In 1996, Congress consented to the Northeast Dairy Interstate Compact, as adopted by the six New England states, subject to several conditions. The Compact’s stated purpose was to restore the states’ regulatory authority over the region’s fluid milk market, to be able to ensure stability in the raw product supply for the market and to promote the economic and social benefits that attend a viable dairy farm industry.
Congress’ formal conveyance of consent to the Compact in 1996 concluded an extended federalist process of governmental policy making. As called for by the Constitution, this two-step federalist process was initiated by the formal adoption of the interstate legislative Compact agreement by the New England states and culminated with the conveyance of federal consent by Congress to implement the Compact.
Congress’ action proved to be more a beginning for the New England states’ Compact initiative rather than a culmination of their effort. There quickly followed the “finding of compelling public interest” by the Secretary of Agriculture, as required under one of the conditions of consent for the states to begin their Compact work.[1] The Secretary’s finding led concurrently to the Compact Commission’s establishment and to a court challenge to the Secretary’s action. The conduct and resolution of this first court challenge, in favor of the Secretary and Commission, occurred simultaneously with the initial administrative proceedings, which ultimately resulted in the establishment of the market-wide price regulation. A second court challenge to the Commission’s action quickly followed; this litigation too was resolved in the Commission’s favor, and by 1998, the Compact price regulation had become established as part of the regulatory landscape for the New England milk marketplace.
This part of the Commission’s Impact Report describes the Compact’s legislative, administrative and legal history through the present day, both before and after Congress authorized the Compact in 1996. Section 2 of this part describes the evolution of the New England regional dairy market which led the states to begin work on the Compact, the terms of the agreement the states eventually reached, and the ratification processes in the state legislatures.
Section 3 describes the legislative process at the federal level by which the 104th Congress granted its consent to the Compact, and through which, pursuant to that consent, then-Secretary of Agriculture Glickman determined that the Commission would benefit the New England region. Section 3 also describes the first lawsuit challenging the Compact’s approval process and the Secretary’s Finding, and the favorable decision of the federal Circuit Court for the District of Columbia.
Section 4 describes the Commission’s rulemaking activities since it began operating in 1996. These actions include the initial proceedings to establish the price regulation and its exemption and reimbursement provisions for the WIC and School Lunch programs, and the subsequent administrative process to establish the Commission’s Supply Management Program. Section 4 describes various challenges to and requests for handler, or processor, exemptions from the Commission’s regulations, some of which eventually reached the federal courts.