Taxpayer advocate Grover Norquist submits testimony to theSenate Judiciary Committee on the Northeast Interstate Dairy Compact

WASHINGTON- Grover Norquist, president of Americans for Tax Reform, will testify before the Senate Judiciary Committee on 25 July 2001 against extending the statutory authority of the Northeast Interstate Dairy Compact, an arrangement given sanction by federal law that artificially raises the price of dairy products. He will also urge Congress not to create new compacts across the country. 

The Northeast Interstate Dairy Compact was enacted in July 1997 as a means to ensure an adequate supply of milk and other dairy products and to prevent small dairy farm closures. It has ultimately forced milk prices 10 to 15 cents per gallon higher--to the detriment of all who consume milk, but especially low income people who spend a larger share of their income on foodstuffs. It also has depressed overall consumer demand, and dairy farms are consequently shutting down at a faster rate than before the Compact was established. 

The statute will expire on September 30, 2001 if it is not reauthorized.

"The Northeast Compact has been an expensive boondoggle not worth continuing, and this experience has ably shown that establishing even more regional compacts would be a very ill-advised choice for Congress to make," said Norquist in his submitted statement. "Whenever any government brusquely interferes with the pricing mechanism of the free market, untenable economic distortions inevitably follow."

Dairy compacts are proven to be among the most expensive of public policy mistakes. The Northeast Compact has cost milk consumers $130 million to date.

Norquist concluded: "Not only should regional compacts get out of the business of fiddling with the price of milk, the USDA should get out of it as well. Governments at all levels should allow the marketplace to determine the price of all food, as it does so effectively and equitably with every good and service."

Norquist's complete testimony is available on ATR's Website at www.atr.org.