Md. milk price bill gains in Senate Measure is intended to end 'advantage' of Pa., Va. processors

March 08, 1997|By Ted Shelsby | Ted Shelsby,SUN STAFF

Controversial legislation designed to help stabilize Maryland's declining dairy industry by allowing the state agriculture secretary to set minimum wholesale and retail prices for milk was approved by a Senate committee yesterday.

By a vote of 6-5, the Economic and Environmental Affairs Committee sent to the full Senate a bill that is intended to eliminate what supporters call an unfair advantage that milk processors in Pennsylvania and Virginia currently have over the industry here.

Supporters argue that, because Pennsylvania and Virginia already have price support systems, processors there can take the profits from the milk they sell in their states and use their excess milk to grab additional customers in Maryland by "dumping" milk on the market here at below their production cost.

Processors here are unable to retaliate because Pennsylvania and Virginia control minimum milk prices, according to S. Patrick McMillan, a top aide to Agriculture Secretary Lewis R. Riley.

The most controversial part of a very complex bill centers on the impact it will have on the price of milk and other dairy products at the supermarket.

Opponents of the legislation, including the state's largest supermarket chains, contend that it would boost milk prices.

Supporters, including Gov. Parris N. Glendening, argue that it would lower milk prices, especially in the Baltimore area where the price of milk may be 33 percent higher than in rural areas.

"Yes! Yes! Oh Lord," McMillan said yesterday when a co-worker notified him of the Senate's action while he was speaking on the telephone.

"This is a complex issue, and the Senate took time to look at all facets of the bill and concluded that it is in the best interest of the Maryland dairy industry and the state as a whole," he said.

"There was a tremendous amount of pressure on the committee from retailers," he added.

At least two similar bills to establish minimum milk prices in Maryland in the past have not been voted on by committee.

A survey by the Pennsylvania Milk Marketing Board, which administers that state's price support program, concluded that milk prices in Pennsylvania are lower than in Maryland.

Alan Rifkin, a lobbyist who represents Giant Food Inc., Safeway Inc. and the Mid-Atlantic Food Dealers Association Inc., called the Senate bill "a price support system that would benefit the dairy farmer to the detriment of consumers."

Sen. David R. Craig, the sponsor of the legislation, SB-458, could not be reached for comment.

Craig said prior to the vote that the bill was "too close to call."

Del. J. Anita Stup, a Frederick County Republican who has introduced similar legislation in the House, was encouraged by the Senate action.

"I can hardly believe it," she said.

Stup and Craig were both on a legislative task force that proposed the price plan after studying the economic plight of Maryland dairy industry.

The House Environmental Matters committee is scheduled to vote on its milk legislation on Monday, said Stup.

"This should level the playing field and make it easier for our dairy farmers to compete with those surrounding states," said Myron Wilhide, president of the newly formed Maryland Dairy Association.

A spot survey of 35 retail outlets by The Sun last month found that the price of a gallon of 2 percent milk -- the most popular among consumers -- ranged from $1.95 a gallon to $2.89.

Prices varied greatly within the same chain. A Safeway store in Frederick charged $1.96, while a Safeway in Jacksonville charged $2.69.

An executive with Giant Food said the company was breaking even on $2.11 milk at a store in Westminster although it charged $2.67 at stores closer to Baltimore.

Maryland has lost more than 40 percent of its dairy farms since 1988, and milk processing plants have dwindled to five from about 35 in the mid-1970s.

The legislation would give Riley the authority to set the minimum price for milk received by farmers, processors and retail outlets.

Riley would be guided by a seven-member panel dominated by consumers, but it would include a farmer, a representative of a processing plant and a retailer.

Pub Date: 3/08/97

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