Pa. move buoys farmers in Md.

Legislature OKs bill to bring that state into area pricing group

Dairy industry

June 18, 1999|By Kristine Henry | Kristine Henry,SUN STAFF

Maryland dairy farmers pushing for extension of a compact that sets milk prices were buoyed yesterday by the news that the Pennsylvania legislature passed a measure that would bring that state into the regional pricing group.

The Northeast Interstate Dairy Compact already sets drinking-milk prices for six states in the Northeast and can only be extended to contiguous states. Maryland, where the governor and legislature have already approved joining the compact, became eligible after Delaware joined in May.

The compact, however, is set to expire in October unless the U.S. House and Senate vote to extend it, and passage is not certain. Lawmakers from the Midwest, where farmers are crying foul, are vehemently opposed to separate price supports for Eastern states.

Gov. Parris N. Glendening and 16 other governors sent a letter yesterday to House and Senate leaders urging passage of the compact legislation.

"Given the significant reductions in federal farm programs as a result of the 1996 farm bill, we strongly support the need to return more power to states in determining fair prices for locally produced supplies of milk," the letter said.

The legislation is still making its way through committees.

Pennsylvania's move "makes it a more unified system, and it works well having the whole area under one pricing system where all the states work together," said Myron Wilhide, president of the Maryland Dairy Industry Association.

"But the more important thing is we'll have a hard time getting this through Washington, and if we didn't have Pennsylvania legislators, we may not have as much support in Washington. We know we have a tough battle on our hands."

Pennsylvania lawmakers sent Gov. Tom Ridge the compact bill yesterday. He has said he will sign it.

U.S. Agriculture Secretary Dan Glickman has proposed -- as he was required to do under the 1996 farm bill -- a new national milk-pricing system that would be more market-based and have a lower guaranteed price for farmers. Should the compact be defeated by Congress, farmers nationwide would be forced to survive in a freer market.

And that might not be such a bad thing, said Kevin McNew, an economist with the agricultural and resource economics department of the University of Maryland, College Park.

"I have a lot of sympathy for farmers, it's a hard profession, but at the same time the markets will pay sufficiently," he said. "Yes, there will be times of short-run losses, but there will also be times when they're making a lot of money. You don't hear too many dairy farmers complaining right now, at least you shouldn't, because last year there were record-high dairy prices."

But Wilhide said farming is not like other industries and should not be expected to perform strictly on a supply-and-demand basis.

"We can't control the weather, we can't control anything -- the free market doesn't really work," he said. "It takes so long to build supplies up and down. In a hot spell we lose supply, and our cattle can be gone for a couple years. And we're talking two years before we can even get a cow into production."

Pub Date: 6/18/99

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