For Immediate Release Contact: John Frydenlund
April 27, 1999 (202) 467-5300

(Washington, D.C.) – Council for Citizens Against Government Waste (CCAGW) President Thomas A. Schatz released the following statement today in response to new legislation that would extend the life of the Northeast Interstate Dairy Compact, add New York, New Jersey and Maryland to that milk cartel, and authorize the creation of a Southern Dairy Compact.

“The Northeast Interstate Dairy Compact has been in effect for almost two years.  Although the Compact has artificially increased milk prices in the six-state region, it has done nothing to reverse the number of small dairy farmers that have gone out of business.  In fact, because the benefits of the compact go primarily to the largest, wealthiest farmers, it has actually exacerbated that trend.  At the same time, since the Compact went into effect, the region’s consumers have paid in excess of $55 million more for their milk.

“If Compacts are allowed to swallow up a vast percentage of the country, the results will be devastating.  The cost to consumers in the South will dwarf those that have been imposed on New England’s consumers.  While the New England region produces less than 3 percent of the nation’s milk supply, adding additional states to the Northeast Compact and creating a Southern Compact would bring more than 40 percent of the nation’s milk supply and 60 percent of the nation’s consumers, under the power of a milk-pricing cartel.

“Unless stopped, these policies will lead us down the same path followed in the 1980’s.  Then, artificially high milk price supports led to excessive surplus milk production, declining sales of milk, and government purchases skyrocketing out of control.  During the decade, these policies cost taxpayers $17 billion.

“This country cannot afford to repeat the mistakes of the past.  For the sake of the nation’s taxpayers and consumers, it is long past time to get the federal government out of the dairy business.”

CCAGW is a 600,000 member nonpartisan, nonprofit lobbying organization dedicated to enacting legislation to eliminate waste, fraud, mismanagement and abuse in government.


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