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Vermont Senator James Jeffords bolted the Republican party, tossing
control of the U.S. Senate to the Democrats, he brought with him
his pet issue, dairy compacts, which assures there will be more
"switches" in Washington. Consider Senate Majority Leader
Tom Daschle's position on dairy compacts. He's on record as saying
he "opposes compacts in any form." But that was before
Jeffords made him Senate Majority Leader. Now Daschle has made a
pledge to Jeffords that when the Northeast Interstate Dairy Compact
expires next month, Daschle will deliver at least a temporary extension
— by parliamentary sleight-of-hand if necessary.
That won't
be the first time. Daschle is playing the role that then-Majority
Leader Trent Lott (R., Miss) played in October 1999, when Jeffords
convinced Republicans he faced a tough reelection the next year,
and that his chances were nil without delivering an extension of
the dairy compact to his farmers. Ironically, Jeffords reasoned,
Republican control of the Senate was on the line. Thus Lott assured
the compact was extended by burying it deep in a must-pass appropriations
bill — despite Daschle's protests. Jeffords won reelection, and
the rest is history.
But what is
this dairy compact around which such high-stakes politics turn in
Washington? It was created by the 1996 farm bill. In concept, it
was intended to be a temporary measure to tide over dairy farmers
in the six New England states until a more comprehensive national
dairy policy reform — unachievable during the farm bill debate —
was crafted. The compact empowers an appointed commission to effectively
set the minimum farm gate price that bottlers must pay for beverage
milk. This price-setting power even applies to milk entering from
states outside the compact, establishing a sort of economic Maginot
line around the region.
But what started
as a temporary means to help New England dairymen — who supply about
three percent of the nation's milk — now could cover half the country
permanently. A total of 25 states are scheduled to either join an
expanded Northeast Compact, or become part of the proposed 14-state
Southern Compact — part of the effort to gain more political support
in Congress.
Despite this
push to expand the concept, the Northeast Compact has largely failed,
even by its own standards. The States Ratification Committee, a
self-described "grass roots coalition of state departments
of agriculture and farmer organizations" that lobbies for an
extension of the Northeast Compact and for the creation of a Southern
Dairy Compact, argues that "experience has shown that Dairy
Compacts are the best safety net available to farms." Yet,
in the two years after the Northeast Compact was established, about
30 percent more New England dairy farms — many of them small farms
— closed down than during the two years before it.
Not surprisingly,
consumers fare no better than small farmers, though their interests
are supposed to be voiced by representatives on the compact commission.
One look at the list of so-called consumer representatives, however,
betrays their agenda. Representing consumers on the Northeast Compact
Commission are: the commissioners of agriculture for the state of
Massachusetts and Rhode Island, the executive director of the Rhode
Island Farm Bureau, and a professor from the University of New Hampshire's
school of agriculture. In addition to these unlikely consumer watchdogs,
is the administrator of the Women, Infants, and Children (WIC) program
in Massachusetts; WIC is the only government program which, by law,
must be reimbursed for the higher milk prices it is forced to pay
under the compact. In short, none of these five commissioners truly
represents the milk consumer.
According to
the Northeast Compact Commission, part of the purpose of their compact
is "to assure consumers of an adequate, local supply of pure
and wholesome milk." With an expansion in the offing, that
proposition is laughable. Consider, Maryland would be part of the
Northeast Compact. Virginia, part of the Southern Compact. Thus
communities which lie only a few hundred yards apart on either bank
of the Potomac will, by federal law, be in different "local"
markets. The price of the milk sold in Bethesda, Maryland will be
tied to milk prices in Bar Harbor, Maine. The price of the milk
sold in Falls Church, Virginia will be tied to the price of milk
in Cherokee, Oklahoma.
Moreover, the
compact is a drain to most state economies. Because the Northeast
Compact provides for a minimum price for milk, Massachusetts milk
drinkers, for example, have paid upwards of $53 million more for
milk. Yet, nearly 85 percent of that milk price overage has been
distributed as payments to dairy farmers outside Massachusetts —
primarily Vermont. Indeed, that's why Senator Jeffords is such a
diehard compact supporter. Vermont dairymen get more than 40 percent
of the windfall revenues generated by the compact's price fixing.
To maintain that, Jeffords has to continue to negotiate a political
fix in Washington.
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