The objective of this session is to explore the economic effects of government intervention in milk pricing. In an insightful analysis, Gardner poses the question whether the price discrimination model or the price stabilization model is the more appropriate for the analysis of classified pricing. Though he leans toward price discrimination at various points in his paper, Gardner concludes the evidence published to date forswears a definitive answer. Boynton and Novakovic, on the other hand, eschew modeling in favor of a survey of literature that is both old and obscure to the exclusion of recent developments. They hint at serious market failures in the years prior to regulation without being very specific; they suggest such failures would surface again if federal and state governments were to dismantle milk pricing programs. This discussion consists of a few comments centered on rather narrow issues followed by comments of a more general nature that may add some n-ew perspectives on the debate on dairy policy. Gardner's attempt to define disorderly marketing as a possible manifestation of oligopsony raises a serious question. Orderly marketing is presumably an objective for order programs for commodities other than milk, including western citrus, walnuts, cranberries, and the like. The marketing of several of these commodities is dominated by large, farmer-owned cooperatives. Are we to suppose that Congress was really concerned with oligopsonistic abuses in markets for such commodities? Gardner has raised a legitimate objection to using the concept of an aggregate supply for milk in analyzing the effects of abolishing classified pricing. Basic to his objection is the likelihood of diverse price movements that would ensue in different parts of the country if orders were discontinued. This objection may not apply, however, to using aggregate supply in analysis of changes in the price support program. With classified pricing intact all Class I prices move with the MW price series in close harmony. Does government-sponsored classified pricing raise the prices paid by plants and consumers for milk used in fluid consumption? The answer is of course it does, Gardner's criticisms of presently available research to the contrary notwithstanding. In the New York-New Jersey order the Class I utilization rate was 40.8% in 1982. If classified pricing were discontinued in that area, for example, the fluid price and the average price received by milk producers would fall to the manufacturing level forthwith. In the short run the percentage declines for fluid and blend prices would roughly equal 18% and 9%, respectively. Fluid milk consumers would be better off and milk production assets would be devalued.