Rather than criticizing Hillary Clinton, David Horowitz would do better to congratulate her for recognizing that dairy farmers in the Northeast -- family farmers who barely earn enough to survive -- desperately need the modest safety offered by the Northeast Dairy Compact. Clinton is siding with farmers, consumers and states that produced the dairy compact. Horowitz sides with the corporate giants who have spent millions to kill it.

Horowitz's understanding of the dairy compact's record is incorrect on several counts. Far from being imposed on the states, the dairy compact is a state-initiated, state-ratified and state-supported cooperative arrangement between dairy producers, processors and consumers, which assures a safe and fresh supply of milk for consumers and a fair price for dairy farmers. A study by the federal Office of Management and Budget has shown that six months after the dairy compact went into effect, the price of a gallon of milk in the compact region was five cents lower than in the rest of the country. The dairy compact's commission exempts milk used in federal nutrition programs such as the school lunch program and WIC.

The only sure way to maintain a fresh and stable supply of locally produced milk is to ensure that dairy farmers get a fair return for the milk they produce. Fewer dairy farms do not equal lower milk prices or a more stable supply of fresh, local milk. In parts of New England, before the compact's lifeline to dairy farmers, more than 40 percent of these dairy farms were forced out of business. Milk prices inevitably will rise in the long run if milk production is concentrated with fewer and fewer farmers, farther and farther away from the consuming public.

Horowitz is right about one thing: This is a battle between David and Goliath. The real Davids in this fight, though, are the family farmers, who are simply asking that a 7-day-a-week, 12-hour-a-day job yield a decent return for their product; they are fighting large, multibillion-dollar corporate Goliaths, whose real agenda is protecting their profits. Clinton deserves credit, not scorn, for championing the true "little guy" in this important debate.

-- Patrick Leahy
United States Senator
Washington

I read David Horowitz's column blasting the Northeast Dairy Compact just before I went out to the barn to milk our herd of Jersey cows this morning. Unlike most of our farming neighbors, this New York farm family opposes the compact on free-market grounds. But I was startled by Horowitz's claim that the compact "is expected to put $74,000 in the pocket of every New York farmer, well-heeled and struggling alike." This attention-grabbing figure represents about half the gross income, or double or triple the net income, of most of the dairy farm families I know. "That much?" I thought. "Maybe I ought to support the compact after all!"

Unfortunately for my pockets, 10 minutes of rudimentary research showed me that Horowitz's figure is nonsense. In New England, which has operated under the Dairy Compact for about two years, the percentage of the total producer price attributed to the compact averaged 3.41 percent between July 1997 and December 1998. In 1998, when the non-compact milk price rose higher than the floor price set by the compact for a number of months, this percentage averaged just 1.74 percent. I don't know what Horowitz imagines that New York farmers earn, but if he tried reading some agricultural statistics or simply talking to a few of us, he'd discover that 2 or 3 percent of the total producer price wouldn't pay $74,000 to anybody except, maybe, a handful of the largest dairy farms. For the vast majority of New York's milk producers, a modest few thousand bucks a year would be more like it. New England's experience also suggests that Horowitz's prediction of a 50-cent-a-gallon retail price increase is wildly unlikely. If history is any guide, the increase would be more like 12 or 15 cents a gallon -- bad enough, but nowhere near Horowitz's exaggerated numbers.

Hysterical hyperbole of this sort doesn't help anybody's cause. There are good, factual reasons to oppose the compact. Why make things up?

-- Catherine Frey Murphy

DAVID HOROWITZ RESPONDS ...

There are so many misrepresentations and false statements in Sen. Leahy's letter it is difficult to know where to begin. It is false, for example, to claim that Hillary Clinton is siding with "consumers" in backing the milk compact, since consumers groups are in fact opposed to it, because consumers would be gouged by the artificially supported milk prices resulting from the compact. The senator, who is the legislative author of the compact, misrepresents the facts when he suggests that it is a case of small farmers vs. "corporate giants." In reality the structure of the milk industry in the Midwest states that oppose the milk compact and the Northeast states that support it is the same. There are big farms and small farms in similar distributions in both regions. The difference is that the Northeast has a large urban population and therefore it produces more beverage milk than the Midwestern states, which produce more milk solids like cheese. The compact affects the price of beverage milk only. It benefits corporate giants as well as small farmers in the Northeast by making children pay more for a gallon of milk, and puts Midwestern dairy producers at a disadvantage.

The 50 cent per gallon rise in milk prices I projected for the new compact, which will include additional states, is an estimate put forward by consumer advocate Mark Green and Rudy Giuliani among others. Milk prices in the compact states have increased 7 percent since 1997, when the compact was first instituted (according to the OMB), or 25 cents a gallon. Of course the amount of the rise will depend on how the cartel is administered. I should have qualified my claim about the pricing and also about the amount of money going to farmers. The $74,000 figure is an average. Of course the larger farms in Vermont, Massachusetts and other states in the compact will benefit more than small farmers who may not see a fraction of this sum.

The bottom line is that this is a futile government intervention to put off the inevitable. Milk production by small farms is inefficient. Artificially raising prices to protect inefficient farmers at the expense of children and especially poor children, which is what Hillary Clinton supports, does not reflect the kind of priorities she otherwise claims to be hers.

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