[Congressional Record Volume 150, Number 83 (Wednesday, June 16, 2004)]
[Senate]
[Pages S6888-S6889]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SPECTER (for himself and Mr. Schumer):
  S. 2525. A bill to establish regional dairy marketing areas to 
stabilize the price of milk and support the income of dairy producers; 
to the Committee on Agriculture, Nutrition, and Forestry.
  Mr. SPECTER. Mr. President, I join today with nine of my colleagues 
to introduce the National Dairy Equity Act (NDEA), legislation intended 
to substantially reduce Federal expenditures for the dairy industry and 
allow for more local authority to regulate milk prices in a particular 
area. Members of the House of Representatives have introduced similar 
legislation with 20 cosponsors.
  This legislation would establish a voluntary, national program that 
permits producers and consumers, acting through Regional Dairy 
Marketing Area (RDMAs), to establish minimum prices for Class I fluid 
milk, which is intended to stabilize the price of milk. Although the 
June 2004 Class I fluid milk price is $18.40, the true impetus for this 
legislation is based on the April 2003 price of $11.89, the lowest milk 
price in the last 25 years as of October 1978. The recent rise in milk 
price, while certainly welcome, gives only a temporary respite from the 
low prices of the past five years that have threatened the survival of 
thousands of dairy farm. In Pennsylvania alone, since 1999, 1,100 dairy 
farms have fallen victim to the battle over milk pricing.
  Since last spring, I, along with my colleagues in both the Senate and 
the House representing the Northeast, South and Midwest, have held 
monthly meetings to address this dire situation faced by the dairy 
industry. Additionally, I have worked with Pennsylvania Department of 
Agriculture Secretary Dennis Wolff, the Pennsylvania Dairy Task Force, 
which represents Pennsylvania's 9,900 commercial dairy farms, and have 
assembled a working group of 24 Pennsylvania dairy farmers for their 
input, while holding eight forums in Pennsylvania discussing the merits 
of the legislation I present today.
  Under the NDEA, five RDMAs would be established; three of these 
RDMAs, the Northeast, the South, and the Midwest, would be 
automatically deemed

[[Page S6889]]

as participating States, but there is a mechanism for any State to opt 
out. The States within the other two regions, the Intermountain and the 
Pacific, can opt into the program. Ultimately, the NDEA overcomes 
previous inter-regional objections to similar plans because it permits 
regions with low Class I utilization to receive the same benefit as 
higher regions, and does not require national pooling of money between 
the various regions.
  Within each RDMA, a board, representative of both farmers and 
consumers, would be appointed by the U.S. Secretary of Agriculture 
exclusively from lists of nominees provided by the Governors, Ag 
Commissioners in which they are elected officeholders. The RDMA boards 
would distribute the payments to the farmers in their regions and would 
also have the authority to conduct supply management, including the 
development and implementation of incentive-based supply management 
programs.
  Specifically, this legislation would allow states that do not wish to 
participate in the NDEA to continue participating in the current Milk 
Income Loss Contract (MILC) program, which would be extended to 2007 to 
coincide with the reauthorization of the Farm Bill. The MILC program is 
set to expire at the end of September 2005. Although I supported the 
MILC program when it was offered in the 2002 Farm Bill, I am aware that 
the MILC program is delinquent in providing a producer (farmer) 
referendum within a region; especially in the Northeast, to establish a 
regulated over-order price.
  Equally, I am concerned about the cost of the MILC program. Since 
2002, this program has cost the Federal Government nearly $1.65 
billion, when it originally scored at only $1 billion from 2002 to 
September 2005. If enacted, the NDEA will reduce government spending by 
90 percent in the Northeast, 100 percent in the South and 65 percent in 
the Midwest. Nationwide, this is a cost savings of nearly $700 million, 
roughly $200 million per year from enactment until 2007.
  More specifically in Pennsylvania, the MILC payment program is 
costing the Federal Government roughly $44.2 million, which is 
dispersing payments to 8,300 dairy farms with herd sizes of roughly 100 
cows or less. Under the NDEA, this cost to the Federal Government would 
be reduced by 90 percent, and would ultimately pay $35 million more to 
these farmers for a total of $78.6 million because the maximum price 
for milk would be capped at $17.50, national pooling under the MILC 
payment would be eliminated and better supply management techniques 
would be put into place.
  Finally, this legislation clearly does not model a dairy compact 
because unlike a compact, the NDEA establishes a cap of $17.50 per cwt, 
hundredweight, on maximum Class I price, which could increase in 
succeeding years based on Consumer Price Index (CPI), Additionally, 
this legislation equalizes payments producers receive by establishing a 
50 percent Class utilization payment for all regions thereby not 
placing low Class I utilization areas at a disadvantage, ultimately 
establishing a level playing field. The NDEA provides for federal 
authority for the establishment of five RDMAs, and establishes a 
central dairy producers payment fund at the Federal level that would 
transfer processor payments and if necessary CCC funds back to each 
RDMA in order to equalize all payments among regions.
  As we continue to celebrate National Dairy Month, I urge my 
colleagues to cosponsor and support this timely legislation, which 
would help reduce the Federal deficit and would tighten the huge gap 
that exists in the stabilization of the milk price for the betterment 
of our nation's dairy industry.
                                 ______