Dairy farmers feel pressure of politics

Economics: Renewal of New England's price support compact, on which farmers depend, is uncertain this year.

September 09, 2001|By Jean Marbella | Jean Marbella,SUN NATIONAL STAFF

RANDOLPH, Vt. - Over the knoll from Perry Hodgdon's place, a one-time farm has become a housing development. Hodgdon's own 100-acre dairy farm was once four separate ones, and may itself cease operations or get absorbed into another farm next year when Hodgdon hopes to retire.

Family dairies, with their weathered barns and Ben-and-Jerry cows grazing on gentle green terrain, retain their hold on New England's physical and emotional landscape, even as they find it ever harder to stay afloat in the current tide toward larger-scale agriculture.

But now, they stand to lose the life raft that many say has helped them remain viable in today's climate: the Northeast Interstate Dairy Compact, which guarantees New England farmers a higher price for their milk than the federal minimum, will expire Sept. 30 unless Congress renews it.

Despite that fast-approaching deadline, the Senate bill to re-authorize the compact remains bogged down in political disputes, even as a group of Eastern and Southern states - including Maryland - press to join the compact or start their own.

Here in New England, support for the compact is as easy to find as the nearest milking barn.

"Without the compact last year, we would have been in trouble," says Hodgdon, 64, a second-generation dairy farmer.

The sun has yet to rise on this recent day when Hodgdon begins milking his 41 Jerseys, the first of a twice-daily routine, and it will have set by the time he finishes a typical workday. For this, Hodgdon made a profit of about $16,500 last year - and about $7,000 of that came from the compact.

"You need some kind of stabilization in milk prices," he says, "and the compact provides a kind of stabilization."

The compact was created as a nod to dairy farmers here, recognizing that they face higher costs than farmers in larger, more land-rich states who can take advantage of the economy of scale.

It was also an acknowledgement that there is a value beyond the bottom line to keeping family dairy farms viable in New England, where they provide a ready, local source of milk, a hedge against encroaching suburban sprawl and a link to the region's past. In Vermont, there are three dairy farms that have been in continual operation since the 1770s.

But now the compact is in trouble. A growing chorus of dairy processors, consumer groups and Midwestern farmers is crying foul, saying that the compact has raised the price of milk in area grocery stores and given New England farmers an unfair advantage in what should be a free marketplace.

Additionally, one of the compact's chief defenders in the Senate, James M. Jeffords of Vermont, might have a harder time getting it renewed this year than in the past because of his defection from the Republican Party in May. Jeffords was previously able to persuade then-Republican Majority Leader Trent Lott to slip the compact's renewal through without a vote two years ago, the last time it was scheduled to expire.

This year, though, Lott surely will do the party defector no favors. And the leader of the Senate Democrats with whom the declared independent Jeffords is now allied, Tom Daschle, is in a tricky situation: He has previously opposed the compact, as have other Democrats who represent Midwestern farm states, but he owes the Vermont senator his party's control of the Senate.

"It's become too much of a political football," says Mildred Rooney, a Vermont dairy farmer and milk processor who is a member of the commission that implements the compact.

Misconception blamed

Much of the controversy over the compact comes from the misconception, Rooney says, that the compact is a taxpayer-funded program. But, the higher price that New England farmers get for their milk is paid for by the dairy processors, the ones who purchase raw milk and package it for sale to grocery stores.

The compact price, which is set at $16.94 per 100 pounds of milk (or 11.6 gallons), is paid to New England farmers whenever the wholesale price drops below the federal minimum set by the U.S. Department of Agriculture. The USDA base price - which is subject to add-on costs in different parts of the country - is $15.56.

Last year, when wholesale milk prices were low, New England farmers received big compact checks - about $18,000 on average. But this year, wholesale prices have been higher, so the compact price has not kicked in as often.

For consumers, it's a little less clear what effect the compact has had on milk prices at the grocery store. While retail milk prices in New England have risen about 30 cents a gallon over the life of the compact, that also was how much they went up nationwide, according to a U.S. Department of Agriculture survey.

Who's to blame

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