For Immediate Release, January 15, 1999

Tina Wisell, (802) 229-1941

Northeast Dairy Compact Commission Proposes a Change in the Way its Administrative Assessment is Determined, Votes Against Exempting Organic Milk from the Regulation and Decides to Study Supply Management Further

The Northeast Dairy Compact Commission this week took action on a host of issues it had presented for comment as part of a recent Subjects and Issues Rulemaking process. The Commission held public hearings on December 11 and December 16, 1998 and held a public comment period until December 31, 1998 to gather information on the issues of supply management, income distribution, organic milk and the Commissionís administrative assessment.

The Commission decided at its monthly meeting on Wednesday to move ahead with a proposed rule that would amend the method for determining the amount of the administrative assessment charged to milk handlers. Currently, fluid milk handlers are assessed 3.2 Ę on every hundred pounds of milk they sell in the New England region. This money is used to fund the administration of the Compact regulation. "The Commission decided to initiate a rulemaking process on this issue, because the current regulations do not provide the Commission any flexibility to waive or reduce the assessment if financial conditions warrant such adjustments," said Ken Becker, Executive Director.

The proposed rule would give the Commission the discretion to adjust the assessment downward or to waive the assessment completely. The Commissionís goal would be to maintain a reserve account in the range of 80% to 120% of four-months operating expenses as determined to be necessary in the Commissionís budget. As part of the proposal, the Commission is seeking comments concerning whether the rule should be amended to allow the Commission to adjust the assessment upward in exceptional circumstances, and if so, what circumstances would justify such an adjustment. The Commission also proposed a new rule which would require handlers to pay the Commission by electronic funds transfer if the amount owed was over $25,000.

The Commission will hold a public hearing on the proposed rule at 9:00 a.m. on March 3, 1999 at the Tuck Library in Concord, New Hampshire. Sworn and notarized written testimony, comments and exhibits may be submitted to the Commission until 5:00 p.m. on March 17, 1999. The official notice of proposed rulemaking will be published in the Federal Register.

Due to the substantial amount of testimony and comments received on the issues of supply management and income distribution, the Commission decided to send the issues to its Committee on Regulations and Rulemaking for further study. The Commission requested that the Committee report back to the full Commission with a recommendation by the Commissionís meeting in May. The timeline would allow the Committee to obtain quarterly statistics concerning milk production in the region that are released by the National Agriculture Statistic Service in April.

The Commission decided not to exempt organic milk from the Compact price regulation. Among the concerns cited by the Commission were the conflicting requests that the Commission had received from two major organic milk dealers during a public hearing held on the issue on December 16, 1998. Commission members also expressed concern that no other regulatory body has yet established a separate identity for milk produced organically and exempting organic milk might set a precedent resulting in requests for other types of milk to be exempted.

The Commission will not be holding a monthly meeting in February. It will next meet on March 3, 1999 at the Tuck Library in Concord, New Hampshire.

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