Milk policy vote is today; House action slated in battle over pricing; East, South vs. Midwest


WASHINGTON -- In a regional battle royal, representatives from the East and South are seeking to thwart a proposed change in federal policy that would slightly reduce milk prices.

Legislation in Congress would set aside new federal regulations, scheduled to take effect Oct. 1, that would cut the rate at which dairy farmers on the East Coast must be paid for their milk.

Marylanders in Congress generally support the legislation, which is to be voted on today in the House, despite the opposition of some consumer groups. The Maryland representatives say they want to protect family farmers.

But advocates of current price supports concede that they are fighting something of a losing cause. Lawmakers from Wisconsin, Minnesota and other Midwestern states, whose dairy farmers say the price supports unfairly favor their Eastern competitors, are expected to sink a similar provision in the Senate.

Additionally, White House officials have signaled that President Clinton would veto the legislation because it would allow the production of too much milk. The administration policy it would scrap would cut the price of milk to consumers by about 2 cents a gallon.

East Coast farmers say they fear that their revenue will fall significantly if the new federal policy is put in place. For many of Maryland's 870 dairy farms, which produced annual revenue of $209 million last year, the price supports are considered a financial lifeline.

"We're going to lose the war, eventually," Robert Shore, general manager for the Maryland and Virginia Milk Producers, said yesterday. Shore said reducing the fixed prices would cost an average of about $10,000 annually for each of the 1,600 dairy farmers across 10 states that belong to his group. Development has drained many Eastern states of farmland, and the new policy would only accelerate that trend, he said.

Yet Wisconsin dairy farmers, who are second only to their California competitors in milk production, argue that it's unfair that dairy farmers elsewhere are essentially granted higher payments for milk.

"We feel that there's absolutely no justification for any price-fixing in dairy at all," said Joe Flader, chief of staff for Rep. Tom Petri, a Wisconsin Republican. "Farmers around the country can do quite handily in a free market. The purpose of the existing program is to try, desperately, to jack up prices for farmers at the expense of consumers."

Farmers receive a price essentially based on how far away the farms are from Eau Claire, Wis. -- ground zero for milk-producing cows. The laws were designed in an era of no refrigerated trucks to encourage dairy farming far from the heart of dairy country.

A 1996 agriculture reform bill scrapped many decades-old programs that propped up prices for specific crops. But deregulation of prices in the dairy industry proved such a thorny issue that it was left out of the overhaul, relegated to the Agriculture Department for future study.

Earlier this year, department officials recommended a significant cut in the price that dairy farmers outside the upper Midwest would receive for their milk. If no legislation directing otherwise is passed by Congress and signed by the president, the policy would go into effect Oct. 1, which appears likely.

The clash has created unlikely pairings, such as House Majority Whip Tom DeLay of Texas, perhaps Congress' leading conservative, and Rep. Patrick J. Kennedy, the liberal Rhode Island Democrat who is heading his party's quest to take back the House.

Rep. Roscoe G. Bartlett, a Western Maryland Republican who almost invariably denounces subsidies for other industries, says the plight of dairy farmers requires government intervention. "It's like a person who has been on drugs for a long time," Bartlett said, calling for a gradual reduction in price supports. "You can't just go cold turkey overnight."

In the meantime, lawmakers from six Northeastern states are seeking to gain congressional approval to extend the life of a voluntary compact among their states allowing them to set milk prices outside the federal system. An additional 21 states -- including Maryland -- are seeking to enter similar alliances.

Pub Date: 9/22/99

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