Dairy Compacts Under Fire:
Excerpts from Editorials and Letters

It's really is quite absurd: If the nation's top newspapers and opinion leaders are any measure, there is no public support for keeping milk price fixing cartels alive.

The Wall Street Journal Editorial, "Daschle's Got Milk", 8/6/01: "Mr. Jeffords is begging Senate Democrats to rescue his OPEC for milk with the same dead-of-night, no vote strategy that Mr. Lott used. ...The only time the Northeast Dairy Compact was ever put to a formal Senate vote in 1996, it failed. This [the compact] amounts to a transfer of wealth from parents of milk-drinking children to a handful of farmers."

The Atlanta Journal Constitution, "Farms' handouts ripe for removal", 8/7/01: "The Soviet Union tried for decades to "perfect" a system of socialist, collectivized agriculture, but neither Lenin's craftiness nor Stalin's crude brutality could make it happen. Apparently, they were missing two key ingredients to reach their goal: the American farm lobby and the U.S. Congress...Some senators and representatives are trying to extend a price cartel for Northeastern dairy farmers that is slated to expire in September. Others are trying to spread the "dairy compact" idea to other parts of the country, so that virtually the entire milk business would be under a price-fixing scheme The imagination and flexibility demonstrated by all this perverting of free-market principles are impressive. In the case of things like cotton or soybeans or peanuts, the government lets retail prices fall where they might, but gives the farmer "relief" out of tax money; for milk, it simply robs the consumer directly by propping up prices that processors must pay the dairy farmer."

Grand Rapids (MI) Press Editorial, "Uncle Sam's Milk Money..." 8/17/01: "Congress probably has more members who understand missile throw weights and depreciation recapture schedules than can fathom the government's milk-pricing policy. But the members ought to know a cash cow when they see one and steer clear of giving it new life. The cow in this instance is the Northeast Interstate Dairy Compact..."

The Dallas Morning News Editorial, 9/14/99: "Congress should ..let the milk cartel ride into the sunset. Monkeying with the free market has raised prices for consumers and hasn't kept marginal dairy farms from going bankrupt."

The Boston Herald Editorial, 8/6/01: "It [the Northeast Compact] was a particularly regressive policy in that the burden fell most heavily on the poor. It is typical of today's liberalism that many adherents will in effect tax the poor to try to preserve a lifestyle enjoyed by few...All of New England will be well rid of this bad law."

Americans For Tax Reform, Grover Norquist, "Dairy Cartels: Milking American Consumers Dry" 6/01: "Establishing and extending a dairy compact is a tacit endorsement of the OPEC model, and asserting that dairy consumers have not been (or won't be) adversely affected by a dairy compact is comparable to claiming that consumers haven't been hurt by being forced to pay more at the pump. ...ATR will rate any vote in favor of dairy cartels as votes against the taxpayer."

The Philadelphia Inquirer Editorial, "Milking Consumers: The costs of trying to protect dairy farmers", 6/15/99: "Congress should reject this attempt to extend the counterproductive intrusion on the workings of the free market. Let the milk cartel die."

Consumer Federation of America, representing 50+ million consumers nationwide, in a letter to Congress, 6/11/01: "Regional dairy compacts...give too much money to farmers who don't need the help, too little money to farmers who do need the help, and they ask consumers–including low income consumers struggling to feed their families and pay the rent–to pick up the tab. And, trends in New England since mid-1997 confirm that the Northeast Compact has not stopped the decline in the region's dairy farms. Oppose any amendments extending or expanding dairy compacts when the appropriations bill is considered."

Portland Press Herald Viewpoint, "Poor shouldn't be taxed to pay for dairy farmers", 9/5/01: "Intended to support dairy farmers, the subsidy — which has run as high as 29 cents a gallon — disproportionally comes out of the pockets of low-income families with children and from programs that buy milk to help the poor. The compact makes dairy products more expensive and hurts those who can least afford it. It should be allowed to expire."

The Atlanta Journal Constitution Opinion, "Got subsidy? How to milk taxpayers", 8/31/01: "Congress should let the Northeast Dairy Compact die on schedule and keep the price-fixing virus from spreading to other states. The free market...has helped make the United States the economic marvel of the world in almost every business sector; it's time to let it work in agriculture, too."

Wall Street Journal Editorial, "The OPEC of Milk", 6/20/01: "Unless it's rammed through as part of a political horse trade, it's hard to see how anyone justifies dairy compacts with a straight face. They are basically a highly regressive tax on milk drinkers, starting with school-age children. Creating them is a tacit endorsement of the OPEC cartel model. Claims that it doesn't gouge consumers are preposterous."

Joint Labor Management Committee of the Retail Food Industry, (JLMC) in a letter to Congress, 8/30/01: "On behalf of the vast majority of companies and unions who are members of the JLMC, I write to urge to oppose any attempt to expand and make permanent interstate dairy compacts. ...We believe that raising prices to consumers and reducing sales and consumption of milk vis-a-vis less nutritious beverages is not in our national interest."

Wall Street Journal Column, Pete Du Pont, "Milk Shakedown: Dairy farmers want to pick your pocket. Will Congress let them?", 9/5/01:
"...the most glorious subsidy in the land, a little soviet tucked away in the six Northeastern states, is for milk. The program expires on Sept. 30, but a determined political effort is under way to extend the four-year-old subsidy and create similar compacts. ..the compact is a geographic price-fixing cartel..."

National Taxpayers Union, Vote Alert, 9/5/01: "NTU urges all members of the House to vote against any effort to add Northeast Dairy Compact ...language to the Farm bill, or any other measure to come before the House. Dairy Compacts are anti-taxpayer and anti-consumer and should be defeated....any vote will be heavily weighted in our annual Rating of Congress."

The Christian Science Monitor, "The Milk Price-Fence", 8/16/01: "On the premise of keeping dairy farmers gainfully employed and fresh milk mustaches on consumers, some members of Congress have perennially championed dairy "compacts" that boost milk prices within a region. Such compacts amount to additional government-sanctioned price-fixing on top of what already exists, since the feds have long set the price for raw, fluid milk. Compacts distort the prices of milk products within a region. And they're not likely to stop the exodus of smaller dairy farmers..."

Wisconsin State Journal Editorial, 5/23/01: "The development and expansion of regional dairy cartels in the South and Northeast are textbook examples of what goes wrong when politics meddles in markets. Regional cartels are in direct opposition to the development of federal dairy polices that work equitably for everyone."

The Kansas City Star Editorial, 7/17/99: "Congress should permit the Northeast Compact to ‘sunset', or expire... Perhaps some day Washington will debate real price simplification, as in ditching dairy socialism and letting prices fluctuate according to supply and demand."

The Washington Post Editorial, "One Last Squeeze", 11/17/99: "The result [of the compact] will be to transfer hundreds of millions of dollars from consumers to inefficient producers who couldn't otherwise compete. By definition, most of the benefit will go to larger producers. The impact will be disproportionately felt by lower-income producers. "

Consumers Research Magazine: "Milk Cartel Costs Consumers and Farmers", by Barbara Rippel, Consumers Alert, 7/1/01: "Milk drinkers throughout the country should be concerned about cartel-induced increases of milk prices. That's because the Northeast Dairy Compact creates perverse economic incentives that are threatening to lead to an expansion of the cartel as well as to the creation of similar cartels in other regions."

The New Republic, "Spilled Milk", by Jonathan Chait, 6/4/01: "America's dairy industry operates under a system that can best be described as socialism. The system, by design, punishes efficient farmers and rewards inefficient ones. In fact, the Dairy Compact hurts the vast majority...[it] survives because its benefits accrue to a well-organized majority, while its costs are borne by a diffuse and largely ignorant public. Indeed, preventing open discussion of the plan is essential to the Dairy Compact's survival. Senator Jeffords admitted as much in April. ‘Hopefully...everybody will be concentrating on something else other than the compact,' he told the AP, ‘and thus, we can sneak it in through the stealth of the night, get it through when people aren't looking' "