NATIONAL TAXPAYER WATCHDOG GROUP URGES REPEAL OF NORTHEAST DAIRY COMPACT

For Immediate Release    Contact:  Jim Campi
August 1, 1997 (202) 467-5300

 

(Washington, D.C.) – The Council for Citizens Against Government Waste

(CCAGW) today called on Congress to repeal authority for the Northeast Interstate Dairy Compact.  The compact establishes artificially higher prices for milk in six New England states and prohibits competition from dairy producers outside the region.

“Our predictions about the enormous cost of the Northeast Dairy Compact are already becoming all too true,” remarked CCAGW President Thomas A. Schatz.  “Since July 1st, the date the compact officially went into effect, milk prices in New England have increased dramatically.  Congress needs to repeal the compact before this cartel of dairy farmers creates a milk crisis in New England.”

In March, 5,000 CCAGW members from Massachusetts, Rhode Island and Connecticut petitioned the Secretary of Agriculture to forego the implementation of the compact.  However, the Secretary ignored the concerns of these taxpayers and consumers, and instead caved in to a handful of special interests advocating the milk cartel.

In a letter to Congress, a coalition of several national public policy organizations joined CCAGW to urge passage of S. 322 in the Senate and H.R. 438 in the House.  The Senate bill, introduced by Senators Rod Grams (R-Minn.) and Russ Feingold (D-Wisc.), would repeal authority for the compact.  The House bill, introduced by Reps. James Sensenbrenner (R-Wisc.) and David Obey (D-Wisc.), would rescind the consent of Congress for the compact.

Calling on Congress to enact these bipartisan bills this year, Schatz stated “The House of Representatives never even considered the milk price-fixing scheme, while the Senate actually rejected the proposal during consideration of the 1996 Farm Bill.”

Based on the price increases that have already gone into effect, consumers in the six compact states can expect to pay at least $70 million more for milk annually.  Taxpayers can also expect to pay at least $3 million more each year for government-funded school meal expenses.  Massachusetts, Rhode Island and Connecticut consumers, particularly those with lower incomes or children, will be hardest hit by this reverse redistribution of income from the poor to the wealthy.

“There never was any compelling public interest to approve the compact,” Schatz said.  “But now that there is ample evidence of how unfair the compact is to New England taxpayers and consumers, there is a compelling public interest in repealing this wasteful and unfair price-fixing scheme.”

CCAGW is a 600,000-member lobbying organization dedicated to enacting legislation to eliminate waste, inefficiency and mismanagement in the federal government.

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