172 AGRICULTURAL ORGANISATION 



They found, however, in regard to the reductions they had 

 made in their milk rates with the view of assisting the dairy 

 farmer, that that person was not always deriving from their 

 action the benefit they had designed. There was between 

 what the dairy farmer got for his milk and what the consumer 

 in the towns paid for it a big difference which was in no way 

 accounted for by the average of a penny per gallon paid to 

 the railway companies. It was even found that when, on 

 the occasion in question, the railways reduced their milk 

 rates, certain of the buyers reduced to a corresponding 

 extent the prices they paid to the dairy farmers, who were 

 thus no better off than they had been before. The benefit 

 went in these instances to the middleman at the expense of 

 the railway companies, and the view thus not unnaturally 

 taken by the latter was that, in the absence of combination 

 on the part of the producers, any concession granted in their 

 favour might fail to attain its object. 



This combination the A. O. S. sought to effect ; but, in 

 order that the situation may be clearly understood, it is 

 necessary that the conditions under which the milk industry 

 is carried on should first be explained. 



THE MILK TRADE MIDDLEMAN. 



In actual practice a dairy farmer contracts to send all his 

 milk to a wholesale dealer in some large town, the arrange- 

 ments being generally made twice a year on the basis of 

 summer prices and winter prices. The wholesale dealer, 

 who may receive thousands of gallons of milk a day from 

 many different sources, disposes of it to the retail vendors 

 who, in turn, take it round in their milk carts to the house- 

 holders. The wholesale dealer, acting as middleman in 

 passing on the milk from the farmer to the retail dealer, 

 fixes the price he is prepared to pay to the one and the 

 price at which he is prepared to sell to the other. He runs 

 a certain risk because he may get more milk than he can 

 dispose of, and he has then either to utilise the surplus as 

 best he can or to waste it. All the same, it is he who has the 

 best chance of taking most of the profit. He offers, in fact, 



