A battle is shaping up in both Senate and House over the issue of whether states should be able to set milk prices higher than the federal standard allows.  With strong support in both chambers, bills have been introduced to create regional dairy compacts in which states set the price for milk.  The legislation would make the Northeast Dairy Compact permanent and add six states to that region; a Southern Dairy Compact would be established as well by the bills.  But there is opposition.

Arrayed against the bills are members of Congress from the Midwest.  Rep. John Boehner (R-OH) says the compacts "are bad for consumers, bad for farmers and bad for the future of American agriculture.  Renewing and expanding these price-fixing regimes would be a devastating step backwards."

But the Senate bill has 39 co-sponsors and the House more than 150.  The Northeast Dairy Compact's authority to exist expires Oct. 1 without renewal action from Congress.  Ten southern states have approved legislation to join the southern compact, and five more have yet to pass such bills.

Already in place to join are Alabama, Arkansas, Kentucky, Louisiana, Mississippi, North and South Carolina, Tennessee, Virginia and West Virginia; yet to get into place are Florida, Georgia, Missouri, Oklahoma and Texas.

Ready to be added to the northeast compact are Maryland, New Jersey and New York; Delaware, Ohio and Pennsylvania will join if the respective legislatures authorize it.

Boehner says the northeast compact already has cost New England consumers $48 million and school meal programs another $1.75 million.  "Expanding dairy compacts and extending them into the next century is not in the best interests of American  agriculture," he says.  "The future prosperity of American farming will be built on freedom and free markets, not government control and price fixing."

He cited a Public Voice report that estimates the northeast compact cost consumers an additional $38 million in its first year of operation; milk prices increased 15-21 cents per gallon.  Boehner also says compacts are unconstitutional and undermine the 1996 farm law.

The compact clause in the constitution, he adds, provides for strong interstate cooperation for infrastructure needs.  "While there have been many compacts authorized by Congress, these are the first that operate as price fixing cartels for regional interests."