With bills now introduced in both Senate and House to expand dairy compacts and extend the Northeast Dairy Compact's life, the battle lines are drawn over the feasibility of broadening the scope of such arrangements.  Compacts allow prices to dairy farmers to be set on an "over-order" basis, or greater than the price required by the federal milk marketing orders.

One of the provisions of the legislation is to create a 15-state dairy compact for southern states.  It also would make the Northeast Dairy Compact permanent and expand it to include Delaware, New Jersey, New York, Pennsylvania, Maryland and Ohio.

The National Milk Producers Federation is not taking a position on the bills "since they are regional in nature."  Sen. James Jeffords (R-VT) introduced the legislation in the Senate, and Rep. Bob Etheridge (R-NC) introduced it in the House.  But opponents are not reticent; they include both milk producer interests and milk processors.

International Dairy Foods Association Senior Vice President Connie Tipton said approving the legislation would "set the dairy industry on a regressive course from which it will take years to recover.  Compact fever is being fueled by narrow, geographic self-interest.  What we need is sound, national dairy policy, not a hodge-podge of pricing cartels that throw up walls to interstate commerce and tax consumers."

Sens. Herb Kohl and Russell Feingold, Wisconsin Democrats, introduced their own bill to repeal the Northeast Dairy Compact.  Compact supporters "seem determined to preserve the unfair advantages their dairy farmers now enjoy," Kohl said.  "In doing so, they ignore what would benefit dairy farmers and consumers all across the country."

Milk prices should be set by the market, he said, "not by compacts or its distance from Eau Claire (WI).  We need to level the playing field for dairy farmers, not create more advantages for select groups of dairy farmers."

Feingold said dairy interests need to "throw aside the regional bickering and work, as a nation, to be more competitive in the global marketplace.  To do that, we first have to beat back the spread of the compacts which have nearly made price discrimination against Upper Midwest farmers a permanent condition."