(e) To provide for the financing of the program through a stabilization fee to be collected from dairy farmers;

(f) To protect consumers by maintaining a stabilized, adequate supply of milk and dairy products at fair prices.

LEGISLATIVE FINDING

Section 3: Milk and dairy products are an important source of the Nation's total supply of food. The production and marketing of milk and its products affects the welfare of the Nation and is attended with substantial and far-reaching consequences to interstate and foreign commerce. In the absence of a stabilization program, recurring surpluses and shortages alternately result in financial instability of farmers and unnecessarily high prices to consumers for essential foods.

GENERAL DEFINITIONS

Section 4: The stabilization program would apply to the several States, the District of Columbia, Hawaii, and Alaska.

It would apply to milk and butterfat and their products, including the various grades and classifications.

It would be based on a marketing year beginning April 1 of each year. The surplus dairy products owned by Commodity Credit Corporation when the stabilization program went into effect would be segregated in the hands of that Corporation. The same rule would apply to surplus products subsequently removed from the market and consigned to Commodity Credit Corporation to offset imports or to compensate for increased milk production resulting from the diversion of controlled acres. These stocks would be disposed of as surplus outside the ordinary channels of domestic trade (sec. 35).

In estimating supply and demand for any marketing year, surplus stocks held by Commodity Credit Corporation would be excluded, but those held by the Federal Dairy Stabilization Board would be included. Thus the Board would assume responsibility for all surplus production resulting from the operation of its own program; but it would not be responsible for surpluses accumulated under prior programs nor for those resulting from Government policies with respect to imports and controlled production of other commodities.

DAIRY STABILIZATION BOARD

Section 5: The proposed stabilization program would be administered by a Federal Dairy Stabilization Board. It would consist of 15 members appointed by the President from nominees selected by milk producers. To be eligible to serve on the Board, or to vote for nominees, a milk producer would have to be engaged at least 10 months a year in the selling of milk or butterfat on a commercial basis. The Board would be composed of milk producers and officers and full-time employees of farmers cooperative associations. The Secretary of Agriculture would be represented on the Board through an ex-officio member. Section 6: The Secretary of Agriculture would set up 15 Federal dairy districts giving consideration to complete geographical representation and the importance of dairying in each district.

Section 7: Each district would have one member on the Board. Three candidates would be nominated by the milk producers in the district. The President would then select 1 of the 3 for appointment to the Board. The Secretary would conduct all elections for the selection of nominees. In making appointments to the Board, consideration would be given to securing an equitable representation of the various forms in which milk and its products are sold.

Section 8: Board members would serve for 6-year terms, so staggered that 5 members would be elected every 2 years. Board members would receive a per diem of $50, but not to exceed a total of $2,500 in any one year, plus expenses. Section 9: The Board would meet quarterly and at other times upon call of the chairman.

Section 10: The Chairman of the Board would be selected by the Board and would serve for a term of 2 years.

Sections 11, 12, 14, 16, 18-25: The general powers and liabilities of the Board would be similar to those of the Commodity Credit Corporation.

Section 13: The Board could select an executive committee of five from among its members. The Board oculd provide a per diem for members of the executive committee in addition to their compensation as members of the Board.

Sections 15, 34: The Board would be authorized to acquire, handle, and dispose of milk and dairy products. It could conduct its operations through its own staff or through corporations, stabilization corporations, brokers, agents, or established trade facilities. It would be directed to give due consideration to disrupting, as little as possible, the usual and customary channels of trade.

Section 17: The Board would be authorized to borrow up to $500 million from the Commodity Credit Corporation. It could also borrow from private credit sources and pledge its assets as security. Aside from the power to borrow from the Commodity Credit Corporation, the Board would have no authority to obligate the United States. The Board would pay interest on all money borrowed from the Commodity Credit Corporation at rates equal to the cost of money to the Government.

Section 26: The Board would submit annual reports of its business to the Secretary of Agriculture and to Congress.

PRICE STABILIZATION

Section 27: The Board would be authorized and directed to stabilize prices of milk and butterfat to producers.

Section 28: The level at which prices would be stabilized would be determined annually by the Board and announced as far in advance of the beginning of the marketing year as would be practicable. The stabilization level so announced would not thereafter be varied before the close of the marketing year except in emergency cases. In setting price stabilization levels, the Board would give consideration to the objectives of the act and to general economic conditions affecting market supply and demand for milk and dairy products.

Section 29: Appropriate differentials could be provided for quality, location, season, and other factors.

Section 30: Prices would be stabilized through the operation of a surplus holding pool. Surplus dairy products would be bought by the Board and removed from the ordinary and usual channels of domestic consumption. The Board would be required to purchase butter, cheddar cheese, and nonfat dry milk solids at prices which would return to producers on a general average basis the prevailing stabilization levels for milk and butterfat. Other dairy products could be purchased by the Board.

Section 31: Surplus dairy products would not be sold for use in the ordinary and usual channels of domestic consumption at less than the current stabilization prices. Sales or gifts for other purposes, such as export or relief, would not be restricted by the act.

Section 32: The Government would give consideration in its relief programs to obtaining dairy products from the surplus holding pool.

Section 33: The Board would be authorized to promote and develop new and expanded outlets for milk and dairy products and to conduct, finance, and cooperate in programs of advertising, research, and other marketing activities. Sections 34, 35: (Described in secs. 4, 15).

Section 36: To the extent that imports contributed to the amount of surplus dairy products which the Board was required to remove from the market in order to stabilize prices, the Board would be entitled to turn over to the Commodity Credit Corporation an amount of the domestic surplus equivalent to the amount of such imports. Losses sustained by the Board as a result of such imports would be repaid by the Commodity Credit Corporation.

Section 37: In the same manner, increased purchases made by the Board as a result of increased milk production due to diversion from controlled acres or controlled commodities would be turned over to the Commodity Credit Corporation for disposal as surplus, Losses connected with such transactions would be paid by Commodity Credit Corporation and charged against the support programs of the commodities from which the diversion occurred.

STABILIZATION FEE

Section 38: The cost of operating the stabilization program would be charged against producers of milk and butterfat for market. Stabilization fees would be determined by the Board annually in accordance with the estimated requirements of the program for the ensuing marketing year. Purchasers of milk, butterfat, or dairy products from producers would withhold from the purchase price any amount equal to the stabilization fee and remit the same to the Internal Revenue Service,

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Section 39: Stabilization fees on sales to consumers for other than commercial uses would be paid directly by producers.

Sections 40, 43: The Internal Revenue Service would collect the fees and deposit them to the account of the Board.

Section 44: Imports of dairy products would be subject to stabilization fees at the same rates as those collected from domestic producers.

MISCELLANEOUS

Section 45: The latest available statistics of the Federal Government would be used by the Board in making its findings and determinations.

Section 46: The Department of Agriculture would provide the Board with a central office.

Section 47: An exemption would be provided from some of the laws regulating Government contracts and the operations of Government agencies.

Sections 48, 51-53: (Separability, repeal, etc.).

Section 49: The Board would pay nondiscriminatory real estate taxes but would otherwise be exempt from tax.

Section 50: Members and employees of the Board would not be permitted to speculate in dairy products or to divulge confidential information of the Board. Section 54: The stabilization operations of the Board would begin April 1, 1955.

[Preliminary Draft, December 7, 1953, National Milk Producers Federation, Washington, D. C.] A PRODUCER-FINANCED PRICE STABILIZATION PROGRAM FOR DAIRY FARMERS A BILL To provide an adequate, balanced, and orderly flow of milk and dairy products in interstate and foreign commerce; to stabilize prices of milk and dairy products; to impose a stabilization fee on the marketing of milk and butterfat; and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. This Act may be cited as the “Dairy Stabilization Act of 1954."

LEGISLATIVE FINDING

SEC. 2. Milk and dairy products are an important source of the Nation's total supply of food for domestic consumption and for export. They are marketed on nationwide markets, and substantial quantities thereof, in raw or processed form, move in interstate and foreign commerce. Recurring seasonal and periodic surpluses and shortages, impaired purchasing power and financial instability of milk producers, unnecessarily high prices to consumers for essential foods, disorderly marketing practices, economic strife, congestion in storage, transportation, processing, and other handling facilities adversely affect farm credit, disorganize and disrupt the agricultural and general economy of the United States, impinge on the public welfare, impair, the national security, and burden interstate and foreign commerce. The production and marketing of milk and dairy products is affected with a public interest, directly affects the welfare and security of the Nation, and is attended with substantial and far reaching consequences to interstate and foreign commerce. All marketing of milk and dairy products is either in the current of interstate or foreign commerce or directly affects such commerce. That part which enters directly into the current of interstate or foreign commerce cannot be effectively regulated without regulating also that part which is marketed within the State of production. The intrastate production and marketing of milk and dairy products is in competition with the production and marketing of milk and dairy products for interstate and foreign commerce.

DECLARATION OF POLICY

SEC. 3. It is hereby declared to be the policy of the Congress (a) to provide an adequate, balanced, and orderly flow of milk and dairy products in interstate and foreign commerce; (b) to promote the effective merchandising of milk and dairy products in interstate and foreign commerce; (c) to protect the security and welfare of the Nation by maintaining adequate domestic production of milk and dairy products and by keeping the national agricultural resources permanently productive and reasonably adjusted to current demand; (d) to stabilize the prices of milk and dairy products at levels which will assure adequate supplies of milk and dairy products and provide a fair return to the producers of milk and butterfat

commensurate with the cost of production, taking into consideration the investment and risk involved and the labor of the producer and his family; (e) to protect the interest of consumers by maintaining a stabilized, continuous, and adequate supply of milk and dairy products at fair prices and by authorizing no action which has for its purpose the establishment or maintenance of prices to producers at levels above those specified in subsection (d); and (f) to provide a self-financing system of price stabilization for milk and dairy products based on a stabilization fee to be paid by those marketing milk or butterfat in interstate or foreign commerce, or so as to affect such commerce.

GENERAL DEFINITIONS

SEC. 4. For the purposes of this Act—

(a) The terms "interstate commerce" and "foreign commerce” include the movement of milk and dairy products in commerce between any State or the District of Columbia and any place outside thereof, or within the District of Columbia or any Territory or possession which is included within the operation of this Act by the action of the Board.

(b) The term "affect interstate or foreign commerce" means, among other things, to burden, obstruct, impede, or otherwise affect interstate or foreign commerce, the free and orderly flow thereof, or the production, storing, processing, marketing, or transportation of milk and dairy products for or in such commerce or after transportation therein.

(c) The term "United States" means the several States, the District of Columbia, Hawaii, Alaska, and any other Territory or possession of the United States which the Board determines should be included in the operation of this Act. The term "States" includes any State, the District of Columbia, Hawaii, Alaska, and any Territory or possession which the Board includes within the term United States. The provisions of this Act shall apply to the United States as herein defined, except that the powers and authority of the Board may be exercised in other areas and in foreign countries in connection with the disposal of milk, butterfat, or dairy products.

(d) The term "Secretary" means the Secretary of Agriculture, “Department" means the Department of Agriculture, and "Board" means the Federal Dairy Stabilization Board.

(e) The term "person" means an individual, partnership, firm, joint-stock company, corporation, association, trust, estate, or any other business entity. (f) The terms "milk," "butterfat," and "dairy products" mean milk, butterfat, and the products of milk and butterfat, respectively, including any classification, type, or grade thereof, together with such combinations and byproducts thereof and such products manufactured wholly or in part of both or either as may be designated by the Board.

(g) The term "marketing year" means the twelve-month period beginning April 1 of each year.

(h) "Estimated supply" for any marketing year shall be: (1) The estimated carryover at the beginning of such marketing year; plus (2) estimated production for market in the United States during such marketing year; plus (3) estimated imports into the United States during such marketing year, except estimated imports to be acquired by or charged to the Commodity Credit Corporation as surplus. Estimates for marketing years may be based on statistics or estimates for calendar years, or, in the discretion of the Board, calendar year estimates may be used in place of marketing year estimates.

(i) "Carryover" shall not include any surplus milk or dairy products owned or controlled by the Commodity Credit Corporation or in the process of being acquired by it or which the Commodity Credit Corporation is obligated under this Act to acquire before the beginning of the marketing year for which "carryover" is to be estimated.

(j) "Estimated demand" for any marketing year shall be: (1) The estimated domestic consumption during such marketing year; plus (2) estimated exports during such marketing year; plus (3) an allowance for carryover. In determining estimated demand, estimated disposals of surplus milk or dairy products by Commodity Credit Corporation or by the Board outside of the ordinary channels of domestic or foreign trade shall be excluded.

(k) The "allowance for carryover" shall be determined by the Board. In making this determination consideration shall be given to the need for maintaining an adequate, dependable, and continuous supply of milk and dairy products. The Board shall take into consideration any abnormal conditions present or likely to prevail, contingencies related to national

security and world supplies, and trends in the production, marketing, or utilization of milk and dairy products.

(1) "Milk producer" means any person engaged in the production of milk or butterfat for market. A milk producer to be eligible to serve as a member of the Board or to vote for nominees for appointment to the Board must be engaged at least ten months a year in the selling of milk or butterfat on a commercial basis.

(m) "Commodity Credit Corporation" shall include the Commodity Credit Corporation as now or hereafter constituted and any successor or other governmental agency authorized to perform similar services.

FEDERAL DAIRY STABILIZATION BOARD

SEC. 5. There is created within the Department of Agriculture as an agency and instrumentality of the United States a Federal Dairy Stabilization Board consisting of 15 members to be appointed by the President from nominees selected by milk producers. Only persons who are milk producers, or who are officers or full-time employees of such dairy cooperative associations or marketing agencies or dairy cooperative associations as meet the requirements of the Capper-Volstead Act (7 U. S. C. sec. 291-292), shall be appointed to or eligible to serve on the Board.

SEC. 6. In order to secure appropriate regional representation on the Board, the United States shall be divided into 15 Federal dairy districts to be designated by the Secretary. In designating such districts, the Secretary shall give consideration to: (1) Complete geographical representation of the United States, and (2) the importance of dairying in each district.

SEC. 7. Each Federal dairy district shall be entitled to one place on the Board. The milk producers in each district shall by ballot select three nominees for the place on the Board assigned to their respective district. Each milk producer shall be entitled to submit one name for the place on the Board to be filled by a nominee from his district. The three candidates receiving the highest number of votes for each respective place on the Board shall be the nominees for appointment to such place. The Secretary shall conduct all elections for the selection of nominees for appointment to the Board, prescribe such rules and regulations as he may consider necessary in the administration of the duties assigned to him under this Act, determine all questions involving the qualifications of nominees, members of the Board, or milk producers, resolve all tie votes for nominees, and certify all nominees to the President. The decision of the Secretary in all such matters shall be final. From the three nominees so selected for each place on the Board, the President shall appoint one to membership on the Board. In making appointments to the Board, the President shall give due consideration to securing an equitable representation of the various forms in which milk and its products are sold.

SEC. 8. The first appointments to the Board shall be equally divided between two, four, and six year terms, respectively, as designated by the President, and thereafter each member shall be appointed for a term of six years. Terms of Board members shall be based on calendar years and shall expire on the 31st day of December of the last calendar year of the appointment. Each member shall hold office for the term of his appointment and until his successor shall have been appointed and shall have taken office. Board members may be removed for cause or ineligibility by the President. Vacancies on the Board may be filled for the unexpired term by appointment by the President from the remaining nominees from which the original appointment was made or, in the discretion of the President, in the manner herein prescribed for the appointment of members for a regular term. Vacancies on the Board shall not impair the right of the remaining members to exercise all the powers of the Board. Members of the Board, other than the Secretary or the Secretary's representative, shall receive a per diem of $50 for each day's attendance at meetings of the Board and while traveling to and from said meetings, but not to exceed a total of $2,500 in any one year, together with actual, necessary travel, subsistence, and other expenses incurred in the discharge of their official duties without regard to other laws with respect to allowances which may be made on account of travel and subsistence expenses of officers and employed personnel of the United States. The Secretary, or an official of the Department designated by him, shall be an ex officio member of the Board. He shall meet and confer with the Board but shall not be entitled to vote.

SEC. 9. The Board shall meet quarterly on the first Mondays of January, April, July, and October of each year and at other times upon call of the chairman.