Showdown looms over milk price controls

WASHINGTON – Senators headed for a showdown over dairy policy as a committee chairman pledged Wednesday to do everything possible to preserve a system that sets milk prices in New England.

The New England dairy compact is set to expire Sept. 30 unless Congress agrees to extend it.

Sen. Patrick Leahy, D-Vt., who chairs the Senate Judiciary Committee, told the panel such regional price-fixing systems are the most sensible and workable way to assist dairy farmers.

Some dairy producers want Congress to expand the regional controls to include most of the Northeast and create a similar system in the South for milk.

However, farmers in major dairy states of the Midwest and West want regional controls abolished entirely, saying they encourage overproduction.

Milk processors and consumer advocates say fixing dairy prices to benefit farmers hurts the poor and discourages people from drinking milk.

Any legislation that would preserve the New England system “will definitely be filibustered,” said Mike Torrey, a lobbyist for the International Dairy Foods Association.

He said there were at least 40 senators – more than enough to sustain a veto – opposed to dairy compacts.

Leahy declined to discuss his plans for passing the compact extension. “We have some, but I’m not broadcasting them,” he said.

“We’re going to do everything possible” to pass the extension by Sept. 30.

There are at least two must-pass pieces of legislation he could use: the Agriculture Department’s 2002 appropriations bill and a bill that provides emergency assistance to farmers.

Both measures are supposed to be signed into law by Sept. 30, the end of the federal fiscal year.

Legislation introduced earlier this year in the Senate would add Delaware, Maryland, New York, New Jersey and Pennsylvania to the Northeast compact.

A new Southern compact proposed in the bill would comprise Alabama, Arkansas, Georgia, Kansas, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee, Virginia and West Virginia.

Additional compacts could be set up for some Western states, including California, Oregon, Washington and Colorado.

“The dairy farmer is at the mercy of irrational market forces,” said Sen. Arlen Specter, R-Pa., who wants to expand the compacts.

The legal authority for the price-setting systems is based on a clause of the Constitution that forbids states from entering compacts or agreements with each other without congressional approval.

The Judiciary Committee’s senior Republican, Utah Sen. Orrin Hatch, said dairy compacts amount to “economic protectionism” that the Constitution’s authors were trying to prevent.