Regional Rifts Manifest As Government Begins Review of Milk Price System Graphic
Sep. 05, 1990
EAU CLAIRE, Wis. (AP) _ Regional dairy groups feuded Wednesday as the Bush administration began looking into whether the decades-old U.S. milk pricing system should be changed.
The U.S. Agriculture Department returned to the city where dairy prices are determined as it opened the first of several hearings into recommendations to change the federal milk market order system.
The complicated formula partially pays farmers based on how far they live from Eau Claire, a city of about 50,000 located 120 miles east of Minneapolis in the heart of Wisconsin's dairy land.
Upper Midwest farmers claim the present system is unfair, outdated and provides artificially high subsidies for producers in the South and West who live farthest from Eau Claire.
Witnesses at the hearing before an administrative law judge accused rival dairy interests of seeking to alter the system to their benefit.
''They don't care about the South. They want to take the money from the South and put it up here,'' Paul Alagia, a Kentucky lawyer representing 13 southern dairy groups, complained about the Upper Midwest's dairy industry.
''We are going to fight like hell to stop it from happening. They are not going to bulldoze over us,'' he warned.
U.S. Rep. Steve Gunderson, R-Wis., an outspoken advocate of changing the pricing formula to eliminate disparities that hurt Midwest farmers, urged dairy interests to relinquish parochial interests.
''It is not my intent to hurt anybody. Listen, the Civil War is over,'' he said.
U.S. Agriculture Secretary Clayton Yeutter decided to hold hearings across the nation to investigate Midwest claims that the milk marketing system provides artificially high subsidies for producers in the South and West.
The Bush administration would make any changes to the system through administrative rules rather than the 1990 farm bill being drafted by the politically divisive Congress.
The milk marketing order system, created in the 1930s, is designed to ensure an adequate supply of milk, to move milk from high-production areas and to maintain a market with stable prices and controlled surpluses.
But while milk production in the South and West - traditionally non-dairy producing states that have received higher prices - has increased markedly, the current system continues to pay farmers in those regions more than the Midwest.
Critics of the current system want the government to eliminate a transporation differential that pays farmers more the farther they live from Eau Claire.
But farmers in the South, West and Northeast object to any such change.
Sheldon Weiss, a lawyer representing dairy cooperatives in 10 northeastern states, said some of the changes being considered would shift hundreds of millions of dollars from the Northeast and Southwest into Wisconsin and Minnesota.
''This is to a certain extent a sectional battle,'' Weiss told the hearing. ''Unless you show me some reason the status quo should be changed, don't tinker with it.''
Weiss warned if Yeutter ''exceeds his powers'' in altering the system, ''we will go to war. If they screw up the federal milk-order system, we go to court.''
Richard Glandt, the USDA marketing specialist who is coordinating the hearings, said the goal is to implement any changes recommended by the adninstrative law judge by June 1992.
About 110 people attended the first of two days of testimony in Eau Claire. Testimony will also be gathered in Minneapolis, St. Cloud, Minn., Syracuse, N.Y., Tallahassee, Fla., and Dallas through mid-October.