Got Milk?

Waterbury, Vt. – Like four generations of her family before her, Rosina Wallace is a dairy farmer. She has 31 cows at her small Vermont dairy, providing her just enough money to live.

But because of the Jeffords power shift in the Senate, Wallace’s dairy days may soon be over. In February, milk prices fell to the lowest rates since the 1970s. The only thing keeping Wallace’s farm afloat is the Northeast dairy compact, which was created by Congress in 1996 and sets a minimum price farmers are paid for a gallon of milk.

"It would have just wiped everybody out," Wallace said of the price drop. "Except the compact guarantees we'll get that production amount."

But with the defection from the GOP of Vermont Sen. Jim Jeffords, the future of the compact – and of dairy farmers like Wallace – is in doubt.

Vermonters fear a backlash against the dairy compact, which Jeffords championed. Now critics who have long called it legalized price fixing may have their day.

"It's a welfare system for Vermont dairy farmers that operates at the expense of the average consumer," economist David Tuerck said.

Some point to the system in the Midwest, which relies on a few huge dairy corporations and considers compacts the bane of interstate commerce. President Bush and most of Congress oppose the Northeast dairy compact. And those legislators who weren’t sure may have soured on the idea, some say.

"Republicans that might have supported the dairy compact in the past to keep him in the party are going to be a lot less inclined to support it now," Tuerck said.

Vermonters like Congressman Bernie Sanders aren’t letting the criticism curdle their enthusiasm for the compact. He argues it actually encourages competition by keeping more family farms alive.

"I don't want the day to come when food production in this country is controlled by a handful of huge agri-business corporations," Sanders said.

Twenty five states, mostly in the South and East, have passed legislation to join dairy compacts. But the Northeast compact could evaporate come September when Congress decides whether to reauthorize or end it.