Senate Democrats are trying to expand Sen. James M. Jeffords’ pet dairy program into a nationwide subsidy but are meeting resistance within their ranks and from the Republican leadership.
Mr. Jeffords, Vermont independent, abandoned the Republican Party and threw Senate control to Democrats earlier this year after the White House signaled that the Northeast Dairy Compact would not be renewed.
Democrats are offering another program as a compromise that would fix the price that dairy processors nationwide must pay farmers for raw milk, but the measure’s Senate author, fellow Vermonter Patrick J. Leahy, acknowledges its endorsement will be an uphill battle.
The measure, expected to cost the federal government $300 million per year in compensatory payments to dairy processors, is meant to appeal specifically to longtime dairy-compact critics, Sens. Herb Kohl and Russell D. Feingold, both Wisconsin Democrats.
However, neither senator from the nation’s leading dairy state has endorsed the compromise.
“I’m certainly not prepared at this point to say yes or no, but I have an open mind,” Mr. Kohl said.
Mr. Kohl said he was concerned that having a set nationwide price for raw milk could eliminate market forces and competition, and could hurt farmers and consumers.
“We still have the real market place,” Mr. Kohl said. “Historically in this country, we have never had any commodity or any product ever that just set an arbitrary price, so we’ll have to figure out how it will really work because it is something new.”
Republicans and Democrats also are concerned that Mr. Leahy will pull his amendment for a nationwide subsidy at the last minute and replace it with the expired dairy compact.
“If that happens, the farm bill is dead,” said Sen. Larry E. Craig, chairman of the Republican Policy Committee.
“I think we have the votes to stop that now and we will work very hard to make that happen if that’s what they want to do,” Mr. Craig said.
Mr. Craig and fellow Idaho Republican Michael D. Crapo will attempt to strip the national measure from the farm bill when it comes up for debate today, a move endorsed by Senate Minority Leader Trent Lott, Mississippi Republican.
“The language they have in there is even worse than the Northeast Dairy Compact. It’s hard to believe, but it is really terrible,” Mr. Lott said.
Mr. Feingold said he supports a national dairy program, but is concerned that this key element may be removed when both houses meet to hammer out the final details in conference committee.
“I’m not ready to commit,” Mr. Feingold said.
Mr. Leahy yesterday refused to answer questions from reporters about the dairy compromise, but in a statement last week said key opposition would come from processors, who would pay more for milk.
“Processors have spent millions trying to kill our regional compact, and they’re digging even deeper into their pockets to kill this national plan,” Mr. Leahy said.
Under the Leahy proposal, consumers would pay 10 percent, or 26 cents more, per gallon of milk, according to the Food and Agricultural Policy Research Institute.
That amounts to a $1.8 billion milk tax on consumers, said Kathleen Nelson, director of legislative affairs for International Dairy Foods Association.
“At a time when poor people are being squeezed now more than ever as we head into this recession and folks are losing jobs, it is not the time for Congress to impose a milk tax on American families,” Miss Nelson said.
Congress authorized the Northeast Dairy Compact in 1996, giving six New England states the authority to create a regional dairy agreement. It allows an interstate commission to set minimum prices paid by dairy processors to dairy farmers at a level above the federal minimum.