[Congressional Record (Bound Edition), Volume 145 (1999), Part 16] [Extensions of Remarks] [Pages 23099-23100] [From the U.S. Government Publishing Office, www.gpo.gov]CONSOLIDATION OF MILK MARKETING ORDERS ______ speech of HON. JAMES L. OBERSTAR of minnesota in the house of representatives Wednesday, September 22, 1999 The House in Committee of the Whole House on the State of the Union had under [[Page 23100]] consideration the bill (H.R. 1402) to require the Secretary of Agriculture to implement the Class I milk price structure known as Option 1A as part of the implementation of the final rule to consolidate Federal milk marketing orders. Mr. OBERSTAR. Mr. Chairman, in 1996 Congress agreed the U.S. dairy pricing system was seriously flawed and the U.S. Department of Agriculture (USDA) should develop a more evenhanded pricing system. After three years of research and an exhaustive public comment period, USDA proposed a modest reform plan, and now the proponents of H.R. 1402 seek to violate the agreement made in the 1996 Farm bill by leaving in place a blatantly unfair Depression-era pricing structure that penalizes dairy producers based on their distance from Eau Claire, Wisconsin. Few government programs are more complex and misunderstood than the USDA's milk marketing system. President Franklin Roosevelt established federal orders in the 1930s during the Great Depression to ensure an adequate supply of fresh milk nationwide. The primary goal of the system was to facilitate the flow of milk from surplus production regions to deficit regions. During the Depression, the Upper Midwest was the nation's center of dairy production. So to encourage the flow of milk from the region, the federal government required dairy processors to pay higher prices for fluid milk based on their distance from the Upper Midwest. This allowed our dairy farmers to recover the extra costs of transporting their product to consumer regions. Clearly, federal orders made sense sixty years ago. The situation has changed. Dairy farms have sprung up in every corner of the country, especially in those regions farthest from the Upper Midwest where the government requires higher minimum prices. Federal orders no longer encourage the flow of milk from one place to another. Today, federal orders artificially encourage the production of milk by high-cost producers in certain regions at the expense of more efficient producers in the Upper Midwest. Geographically, the system favors milk production in high-cost regions such as the Southeast, Texas, and the Northeast at the expense of traditional dairy states such as Minnesota and Wisconsin. The impact of this pricing system on the Upper Midwestern dairy farmer has been disastrous. Since 1955, Minnesota has lost nearly 60,000 dairy farms. Over one-quarter of Minnesota dairy farmers disappeared in the six-year period following 1993. Mr. Chairman, I strongly oppose this misguided legislation that would continue an outdated dairy policy, and I believe that the USDA's reform plan should be implemented. ____________________