Thomas E. Petri: “this amendment removes a provision in the bill that extends the Northeast Dairy Compact for 6 months. The amendment thus…”

“this amendment removes a provision in the bill that extends the Northeast Dairy Compact for 6 months. The amendment thus takes us back to current law and allows the compact to sunset as originally intended on April 4 of next year. This compact, as we know from the legislative history, was inserted in the 1996 farm bill in conference and has never been reviewed by the Committee on the Judiciary or stood for a vote on the floor of the House. This unprecedented use of the interstate compact provisions of the U.S. Constitution should not be extended, at least without careful review by the Committee on the Judiciary; but even with such review, in my opinion, should not be extended. The compact established a cartel to raise milk prices in New England, and it has done so. Retail fluid milk prices were raised about 8 percent in Boston. Guess what? Farmers have raised production by three times the national average in Vermont, consumers have lowered their consumption, and mounting surpluses are being turned into milk powder and sold to the U.S. Department of Agriculture. Calculated properly, the cost of these surplus purchases is actually more than the farmers gained from higher prices. If the farmers actually pay these costs as they are supposed to under the terms of the compact, even they will be net losers from this price-fixing scheme. If, through some kind of political manipulation, they do not pay for the surplus, the taxpayers will get stuck with the bill.”