[Congressional Record Volume 147, Number 90 (Tuesday, June 26, 2001)]
[House]
[Pages H3608-H3612]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
OPEC OF MILK
The SPEAKER pro tempore (Mr. Shuster). Under the Speaker's announced
policy of January 3, 2001, the gentleman from Wisconsin (Mr. Green) is
recognized for 60 minutes.
Mr. GREEN of Wisconsin. Mr. Speaker, we will not take all that time
this evening, but I wanted to talk about a subject that probably many
people out there tonight have never heard of yet and, I would suggest,
adversely affects millions of people.
It is something that was recently described by the Wall Street as the
OPEC of Milk. It is a price-fixing cartel for milk that hurts families
all over the country, especially those who are least able to pay for
it.
The history of the OPEC of Milk, the Northeast Dairy Compact, is
somewhat interesting. Back in 1996, a small group of New England
Members of Congress formed something called the Northeast Dairy
Compact. The way it was authorized was not to bring it to the floor of
the House or to the floor of the Senate for a vote, but, instead, they
were able to sneak it into a conference committee report under an
appropriations bill.
Now, their intentions were sound. They believed back in 1996 that
this cartel that they created, the Northeast Dairy Compact, would, in
their words, help stop the loss of family farms in six New England
States by guaranteeing a minimum price for milk. That sounds harmless
enough. I was not here at the time, but had I been, those sentiments
are certainly ones that we all could have supported.
I would suggest to you, Mr. Speaker, and to those who are listening
tonight, that those good intentions went awry a long time ago, and that
the OPEC of Milk has done tremendous damage not only to our dairy
system and to dairy farmers in New England and all over the country,
but also to so many families who are trying to afford the great
nutrition that we have in our dairy products.
The reason that this is so timely is that the Northeast Dairy Compact
is due to expire in September of this year. This compact clearly could
not stand on its own merits, and so we have had some of its strongest
supporters, particularly Senator Jeffords over in the Senate, saying
that he understands how unpopular it is. He implicitly understands how
bad it is, but he has said that he is bound and determined to get this
reauthorized, passed in September no matter what it takes.
In fact, he told the Associated Press not 3 months ago that his goal
would be to ``sneak it in through the stealth of the night. And to get
it through when people are not looking.''
Mr. Speaker, the Northeast Dairy Compact should die a peaceful death
in
[[Page H3609]]
September. First, it has not met its goal. It has not stopped the loss
of family farms, not even in the New England States that are part of
this compact.
Second, as we will talk about tonight, the Northeast Dairy Compact
has raised the price of milk to consumers. It is what so many people
have called a milk tax.
Third, the Northeast Dairy Compact has accelerated the loss of dairy
farms in other States, States like mine, Wisconsin, States like
Minnesota, those whose States together have the largest number of dairy
farms in the Nation.
Finally, and perhaps, in my view, most damaging, the Northeast Dairy
Compact has prevented us from dealing with our dairy problems on a
national basis, and we do have tremendous problems in the dairy sector.
We are losing dairy farms each and every day, and we must do something,
but as long as we have a policy like the Northeast Dairy Compact, which
pits State against State, region against region, farmer against farmer,
we will not get that national policy.
Mr. Speaker, I think it is important to understand clearly I have an
interest in this. I come from America's Dairyland of Wisconsin, but it
is not just me, not just those in Minnesota and Wisconsin who believe
that the Northeast Dairy Compact is an abomination. It is others,
analysts, journalists.
Mr. Speaker, I will read from a few, the Wall Street Journal recently
said not 2 weeks ago that compacts are ``basically a highly regressive
tax on milk drinkers, starting with school-aged children, creating them
is a tacit endorsement of the OPEC cartel.''
There is the Consumer Federation of America, hardly a biased group,
hardly a Republican group or hardly a Midwestern group, the Consumer
Federation of America, which represents over 50 million consumers
nationwide said not a month ago that regional dairy compacts give too
much money to farmers who do not need the help, too little money to
farmers who do need the help, and they asked consumers, especially the
low-income consumers, struggling to feed their families and pay the
rent to pick up the tab.
There is Americans for Tax Reform, which refers to compacts as dairy
cartels.
There is the New Republic Magazine, which said that the Northeast
Dairy Compact was ``a system that can best be described as socialism.''
There are groups like the Council for Citizens Against Government's
Waste, which says that this is a regressive milk tax on Americans; or
the National Taxpayer Union, which said that the Northeast Dairy
Compact is ``a cartel that only a robber baron could admire.''
So it is not just folks from States like mine, Wisconsin. It is
consumer groups, journalists, people really across the country, across
the spectrum, who realize that the Northeast Dairy Compact was a bad
idea. It has not gotten any better, and it should die a peaceful death.
Mr. Speaker, the gentleman from Minnesota (Mr. Kennedy) is my good
friend, and in his brief time here in the House has become a wonderful
voice for dairy farmers in Minnesota. He is a true leader who I think
is going to be a tremendous asset to all of us as we try to reform this
outdated dairy system.
Mr. Speaker, I yield to the gentleman from Minnesota (Mr. Kennedy).
Mr. KENNEDY of Minnesota. Mr. Speaker, I thank the gentleman from
Wisconsin (Mr. Green) for yielding to me and thank the gentleman for
his leadership on this very important issue.
People may ask, how did this ever come about? How did we get this
dairy compact? The gentleman gave a little bit of the history, but the
U.S. Constitution does allow States to enter into compacts upon passage
of State laws and the consent of Congress. These consents have been
granted in some cases to allow States to work together on parklands or
transportation systems or waterways; however, there is no precedent for
price-fixing compacts evidenced in this situation.
This is the only case where we have allowed a region of the country
to set a price-fixing compact against other regions of the country, and
how this affects us is if you have excess production of milk that you
do not drink with cereal or otherwise, you generally turn that into
cheese. So if there is excess production in the Northeast, they convert
that into cheese.
For those major milk-producing States that include Minnesota and
Wisconsin, but California, Idaho, Arizona, several others, that takes
away from our cheese market. In fact, the Northeast Dairy Compact was
fined $1.76 million in 1998 for the extra amount of money that the USDA
had to consume in buying extra production coming out of the Northeast.
They have since instituted just recently some type of supply
management in the Northeast, but if you think of how un-American this
is, let us just say we decided that we do not think that Michigan
should be disproportionately producing so many cars, so we are going to
have, the rest of the country, a non-Michigan auto compact where we are
going to produce the autos we need outside of Michigan and let Michigan
only produce the cars that they can use in Michigan.
{time} 2145
Orange juice. What if we decided that we are going to have an other
than Florida oranges compact where we are going to produce our own
orange juice and let Florida just produce the amount of orange juice
that they can consume in Florida. Or movies in California. Or you can
go on and on and on.
I mean, this is ridiculous. It is un-American. It undermines where we
have been strong in the past and what has made America strong in the
past; that we are one country, that we do not have divisions among
States. Our Founding Fathers were very nervous about that happening.
Why we would let this happen and undermine our strong dairy industry
in Minnesota, Wisconsin, the upper Midwest and other States around the
country is something that is beyond me.
It is something that, if American people understood this issue, they
would be against it. If they understood, not just that they were being
taken advantage of as consumers, but that one area of the country is
going and pitting against another area of the country's strength, they
would be uprising and saying we want to end this. Certainly we do want
to end this.
I appreciate the gentleman from Wisconsin (Mr. Green) reserving this
hour to make sure that we can help educate the American people on this
subject.
Mr. GREEN of Wisconsin. Mr. Speaker, I thank the gentleman for his
comments. I think that the gentleman has pointed out what may be really
the greatest tragedy from the Northeast Dairy Compact. Nobody wants to
help dairy farmers more than I or the gentleman from Minnesota (Mr.
Kennedy). I mean, we come from dairy States which had the largest
number of dairy farmers.
It is interesting, when we were debating dairy policy last year in
this House, some of my colleagues from the northeast States got up and
talked about how many dairy farms that their home States, their home
districts have lost. I remember a good friend of mine from the
northeast exclaim that his State had lost some 200 dairy farms last
year.
I would like to put things into context for a moment. In my home
State of Wisconsin, by this time tomorrow, by a quarter to 10:00
tomorrow night, Wisconsin will have lost four more dairy farms. We are
losing four dairy farms each and every day. Over the last 10 years, we
have lost 13,000 dairy farms. In fact, we as a State have lost more
dairy farms than any other State ever had save the State of the
gentleman from Minnesota (Mr. Kennedy).
So no one, no one wants to do more for dairy than those of us who
represent States like Minnesota and Wisconsin. But we understand that
to fix dairy problems, to meet the challenges, to be successful, to be
compassionate, we have to have a national dairy policy, one that works
all across America.
The Northeast Dairy Compact rewards some dairy farmers. In fact, it
encourages them to overproduce and harms others. It pits farmer against
farmer, State against State, region and region. That cannot be good.
As I talked to farmers in my home State and dairy farmers from all
across America, they understand that one cannot have a policy that pits
farmer against farmer. We cannot meet our challenges if we are divided
and fighting amongst ourselves.
[[Page H3610]]
The system that the gentleman from Minnesota (Mr. Kennedy) described
is Stalinesque. I mean, I think the problem that we have had, so many
of us who are so opposed to the Northeast Dairy Compact, is that, when
we tell people how bad it is and we describe how it is set up, they do
not believe us. They do not believe that, in America today, you could
have such an absurd, illogical, irrational system. I am afraid, Mr.
Speaker, it is true. Believe it or not, we do have such a system. It
makes no sense. It does not work. It is, to put it kindly, a great
distraction as we should be taking on so very many important issues.
Mr. Speaker, I yield to the gentleman from Minnesota (Mr. Kennedy).
Mr. KENNEDY of Minnesota. Mr. Speaker, I would like to say that this
dairy compact is kind of like salt in the wounds that are already being
put in place by an underlying milk marketing system that, again, hurts
the natural dairy producing States of this country.
When in the 1930s we implemented milk marketing orders, that was
designed to make sure that fresh milk was available all over the
country. It may have made sense back then; but right now, it divides
milk into four classes, all of which receive a different price.
The class 1 milk which we drink out of our glass gets 33 percent or
more higher price than what we make in the cheese. Since we are
primarily exporters of dairy, we convert about two-thirds of our
production in our region into cheese; and, therefore, our farmers
receive more than a third less already, just setting the dairy compact
aside, for our milk production than those like the northeast that are
producing primarily for fluid, milk.
So we are already being penalized by an archaic system that we have
not been able to overcome because of the resistance of people in the
northeast. We are already being penalized.
Then when they have one down, the dairy compact is really piling on.
It is piling on and saying, okay, you know, you are already only
getting 60 percent of what we get, but that is not enough for us. We
want more. We want to take more out of your income. We want to take
more of your dairy farmers and put them out of business. We want to try
to prop up what we have.
It really has not had that beneficial impact. They are still losing
family farms in the northeast area. They are still not really having
the benefits that they speak of at the same time that they are clearly
penalizing us.
As the gentleman mentioned, Minnesota and Wisconsin. Many of the
people I know, I live in a rural area of Minnesota called Watertown
where there are many dairy farmers that go to our church. I could name
off names of dairy farmers in the last year that I know that have gone
out of business. The milk marketing orders and the Northeast Dairy
Compact are to blame for that.
The gentleman's father, I know, is in the medical profession; and the
first rule they learn is to do no harm. It would be good for us as
legislators to know, to do no harm.
Well, this is clearly something that harms Americans, harms millions
of Americans, favors a very small few, and it is something that we
should stand up against. It is something that Americans should stand up
against.
Write your Congressman wherever they may be and say this is something
I do not believe in. This is something that undermines everything that
I believe about America.
I ask my colleagues to oppose the dairy compact because this is just
the northeast now, but I have a map here of those areas that want to go
into dairy compacts. It includes just about every State in the country
that is not a producer of dairy over and above their own needs. It
includes everything other than just about Minnesota, Wisconsin, Idaho,
California, other large dairy producing States.
Again, I go back to my examples of cars outside of Michigan, citrus
outside of Florida, movies outside of California.
What if one decided that one cannot do financing, we put a wall
around New York and say all of the financing outside of New York has to
be self-sufficient, and, therefore, New York can only finance New York.
Do my colleagues know what would happen to Manhattan Island that could
only finance loans that were being used on Manhattan Island? That is
what kind of an effect this is having on Minnesota and Wisconsin and
our other natural dairy States.
As the new republic says, this is a situation where we are penalizing
those areas that are most suited to dairy farming. They received the
lowest payments for their milk; and those from the least efficient
regions received the highest. The system, by design, punishes the
efficient farmers and rewards inefficient ones. This is not the way
that America becomes strong and stays strong.
I urge our Members to vote against the dairy compact. I urge voters
to contact their legislators and express their views on this very
important subject.
Mr. GREEN of Wisconsin. Mr. Speaker, I thank the gentleman; and he
has made some great points. In our States of Minnesota and Wisconsin,
we have a lot of dairy farmers though the numbers are obviously
dwindling. But our dairy farmers, they know they are in a tough
profession. They are in a tough way of life. The hours are long. They
do not have vacations. One has got to milk every day.
All they are asking for is a chance to compete. The dairy farmers I
talk to say, look, you know, we understand this is a tough business.
Give us a level playing field. We will compete with any dairy farmers
in the world.
The problem is that, with the Northeast Dairy Compact, we do not give
them that fair chance to compete. We set them up to fail right off the
bat; and that is wrong.
Can my colleagues think of any other commodity that we treat like
that? The gentleman from Minnesota (Mr. Kennedy) has just run through
some of the examples of how crazy it would be. But not just the compact
and the milk marketing orders. Think about our pricing system that we
take milk, and we offer a different price to farmers based upon the use
down the line of that product. That does not make any sense. I mean, it
is the same cows. It is the same fluid. Yet, we treat it differently.
In States like Minnesota and Wisconsin, because so much of our milk
goes into manufactured dairy products, again, our farmers are losing.
As I began this evening, I said that, when this system was created,
and it was, again, sort of slipped in in the dark of night in a
conference committee report, it was done by some Members who really had
the best of intentions. They wanted to reverse the decline of dairy
farming in New England. But the sad news is it has not worked.
So I would appeal to my friends from the northeast to reexamine their
support for the Northeast Dairy Compact, because if they believe that
we need to take action to help dairy farmers, this is not it.
The Boston Globe last year did a really interesting study. They
studied the States of Massachusetts and Vermont, and they looked at the
effect of the Northeast Dairy Compact. Their study showed that, in the
2 years before the Northeast Dairy Compact was concluded, the State of
Massachusetts lost 34 dairy farms and the State of Vermont lost 117.
Interestingly, though, in the 2 years after the compact went into
effect, the State of Massachusetts lost 44 dairy farms, 10 more, and
the State of Vermont lost 153. The compact is not working. In fact, the
loss of dairy farms is accelerating.
It is interesting. If one goes beyond those two States to the entire
New England region, one will see that 25 more dairy farms went out of
business after the compact than in a comparable period before the
compact.
What may be most painful of all and really distressing, since the
most vulnerable dairy farms in America today are the smaller ones, 50
cows or less, the compact has actually accelerated decline in those
farms, the small farms, those that are most vulnerable.
The Consumer Federation of America said recently that, because
compacts pay farmers on a per-gallon basis, most of the benefits of
this fixed price that they have go to the larger farmers who do not
really need it.
I heard earlier this evening the gentleman from Vermont (Mr.
Sanders), who loves to talk about how we should be on the side of the
little guy, he talks about how corporate interest dominate this
Congress. Well, the gentleman
[[Page H3611]]
from Vermont (Mr. Sanders), my good friend, if he wants to help the
little guy in dairy farming, abolish the Northeast Dairy Compact. It
punishes the family farm. It makes it worse. It makes it harder for
them to get by, and it rewards the largest farmers.
So even if this started with noble intentions, the reality, the stark
reality is it has not worked. It is time to end it. It is time to go to
a nationwide policy that does not pit farmer against farmer. It is time
for a national policy that works.
Mr. Speaker, I yield to the gentleman from Minnesota (Mr. Kennedy).
Mr. KENNEDY of Minnesota. Mr. Speaker, I would just say that we are
going to be debating foreign trade and giving our President trade
promotion authority coming up here very soon. We know, many of us know
the benefits that we receive from trade.
Classic economics would teach us that, if we can do something better
than someone else, and we each do what we do best, we all benefit. We
all benefit from having lower cost of goods. We all benefit from higher
employment, higher income levels. The increased prosperity around the
world has really sprung from countries opening up their markets and
each focusing on what they do best.
{time} 2200
If foreign trade is so beneficial to the world, if opening up markets
with other countries is so beneficial to us, why should we have open
markets with Europe, with Asia, if we cannot even have open markets
with Vermont? Again, I have to go back to what you have said. When you
tell people about this, they cannot believe it. We are used to being
pitted against each other when the Packers play the Vikings, and we are
used to having our rivalries; but we all come together when it comes to
singing that national anthem at the beginning of our games. This does
in a nonsportsman-like fashion pit one region of the country against
the other in a very unfair way that undermines one region's strength
and subsidizes another region that does not have those natural
strengths when in fact they have natural strengths that are still
benefiting them, but they are not letting us benefit from our natural
strengths.
Again, this is something that I implore our colleagues to do
everything they can to oppose and certainly we will continue to try to
spread the message across the land, that this is something that is un-
American and should not be supported.
Mr. GREEN of Wisconsin. The gentleman from Minnesota is right that
our two States have football teams that are great rivals. I guess the
Northeast Dairy Compact would be like giving the Packers an extra
player. Maybe we deserve it, but that is another debate. I think,
though, that my good friend and colleague brought up a very important
point when he talks about free and fair trade and the great emphasis
that we are placing as a Nation and a people on opening up markets and
on trying to promote free and fair trade. I think we understand the
importance of commerce and growing this economy. But does it not seem
just a tad hypocritical as we send our trade representative, even our
President, all around the world and we ask, we demand, that he works to
lower trade barriers, at the very time when we are trying to demand
that these countries drop their trade barriers, have no tariffs, allow
for the free flow of our goods, we have barriers between our own
States? We have tariffs between our States. How can we in all
seriousness look our trading partners in the eye and tell them that
they have to do more to open up their markets to our goods when it
would be so easy for them to say, Mr. President, why is it that in
dairy, you have barriers between your own States? It makes no sense.
And at a time when we are trying to open up markets, how can we be
restricting markets in our own country?
One other area I would like to touch upon briefly tonight, and I
appreciate the indulgence of the listeners tonight, I come from a dairy
State, the gentleman from Minnesota comes from a dairy State, this is a
matter of great interest to him, of great interest to so many families
who live and work in the dairy sector; but even if you are not part of
the dairy sector, even if you are not from a dairy State or even an
agricultural State, this will affect you.
A recent study suggested that consumers in the Northeast Dairy
Compact States are overcharged for the price of milk by about $100
million each and every year. The price of milk is artificially high as
a result. It is interesting. Many of our colleagues want to expand the
New England compact, they want to expand it and create a southern
compact. One study suggests that if a southern compact is created, it
would raise the price of milk by at least 15 cents a gallon. It would
cost consumers $500 million a year at the very least. That is a
conservative, modest estimate.
The Northeast Dairy Compact is a tax on milk. It raises the price of
milk. It takes one of our most nutritious products, one of the best
things that you can possibly give to children to ensure that they have
the nutrition to grow strong and fast, and it raises the price. It not
only raises the price of milk, but it damages the very nutrition
programs that we are struggling so hard to find money for. Families
with low incomes who utilize food stamps, Meals on Wheels, the dollars
that we spend for those terribly valuable programs do not go as far
because of what we have done to the price of milk. We are discouraging
people from consuming milk, and we are making milk more expensive for
those low-income families. That is outrageous. Even if you are not from
a dairy State, even if you are not from an ag State, you cannot support
a tax on milk. You cannot support taking one of our most nutritious
products and making it less affordable. It is just wrong. We cannot do
it. We must not do it. It is the wrong thing to do, and it is something
that must end.
I implore our colleagues from all around the country, we represent
diverse districts, but whether you come from an ag district or not, end
this outdated, foolish experiment. It has not worked. It has done so
much damage. It has cost so many farmers their livelihoods. It has made
milk so much more expensive. It is time to end it. It is time for it to
expire. It is time for us to develop a national dairy policy. We can
develop a policy that rewards farmers for what they produce, that
creates competition, that raises the amount that they receive but keeps
the price to consumers low and affordable. We can do it if we come
together.
I appreciate the gentleman from Minnesota so much for joining me this
evening. I offer him the opportunity if he has any final thoughts that
he would like to share.
Mr. KENNEDY of Minnesota. I will just close by saying the gentleman
has talked about the broader sense of consumers, how this is hurting
consumers. But this is an example, an unprecedented example of the
tyranny of a minority by the majority. Those who believe in our
government, those who believe in civil liberties should not idly look
aside and watch where one region of the country, just because we have
fewer congressional votes here in the upper Midwest, can be penalized
by another area of the country without really repute. Again I must
emphasize as I began and leave as I began, when I talked about no other
case is there where a State compact has been a allowed to create the
cartel, the OPEC that you opened with and have price-fixing and get
away with it. This sets a very bad precedent for any number of other
things that can come to a State near you and hurt your local economy,
hurt your consumers and undermine the very freedoms and civil liberties
upon which this country was based and is based.
Again, I thank my colleague from Wisconsin for the leadership that he
has taken on this issue. I pledge to work with him and our other
colleagues around the country that believe very strongly that this is
wrong, that this ought to be opposed. We implore our listeners and our
fellow colleagues to really dig in and understand this and really
understand how this is undermining America.
Mr. GREEN of Wisconsin. I appreciate the great work of the gentleman
from Minnesota in this area. Again, he may be a new Member; but he is
already showing great leadership, particularly in agricultural issues,
and I know the issues that are important to rural Wisconsin.
I guess to summarize, what we have started tonight, Mr. Speaker, we
hope
[[Page H3612]]
is an important stride in an educational effort to help our colleagues
here in this institution and the people around America to understand
what this bizarre thing called the Northeast Dairy Compact really is,
what has been called the OPEC of milk. It is bad because it raises the
price of milk, it is bad because it does not work, it does not prop up
the dairy farms of America. In fact, it accelerates their decline. Do
not take our word for it. You can listen to groups like the Wall Street
Journal or the Consumer Federation of America or Americans for Tax
Reform, the New Republic Magazine, the National Review. How many times
do you get the New Republic and the National Review to agree on
something? Citizens Against Government Waste, the National Taxpayers
Union. Group after group after group has said to us and we are saying
to you, this is wrong, it is bad public policy, it is time for it to
end so we can move forward.
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