Dairy panel ponders life after Jeffords defection

WENHAM, Mass. – When U.S. Sen. Jim Jeffords announced he was leaving the Republican Party last month, the phone of Northeast Dairy Compact Commission executive director Daniel Smith rang off the hook.

The compact, a favorite of Jeffords, was now an obvious target for angry Republicans seeking retribution. Callers wanted to know, “Is the compact finished?”

The answer Smith gave then hasn’t changed. “I don’t know.”

Jeffords’ move has put Democrats in key Senate positions to boost the compact, which subsidizes milk prices to protect dairy farmers.

The compact is set to expire in September unless Congress renews it.

“We don’t have any reason to believe we have the issue resolved,” said Leon Graves, commissioner of Vermont’s pro-compact Department of Agriculture. “[But] I would not suggest for a minute that the compact is dead.”

The commission met Wednesday for the first time since Jeffords’ defection. Among its moves was the re-appropriation of $80,000 for an impact study to be used by pro-compact lobbyists. They’ll be opposed by dairy processors and consumer groups, which argue the compact is nothing more than an unfair “milk tax” that disrupts the free market and doesn’t really work.

The compact, which includes the six New England states, was established in 1997. If the wholesale price of milk per 100 pounds falls below $16.94, dairy farmers are paid the difference. The cost is borne by consumers and milk processors.

The states of Delaware, Maryland, New Jersey, New York, and Pennsylvania hope to join the Northeast compact. Fourteen Southern states want to form their own compact.

Howard Traister of the Sunshine Dairy Farm in Newbury said the compact helps him break even at his third-generation farm, where he has 80 milking cows. Without the compact, he said, “It would probably mean going out of business.”

Proponents said the consumer doesn’t pay much to cover the compact – about 4.5 cents a gallon according to a recent University of Connecticut study – but gets benefits such as a local milk, which they say is healthier and ultimately cheaper than milk shipped across several states.

Opponents say the compact actually costs consumers about 18 cents per gallon. Art Jaeger of the Washington D.C.-based Consumers Federation of America said it doesn’t work as intended because it pays farmers per gallon, so the most benefits go to larger farmers who don’t need it.

Meanwhile, officials from milk-producing Midwestern states say the compact creates a competitive disadvantage for them.

With the Jeffords defection, Sen. Herb Kohl, a Wisconsin Democrat and staunch compact opponent, will become chairman of the agricultural appropriations subcommittee of the Judiciary Committee, which has jurisdiction over dairy compacts. It’s a concern to compact supporters who are also wondering about Republican backlash.

“We have 49 senators who now have a great reason to oppose anything important to Senator Jeffords,” Graves said.