Do Changes in Farmer‐First Handler Exchange Eliminate the Need for Government Intervention?

Abstract

At the last meeting of this association, the fiftieth anniversary of the Agricultural Adjustment Act of 1933 (AAA) was commemorated by a session in which the history of the act and its legacy were discussed. In many ways this paper is a continuation of that discussion, focusing on public intervention in milk pricing. The federal dairy price support program is the principal program responsible for the level of milk prices; dairy import quotas play an auxiliary role. Federal milk marketing orders, similar state controls, and to some extent federal policy toward dairy cooperatives relate primarily to pricing practices. This paper is not intended to evaluate these specific programs and policies. Rather, our objective is to explore generally the justification for and purposes of government intervention in milk and dairy product markets and to discuss whether current or expected conditions warrant the continuation of these