GENERAL FARM PROGRAM 1231 



different type of technique for the handling of the problems of milk 

 and its products. This took two general forms. 



The first was the method of determining minimum prices for pro- 

 ducers in fluid milksheds, both under Federal and State orders. 



In addition to the 30 great milk markets, which are largely great 

 cities with large markets, as I recall there are 17 States of the Union 

 which have different types of fluid milk control laws. Some of those 

 laws are limited to the minimum prices for dairy farmers and some go 

 right on through to controlling the spreads of the handlers, both 

 wholesale and retail. The cost to the Government of handling those 

 markets is relatively insignificant, being largely administrative costs, 

 since the actual administrative work, the details, auditing the books of 

 the dealers, and so on, is taken care of by the Federal milk adminis- 

 trators who are located in these different points and that cost is borne 

 entirely by the handlers. 



You might say adding together the Federal controls and the State 

 controls, probably more than 50 percent of the urban population of 

 this country is affected by the system which has grown into being as 

 a part of this development beginning with the Agricultural Adjust- 

 ment Act and which flowered into the Agricultural Marketing Agree- 

 ment Act of 1937. 



Similarly, during the thirties it was necessary to find some means 

 of stabilizing the price of the manufactured milk products, such as 

 butter and evaporated milk and cheese. For that operation an 

 entirely different mechanism was used. It was the mechanism of 

 purchasing the products, all that might be offered on the central 

 markets, at certain specified prices based upon a certain percentage 

 that those prices would be of 100 percent of parity. For a number 

 of years in connection with that operation the Government used a 

 privately incorporated corporation whose stock was all owned by 

 dairy cooperatives, most of which were members of our association. 

 This was kno\\Ti as the Dairy Products Marketing Association, with 

 a capital of $1,000. This operation was very efficient and very rapid 

 and a corporation of this kind found that it could do many things 

 which a corporation like the Commodity Credit Corporation has 

 great difficulty in doing. This operation was carried on by a three- 

 way contract; one between the DPMA, the other with the Commodity 

 Credit Corporation, and finally ■s\'ith the Secretary of Agriculture. 



If you look over the quantities purchased at different times over 

 that entire period, you will find that very little loss was sustained by 

 the Government in the handling of the stabilization projects. 



Mr. Murray. Will the gentleman yield at that point? 



Mr. HoLMAN. Yes. 



Mr. Murray. There was very little support at that particular time. 



Mr. HoLMAN. That is also true, sir, because we were in a period of 

 deep depression at that time. 



Mr. Murray. Cheese was averaging 10 to 13 cents a pound. 



Mr. Holm AN. That is correct, and butter went down as low as 17 

 cents a pound when we put in the stabilization project at 26^- 



Mr. ]\Iurray. One of the weaknesses of the program was that when 

 butter got to be 30 cents a pound they put it on the market so that 

 they kept it lower than it would have been under the natural turn of 

 affairs. That was still below what it cost to produce it. That was the 

 effect of the program without any support program. 



