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088924 1 (1972-05-08)

handle is hein.gao/gaobacuwt0001 and id is 1 raw text is: DS UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 RESOURCES AND ECONOM IC NAY 8 1972 DEVELOPMENT DIVISION Dear Mr. Kossack: We have inquired into certain features of the Federal Milk Marketing Order program. During our inquiries, we developed informa- tion on certain matters related to the prices paid to milk producers under the marketing orders which we believe may be of interest to you. We were unable to evaluate these matters fully because we do not have access to the records of the Department of Agriculture's milk marketing order administrators. We understand, however, that the Secretary of Agriculture has the authority to authorize your Office access to the records. Because we do not plan to continue our review in this area at the present time, we are furnishing the following information as a basis for you to request access to records and pursue these matters. A Federal milk marketing order, which is issued by the Secretary of Agriculture, regulates the handling of milk for the area for which it is issued. It requires all milk handlers--those who purchase and sell milk in the market area--to pay dairy farmers regularly supplying the market not less than certain minimum prices established in accord- ance with the way or form in which the milk is utilized. Certain deductions from the minimum prices, such as locational differentials, are allowable under the marketing order regulations. Also cooperative associations, as handlers under marketing orders, are not obligated to pay their producers the established minimum prices. Under a section of the Agricultural Marketing Agreement Act of 1937 (7 U.S.C. 608c(5)(F)), a cooperative association may determine a lower price to pay its producers by averaging a part or all of the sales proceeds from all dairy products under all marketing orders in which the association is involved. Our review of the Department's fluid milk and cream reports, which are published monthly, showed that milk producers often do not receive the minimum prices set forth under the marketing orders. For example, during 1971 (1) some producers were paid as much as 95 cents a hundredweight below the minimum price for milk delivered to handlers during a particular month and (2) there were two marketing orders under which producers were paid more than 50 cents a hundredweight below the minimum prices for the entire year.

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