Copyright 2001 Journal Sentinel Inc.  
Milwaukee Journal Sentinel (Wisconsin)
May 23, 2001 Wednesday METRO EDITION
SECTION: NEWS; Pg. 01B

LENGTH: 1010 words

HEADLINE: U.S. blamed for loss of dairy farms;
Green tells House panel that compact, order system hurt state's producers

BYLINE: KATHERINE M. SKIBA of the Journal Sentinel staff

BODY:
Washington -- Saying government policies are leading to a catastrophe, U.S. Rep. Mark Green said Tuesday that Wisconsin had lost 13,000 dairy farms in the last 10 years.

Green, testifying before a House panel, said the dairy farms lost exceeded the number of dairy operations that any other state -- besides Minnesota -- ever had at one time.

Wisconsin, with 21,000 remaining dairy farms, is losing dairy farms at a rate of about four per day, he said.

The Republican lawmaker from Green Bay said farm losses in Wisconsin and Minnesota were due almost entirely to anti-competitive barriers imposed by the government. Minnesota went from 15,000 dairy operations a decade ago to 8, 500, an aide said.

Specifically, Green targeted the Northeast Dairy Compact and the federal milk-marketing order system.

The compact takes in six New England states. It is set to expire at the end of September, but there is a move afoot to both extend and enlarge it, steps that the upper Midwest's federal lawmakers vehemently oppose.

The New England states are Vermont, New Hampshire, Maine, Massachusetts, Connecticut and Rhode Island. Within the compact, a minimum milk price is set that farmers charge processors -- an arrangement critics say hurts consumers, leads to overproduction and depresses prices elsewhere.

Meantime, several Southern states have banded together in hopes of their own compact.

Green's other argument is with the milk-marketing order system, which dates to 1937. It mandates that producers generally receive more money for Class 1 fluid milk -- the kind we drink -- the farther they are from Eau Claire.

Green told the panel that the system dated to the time when Wisconsin led the nation in dairy production and it was difficult to transport milk across the country.

Incentives back then were created to spur dairy production in so-called deficit states. With refrigerated trucks and an interstate highway system, "we now have 35 states producing dairy surpluses." Green said, "There is no area of the U.S. that doesn't have easy access to fresh milk."

Losing a way of life

Talking about the sharp decrease in state dairy farms, Green said in an interview that it created social and economic disruption. "Every one of these farmers is not only a family, but is a small business. Communities have sprung up around collections of small farms, and when we're losing this many farms, it means massive upheaval and dislocation."

He added: "There's a tremendous concern about the loss of a way of life."

The panel, the Agriculture Subcommittee on Horticulture and Livestock, heard from proponents and opponents of dairy compacts as it considers national dairy policy and the upcoming farm bill.

Wisconsin, with nine House members, and Minnesota, with eight, would seem to be up against many more federal legislators from the more than 25 states that have passed enabling legislation on the state level to sign on with a compact.

But Green, for his part, called Tuesday's hearing "just the opening salvo in what's going to be a long, bitter debate." He said there is a chance California lawmakers -- whose dairy farmers are not part of a compact, and not part of the milk-marketing order system -- might align themselves with those from the upper Midwest.

Kind proposes legislation

Ron Kind, a House Democrat from La Crosse, put the number of dairy farm losses in the state at four or five a day. Helping dairy farmers, he said, means helping farm- equipment dealers, hardware stores, veterinarians, banks and other rural businesses.

Kind's solution: He has proposed legislation that would give dairy farmers incentive payments on all classes of milk when the market price falls below $12.50 per hundredweight. He said that would make the federal dairy program more consistent with programs that support other commodities.

" If we fail to safeguard this vital resource entering the new century, America risks losing the family dairy farms that have made us so strong," he said.

Dave Obey, a House Democrat from Wausau, also weighed in Tuesday. In a statement to the panel, Obey said the present-day dairy policy is "failing farmers, failing consumers and failing taxpayers."

He said he had very low expectations of any major reform of the milk-marketing order system.

But he voiced his opposition to the Northeast Dairy Compact and urged lawmakers to look at Kind's legislation.

Some in favor

On the topic of compacts, there were voices for and against.

Those in favor included the American Farm Bureau Federation. Its president, John Lincoln, a dairy farmer who milks Holsteins in Bloomfield, N.Y., said the farm bureau wants the Northeast Compact extended and the Southern Dairy Compact OK'd.

He said compacts reduced price volatility and paid $135 million to nearly 4,000 Northeast dairy farmers over three years -- not government payments but revenue from the market. But under questioning he was hard-pressed to explain the sharp decline in the number of farms in New England.

Opponents included the International Dairy Foods Association, whose 500 members take in the dairy processing and manufacturing industries and their supplies. "We believe it is essential to take dairy compacts off the table . . . a large number of dairy producers have been convinced that dairy compacts are the best way to get more money, but this is only a very short-term promise at best," said Constance E. Tipton, a senior group vice president with the association.

AT A GLANCE

-- Within a compact, a minimum milk price is set that farmers charge processors -- an arrangement critics say hurts consumers, leads to overproduction and depresses prices elsewhere.

-- Within the milk-marketing order system, producers generally receive more money for Class 1 fluid milk -- the kind we drink -- the farther they are from Eau Claire.

-- Wisconsin, with 21,000 remaining dairy farms, is losing dairy farms at a rate of about four per day.

-- And in Minnesota, there were 15,000 dairy operations a decade ago, 8,500 today.

LOAD-DATE: May 23, 2001