about what this really ultimately costs to consumers as well, the 
estimate that we have of the cost of the compact to New England 
consumers has been $47 million.
  Now some people will say that milk is not a price-sensitive item and 
that, as my colleagues know, people, consumers will continue to drink 
about the same amount of milk regardless of the price. I am not sure I 
really believe that, and in fact I have had some of my friends at the 
Dairy Association try to tell me that. It seems to me that if you over-
price milk in certain regions of the country, the net practical effect 
is you are going to drive down consumption, and what we desperately, 
and one of the real problems with what I call the Balkanization, and we 
are having this war going on in the Balkans right now where that term 
came from, but basically what we have is Balkanization of the United 
States as it relates to milk.

[[Page H3588]]

  The real tragedy is the biggest war that is going on right now for 
the milk industry is this competition with the soft drink industry, and 
the soft drink industry is out there, and they are marketing and they 
are competing, and they are vicious on price and they are vicious on 
advertising, and they are constantly taking a bigger and bigger share 
of the beverage market, if my colleagues will, and at the very time, it 
seems to me, that the milk industry ought to be speaking with one voice 
and ought to be working together and figuring out how they can get a 
bigger market share relative to the soft drink industry, at that very 
time they should be working together. Unfortunately, we have all of 
these regions working against each other, and the net practical effect, 
of course, is that we continue to lose market share relative to 
CocaCola, Pepsi Cola, Mountain Dew and all of those other soft drinks 
that are out there competing particularly for the younger people's 
market.
  And so there are so many things that need to be said positively about 
the milk industry, the dairy industry, and unfortunately we spend so 
much of our time here in Washington fighting with each other over this 
regionalization of the way pricing is structured. It is a terrible 
mistake, and it has cost the consumers.
  Let me also add that, as my colleagues know, a lot of the argument 
for this system and even for the regional compacts has been that it 
will save small dairy farmers. Well, over the last 10 years we have 
lost something like 10,000 dairy farmers. As my colleagues know, if 
that is the definition of success, we cannot afford much more of that.
  What we really ultimately need to do is work together to find 
fairness, to find common ground, to work together to expand markets for 
our dairy products, and we are not just talking about fluid milk 
either. I think there is a tremendous market worldwide for cheese 
products and other dairy products which we can produce so well, so 
efficiently, with great quality here in the United States. But 
unfortunately, as I say, we spend too much of our time from a national 
perspective not looking for additional markets for our dairy farmers 
both here in the United States and around the world, but fighting 
amongst ourselves over this antiquated, Byzantine, unfair milk 
marketing order system.
  Mr. GREEN of Wisconsin. Mr. Speaker, I would like to pick up on 2 
points that the gentleman made.
  It is ironic that at this point in our history where as Americans we 
are so health conscious, we keep talking about dietary changes and the 
things that we should be doing especially for young people in trying to 
encourage good health practices, at that very time when we should be 
encouraging the free flow of milk all around the Nation and keeping 
milk prices low, we are actually reinforcing a system that does just 
the opposite. We are making milk a healthy, wonderful product. We are 
making milk more expensive than its counterparts. We are actually 
encouraging people to shy away from milk and to go towards such 
products as soda, and no one is going to say that soda rivals milk for 
health value. That is a great irony.
  Secondly, I know a lot of people out there listening tonight are 
saying to themselves, well, if the price of milk is going to go up, 
that is okay if it goes to help the family farm. Well, perhaps the 
greatest irony of all is that the compact system, the Federal order 
system, hurts the small farmer to the advantage of the corporate 
farmer. Every analysis I have seen shows that the lion's share of the 
value of any increase in the price of milk does not go to that small 
family farmer. Instead, it goes to the large corporate farm.
  Nothing against the corporate farms, but they are pushing the small 
farmer out, and again, as we put more and more of the means of 
production for dairy products in the hands of those large corporate 
farmers, we are losing control, and then one day when we only have milk 
being produced by a few, then we will truly see milk prices go up. We 
will have a true monopoly.
  So for those out there who are saying, ``I am willing to pay more if 
it helps the family farm in Minnesota or in Wisconsin,'' the sad 
reality is it does not. Instead it pushes them out of business. We lost 
2,000 dairy farms in Wisconsin last year, 2,000 dairy farms in 
Wisconsin the year before. We have lost 10,000 over the last 8 years. 
We have lost 50 percent of all dairy farms lost in the Nation over the 
last decade were lost in the upper Midwest in States like the 
gentleman's and mine.
  So, people may be thinking that they are helping out dairy farmers 
with these higher prices. The sad reality is they are not. They are 
not. If anything, they are accelerating the decline of the family farm, 
and that is a great tragedy.
  Mr. GUTKNECHT. Mr. Speaker, if the gentleman would yield, if you look 
at this purple section here, we are losing an average of three dairy 
farm families every single day, and as my colleagues know, as I said 
earlier, if the definition, if this program was designed to protect the 
small dairy farm, I mean by its very definition it has been an abysmal 
failure. We cannot afford to continue this policy much longer.
  And the gentleman is also exactly right that ultimately, 
unfortunately, unless we have some real reform of this system and at 
least have some fairness, and we cannot guarantee that some of these 
smaller dairy farmers are not going to go out of business. And I will 
be honest, some of them go out of business just because of quality of 
life.
  I mean there is nobody who works harder than that dairy farmer who 
gets up every morning at 5 o'clock to milk 60 cows and then has to 
repeat the process that afternoon. I mean it is one of the hardest 
lives that anybody can take on, but it should not be made unfair by a 
Federal milk marketing order system which penalizes someone just 
because they happen to be from the upper Midwest.
  Now in this great debate, and my colleague is going to learn the 
longer he is here in this business and in this city, when you talk 
about, and I do not even particularly like the term leveling the 
playing field. Actually I just like to talk about fairness. All we want 
is fairness. But many people will use the term ``leveling the playing 
field.'' The truth of the matter is, in any debate about leveling the 
playing field there is at least half of the people in that debate who 
do not want to level the playing field because they have an advantage, 
and they want to keep the status quo.
  But even in some of those areas where they currently have a huge 
advantage, like the Southeast and down in Florida, even into Texas and 
over into New Mexico, the further away you get from Eau Claire, 
Wisconsin, I think even those people have to acknowledge that at the 
end of the day milk ought to be treated like almost everything else, 
and it ought to be priced more or less based on what the market will 
yield.
  Now I am fully in favor of putting some kind of a minimum price under 
the floor of milk. In fact, I have introduced a bill this year to put a 
floor of at least 10.35.

                              {time}  2145

  I think there is a need to create some kind of a job absorber in case 
there are market aberrations which would drive the price of milk too 
low, but at the other end of the spectrum, part of the thing that 
happens with this also is in some respects, it keeps milk from going 
up. If one cannot expand markets, if one limits oneself in their 
ability to get into Asian markets with cheese and other dairy exports, 
ultimately one limits their ability to increase net farm income, and 
particularly farm income as it relates to dairy producers.
  So this is a bad system, a bad system for dairy producers. It is bad 
because it causes conflict among the regions when we ought to be 
working together. It is a bad system because it ultimately costs 
consumers in some areas more than they should have to spend for the 
milk that they buy, and it really has done almost nothing to protect 
the small dairy farmer.
  So from every perspective I think this has been an abysmal failure. 
The time has come, even though, as I said earlier, the plan that 
Secretary Glickman came up with is certainly not perfect; and frankly, 
on a net basis, we still lose under this plan, but we lose less than we 
are losing today.
  So those of us in the upper Midwest, from Wisconsin, Minnesota, parts 
of the Dakotas, we are prepared to accept the Secretary's plan. We 
think it

[[Page H3589]]

should be allowed to go into effect, and frankly, we think we should do 
what the Congress said 2 years ago and then again repeated last year, 
and that is to allow the compacts to expire.
  They were designed originally only as an experiment which would last 
a year, and part of that experiment was to find out if they could curb 
the number of small dairy farms that were going out of business. The 
evidence is in, the evidence is clear; they have not done that. They 
have cost consumers more money. They have increased the number of 
corporate farms on every front; in my opinion, the compacts have been 
an abysmal failure.
  We should allow them to do what the agreement originally was, which 
is just keep all ends of the bargain, move ahead with the dairy reform 
that Secretary Glickman has come out with, and end these crazy compacts 
and do not expand them to other States.
  Mr. GREEN of Wisconsin. Mr. Speaker, I thank the gentleman. The 
gentleman has been fighting this fight a lot longer than I have, and I 
applaud his efforts.
  I guess, just to wrap up and summarize, as the gentleman has pointed 
out, Secretary Glickman's order is not perfect; and for those of us in 
Minnesota and Wisconsin, we would argue it is far from it, and it is a 
very small, modest step. But at least it is a step in the right 
direction.
  It recognizes that the long-standing system, standing since 1937, of 
Federal orders and compacts is bad for farmers, driving our family 
farms out of business; it is bad for consumers because it inflates the 
costs of milk, it adds a milk tax in so many ways; and finally, it is 
counter to free enterprise, free enterprise not just in the 
manufacturing sector, not just in the service sector, but even in the 
agricultural sector. It is the only agricultural product treated like 
this.
  So it is bad on all counts. It is time to make a larger change, but 
at least to support Secretary Glickman's proposal, let that come on 
line, make a small but positive step and offer some hope to our 
farmers.

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