Purpose
of the Compact
The Northeast
Interstate Dairy Compact was established to restore the regulatory authority
of the six New England states over the New England dairy marketplace. Its
stated purpose is to recognize by constitutional prerequisite the interstate
character of the northeast dairy industry and to form an interstate commission
for the region. The compact serves several major functions including: assuring
the region of an adequate supply of milk, recognizing the cultural and
economic benefits of a viable dairy industry to the region, and recognizing
the ability of the states to regulate milk prices collectively, rather
than individually, as in the public interest.
Assuring
an adequate milk supply for consumers:
The express mission
of the Compact commission is to take such steps as are necessary to assure
the continued viability of dairy farming in the northeast, and to assure
consumers of an adequate, local supply of pure and wholesome milk.
The participating
states resolved that the dairy industry is the paramount agricultural activity
of the northeast. Dairy farms, and associated suppliers, marketers, processors
and retailers, are an integral component of the region’s economy. Their
ability to provide a stable, local supply of pure, wholesome milk is a
matter of great importance to the health and welfare of the region.
Preserving
dairy farming provides cultural and economic benefits
States in the
Compact region have found that dairy farming is essential to the region’s
rural communities and character. The farms preserve open spaces, sculpt
the landscape and provide the land base for a diversity of recreational
pursuits. In defining the rural character of our communities and landscape,
dairy farms also provide a major draw for our tourist industries.
Recognizing
the ability of states to regulate milk
prices
collectively as in the public interest
The participating
states concluded that their ability to regulate the price which northeast
dairy farmers receive for their product is essential to the public interest
as defined by these twin goals. Assurance of a fair and equitable price
for dairy farmers ensures their ability to provide milk to the market and
the vitality of the northeast dairy industry, with all the associated benefits.
At the time of
the Compact’s passage, (and as recently) dramatic price fluctuations, with
a pronounced downward trend, threatened the viability and stability of
the northeast dairy region. Historically, individual state regulatory action
has been an effective emergency remedy available to farmers confronting
a distressed market. The federal order system establishes only minimum
prices for dairy products, without preempting the power of states to regulate
milk prices above the minimum levels. Based on this authority, each state
in the region individually attempted to impose at least one regulatory
program in response to the current dairy industry crisis.
Compact states
realized, however, that in today’s regional dairy marketplace, cooperative,
rather than individual state action is needed to address more effectively
the market disarray. Under our constitutional system, when properly authorized,
states acting cooperatively may exercise more power to regulate interstate
commerce than they may assert individually without such authority. For
this reason, the participating states invoked their authority to act in
common agreement, with the consent of Congress, under the compact clause
of the Constitution.
The purpose of
the Compact is not to displace the federal order system, nor encourage
the merging of federal orders. The Compact is designed as a flexible tool
able to adjust to changes in a regulated marketplace. It serves to restore
the historic balance between state and federal regulation of milk prices.
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