Congress's dairy dilemma

HEADNOTE

AGRICULTURE

HEADNOTE

Are compacts the best way to save family farms?

LAST FALL, CONGRESSIONAL AUTHORITY expired for the

Northeast Interstate Dairy Compact (better known as the New England compact), a landmark agreement that empowered a special regional commission to regulate wholesale milk prices for six New England states. Under the compact, farmers in the participating states- Maine, Vermont, Connecticut, Massachusetts, New Hampshire, and Rhode Island - were guaranteed a minimum return on at least a portion of the milk they sold to processors located in those states. Together, the states' farms produced 2.8 percent of the United States' milk supply in 2000.

When it was first authorized in 1996, proponents hailed the compact as an effective way to stabilize milk prices for small family farmers without the infusion of federal tax dollars. What is more, proponents said, the compact helped to maintain tourism, rural economic development, and green space in New England. But compact opponents mainly processors and consumer groups in the affected areas and farmers in the Midwest - claimed that the compact amounted to a price-fixing cartel that artificially protected farmers in compact states while lowering farm prices in non-compact states. Consumer groups also argued that it created a regressive milk tax on the poor who resided in compact states.