1238 GENERAL FARM PROGRAM 



1. Under a program of direct subsidies to dairy farmers from the Federal 

 Treasury, the tendency would be to drive prices downward to a greater extent 

 than would be the case if there were no subsidy program involved. To what 

 degree this would be reflected in a reduction in prices is unknown. However, to 

 the extent that such a result took place, the cost of the program would be increased. 



2. We have noted further that a significant portion of the milk in the United 

 States is now in effect supported in price by regulatory programs of both the State 

 and Federal Governments. In other words, there is no purchase program for 

 fluid milk as such in existence today. The maintenance of returns to producers is 

 achieved by price regulation. As for manufactured dairy products, if the Secre- 

 tary's program were effectuated in place of the direct market purchase program, 

 prices would decline in the manufactured dairy products fields and would be 

 associated with declines in prices in fluid milk markets. It would then be neces- 

 sary either to arbitrarily increase fluid milk prices under regulation to make up 

 part of the difference, or to make a payment to producers to compensate them for 

 the loss of income. This could amount to very significant amounts of money. 



In conclusion, we submit that the present two-way mechanism of supporting 

 dairy prices is the least costly to the Government and the most satisfactory to 

 dairy farmers. There may be some minor differences between the Secretary and 

 us as to correct price-support levels and there may be some complaints with 

 regard to details of administering the present program; but these are insignificant 

 when contrasted with the inevitable evils growing out of a personal subsidy pro- 

 gram combined with quantity quotas which would freeze the industry of dairy 

 farming, much to the disadvantage of the people of this country. 



Table 1. — Milk markets regulated by orders issued pursuant to the Agricultural 

 Marketing Agreement Act of 1937 



Boston, Mass. Clinton, Iowa 



Lowell-Lawrence, Mass. Quad Cities, Iowa, 111. 



New York City, N. Y. Dubuque, Iowa 



Chicago, II!. Nashville, Tenn. 



Suburban Chicago, 111. Omaha, Council Bluffs, Iowa 



Cleveland, Ohio Sioux City, Iowa 



Fall River, Mass. Kansas City, Mo. 



Cincinnati, Ohio Wichita, Kans. 



Davton-Springfield, Ohio Topeka, Kans. 



Tri-State area, Ohio, West Virginia, South Bend, La Porte, Ind. 



Pennsylvania Philadelphia, Pa. 



Toledo, "Ohio Paducah, Ky. 



Columbus, Ohio St. Louis, Mo. 



Louisville, Ky. Minneapolis, St. Paul, Minn. 



Fort Way'ne/lnd. New Orleans, La. 

 Duluth-Superior, Wis. 



Source: Dairy Branch, U. S. Department of Agriculture. 



Table 2. — List of States having milk control laws regulating the handling of milk in 



fluid-milk markets 



Massachusetts Pennsylvania Florida 



New York California New Hampshire 



Connecticut Oregon Montana 



Louisiana Virginia Rhode Island 



New Jersey Georgia Vermont 



Alabama Maine 

 Source: Dairy Branch, U. S. Department of Agriculture. 



