LETTERS: BETTER DEAL FOR FARMERS, CONSUMERS

To the editor:

Congress in its wisdom in 1996 authorized dairy farmers to market their milk through regional dairy compacts. It reasoned that milk production and pricing were local issues and that the dairy industry in a local region would be better able to balance the interests of producers, processors and consumers. Congress also wanted to assure the continued viability of dairy farming while assuring consumers of an adequate supply of locally produced pure and wholesome milk.

Already, the legislatures of 18 states have agreed to authorize participation, resulting in the formation of two regional compacts from Maine to Texas. Two more states plan to join soon. The concept is a good one, because it offers a better deal for all parties. For producers, it promises a higher return on investment -- up to 8 percent to producers in my home state of Vermont. Processors and handlers benefit by being able to join with producers and consumers on a compact commission to help set fair milk prices for the region. And consumers also benefit from a more stable supply and pricing of locally produced milk, not to mention maintenance of rural open spaces left in dairy farms.

Recent editorials and advertisements in major newspapers have warned of higher milk prices if dairy farmers join such regional compacts. This has not necessarily proven to be true. In my home area, the Northeast Dairy Compact has been operating now for over a year. Retail milk prices have been impacted very little during this period, averaging from no increase to about 18 cents a gallon. And the compact decrees that any such price increase would go directly to farmers, helping maintain the economic viability of family dairy farms. Vermont's 1,200 dairy farmers, for example, received $12.2 million of much-needed revenue from the compact during its first seven months of operation.

Opponents would like consumers to believe that the compact commission is a dairy cartel set up to tax the poor. This charge couldn't be further from the truth and serves to insult my state and others whose legislatures and governors were united in their support and approval of regional dairy compacts. The compact commission includes producers, processors, retailers and consumers along with a number of state government officials. This is a far cry from a cartel. It is also noteworthy to mention that the Northeast Dairy Compact exempts the WIC program, which serves low-income families and compensates school lunch programs in the Northeast.

A recent survey of Maryland retail milk prices, also a Northeast Dairy Compact members, showed price fluctuations from $1.99 a gallon to as high as $3.17 a gallon. Why a $1.18 differential when prices to farmers have remained stagnant? USDA data show retail milk prices to consumers have increased 31 percent during the past 10 years, while the farmer's share has increased just 5 percent, and the processing share has gone up 59 percent. Regional dairy compacts address these discrepancies, smoothing out price fluctuation and assuring farmers of a larger share of the pie.

When the facts are in, the National Grange believes these regional compacts may offer family dairy farmers one of their last remaining economic alternatives to going out of business.

KERMIT W. RICHARDSON, Master

The National Grange

Washington, D.C.