Section 1 of the amending bill amends section 2 (1) of the act by fixing the post-war period, August 1919-July 1929, as the base period for milk and other products, subject to section 8e. The present act establishes the period August 1909-July 1914 as the base period for all commodities except tobacco and potatoes, but also provides that the post-war period, or a portion thereof, can be used if the Secretary finds and proclaims that satisfactory statistics are not available in the Department of Agriculture for the pre-war period. Because of changes in sanitary conditions, methods of marketing fluid milk and collection of price data reflecting the same, and the rapid expansion and marked changes in production and marketing technique which have characterized many other commodities to which regulations issued under this act apply, the Secretary has found it necessary to use the post-war period, or a portion thereof, in the great majority of marketing-agreement programs. This amendment will permit the use of the post-war period without the necessity of special findings and proclamations and, at the same time, avoid possible controversies in respect to such administrative procedures and change in the price objectives of the act. The possibility of using only a portion of the prescribed period if the lack of satisfactory information so demands is preserved without change.

SEC. 8c. (5) In the case of milk and its products, orders issued pursuant to this section shall contain one or more of the following terms and conditions, and (except as provided in subsection (7)) no others:

(A) Classifying milk in accordance with the form in which or the purpose for which it is used, and fixing, [Sec. 2] either specifically or by formula, or providing a method for fixing, minimum prices for each such use classification which all handlers shall pay, and the time when payments shall be made, for milk purchased from producers or associations of producers. Such prices shall be uniform as to all handlers, subject only to adjustments for (1) volume, market, and production differentials customarily applied by the handlers subject to such order, (2) the grade or quality of the milk purchased, and (3) the locations at which delivery of such milk, or any use classification thereof, is made to such handlers.

(B) Providing:

[Sec. 3] [(i) for the payment to all producers and associations of producers delivering milk to the same handler of uniform prices for all milk delivered by them: Prouided, That, except in the case of orders covering milk products only, such provision is approved or favored by at least three-fourths of the producers who, during a representative period determined by the Secretary of Agriculture, have been engaged in the production for market of milk covered in such order or by producers who, during such representative period, have produced at least threefourths of the volume of such milk produced for market during such period; the approval required hereunder shall be separate and apart from any other approval or disapproval provided for by this section; or]

(i) for the payment to all producers and associations of producers delivering milk to the same handler of uniform prices for all milk delivered by them: Provided, That, except in the case of orders regulating the handling of milk products only, orders containing such provision shall not become effective unless the Secretary of Agriculture determines from a referendum that such provision is approved or favored by at least three-fourths of the producers who participated in the referendum and who, during a representative period determined by the Secretary, have been engaged in the production of milk for sale in the marketing area specified in such order, or by producers who participated in the referendum and who, during such representative period, have produced at least three-fourths of the volume of milk produced for sale within the marketing area specified in such order; the approval required hereunder shall be separate and apart from any other approval or disapproval provided for by this section; or

(ii) for the payment to all producers and associations of producers delivering milk to all handlers of uniform prices for all milk so delivered, irrespective of the uses made of such milk by the individual handler to whom it is delivered; subject, in either case, only to adjustments for (a) volume, market, and production differentials customarily applied by the handlers subject to such order, (b)

the grade or quality of the milk delivered, (c) the locations at which delivery of such milk is made, and (d) a further adjustment, equitably to apportion the total value of the milk purchased by any handler, or by all handlers, among producers and associations of producers, on the basis of their marketings of milk during a representative period of time.

(C) In order to accomplish the purposes set forth in paragraphs (A) and (B) of this subsection (5), providing a method for making adjustments in payments, as among handlers (including producers who are also handlers), to the end that the total sums paid by each handler shall equal the value of the milk purchased by him at the prices fixed in accordance with paragraph (A) hereof.

[Sec. 4] Providing further (i) reasonable compensation (to be paid out of any pool or fund established under this paragraph (C) of subsection (5)), as determined by the Secretary, to bona fide cooperative marketing associations, all of whose operations are under the full control of milk producers, for services rendered to producers of milk or its products covered by the order by performing such marketing functions specified therein as the Secretary determines will tend to effectuate the declared policy of this Act, including, but not by way of limitation, handling of surplus milk or making available to the market a sufficient supply of milk at all times: Provided, however, That no such compensation shall be paid to any cooperative association which does not comply with the applicable provisions of the order; or (ii) reasonable compensation (to be paid out of any such pool or fund), as determined by the Secretary, to operators of plants where milk is received from producers and which are not equipped for manufacturing, for services rendered to the market in diverting and disposing of surplus fluid milk during periods of excess supply, and to operators of condensing, evaporating, or drying plants for services in furnishing fluid milk to the market during periods of insufficient supply: Provided, however, That no such compensation shall be paid to any such operator who does not comply with the applicable provisions of the order.

Section 2 of the amending bill amends section 8c (5) (A) of the act by indicating more precisely in the statute what is meant by the term "fixing" as applied to minimum prices, in order to accommodate administrative methods to well-established industry practices. The purpose of the amendment is to clearly authorize the fixing of a minimum price by the use of a formula as well as by a specified price per unit of a commodity. This would permit the expression of the price of milk, for instance, in terms of a relationship to the prices of butter or other dairy products, thereby providing automatic adjustments which reflect changing prices of such products.

Section 3 of the amending bill amends section 8c (5) (B) (i) by deleting the existing provisions and substituting in lieu thereof a revised paragraph. This section combines the changes that were originally proposed by sections 3, 12, and 15 of S. 3426. The amended paragraph does not change the substance of the existing paragraph in that it still authorizes a plan of settlement providing for the payment of uniform prices to all producers and associations of producers delivering milk to the same handler, when such a plan is approved or favored by at least three-fourths of the producers. The revised language is made to conform with that of subsections (8) and (9) of section 8c requiring that such approval be expressed by producers producing milk for sale in the marketing area specified in such orders and thus removes the necessity for section 15 of S. 3426, which was designed to achieve the same result. The revised provision also requires that the extent of producer approval be determined by the Secretary on the basis of a referendum in the same manner as other similar determinations may be made under subsections (8) and (9). This revision accomplishes the purpose of section 12 as originally proposed by S. 3426 and removes the necessity for that section.

Section 4 of the amending bill amends section 8c (5) (C) of the act by providing specifically for the segregation, from the total value of milk as fixed by the order, of sums to provide reasonable compensation

for two distinct kinds of marketing services as indicated in the provisions designated as (i) and (ii). This authority is considered as being involved in the power to fix minimum prices to handlers and the manner of making payments to producers already contained in the act. Hence, the purpose of section 4 is to establish more explicit standards by which the Secretary shall be guided in providing for such compensation. Both types of services are definitely associated with the proper functioning of an order program and the effectuation of the policy of the act.

The services for which compensation is authorized by the provision designated by (i) are of the type regarded as essential in carrying out the method of payment to producers authorized by paragraphs (B) (ii) and (C) of subsection (5) of section 8c under the method of pricing milk to handlers provided in paragraph (A) of the same subsection. Authorization of such compensation to be paid out of any pool or fund established under paragraph (C) of subsection (5) involves the fundamental principle that such services be those which are identifiable as benefiting all producers with a reasonable degree of equality as distinguished from services, the benefits of which are limited primarily to members of a particular cooperative association. Illustrations of these types of marketing services are suggested in the amendment itself, but the Secretary is authorized to specify others which may conform to these general principles when necessary to achieve the same marketing results under circumstances peculiar to different markets. Because of the nature of such services, compensation with respect thereto is limited to bona fide cooperative marketing associations, all of whose operations are under the full control of milk producers.

The services for which compensation is authorized by the provision designated by (ii) are in addition to and in no way a duplication of the services for which compensation is authorized under (i). The payments authorized by (ii) are similar to location differentials now authorized, having to do with the movement and handling of milk, and are available to any plant operator, irrespective of whether or not such operator is also a cooperative association. This type of allowance is designed to cover costs involved in the movement of milk from or to processing plants when marketing conditions are such as to necessitate such movements in order to maximize returns to all producers.

Eligibility of an association or operator to receive payments authorized by (i) and (ii) from a pool or fund as established by an order is further conditioned upon compliance with the applicable provisions of the order. These two provisions supplement each other and together provide a way whereby all producers who enjoy the benefits of such marketing services also carry a reasonable and proportionate share of the burden involved.

SEC. 8c (7). In the case of the agricultural commodities and the products thereof specified in subsection (2) orders shall contain one or more of the following terms and conditions:

(A) Prohibiting unfair methods of competition and unfair trade practices in the handling thereof.

(B) Providing that (except for milk and cream to be sold for consumption in fluid form) such commodity or product thereof, or any grade, size, or quality thereof shall be sold by the handlers thereof only at prices filed by such handlers in the manner provided in such order.

(C) Providing for the selection by the Secretary of Agriculture, or a method for the selection, of an agency or agencies and defining their power and duties, which shall include only the powers:

(i) To administer such order in accordance with its terms and provisions; (ii) To make rules and regulations to effectuate the terms and provisions of such order;

(iii) To receive, investigate, and report to the Secretary of Agriculture complaints of violations of such order; and

(iv) To recommend to the Secretary of Agriculture amendments to such order. [Sec. 6. (a)] (v) To make recommendations to the Secretary of Agriculture in respect to surplus removal programs, and to advise and assist the Secretary in the development and operation of such programs.

No person acting as a member of an agency established pursuant to this paragraph (C) shall be deemed to be acting in an official capacity, within the meaning of section 10, (g) of this title, unless such person receives compensation for his personal services from funds of the United States.

[Sec. 6 (b)] (D) Providing that handlers subject to the order shall submit to the agency or agencies established therein reports containing information necessary for proper administration of the order: Provided, That all information furnished to or acquired by the agency or agencies shall be kept strictly confidential by such agency or agencies, except that it may be used without identification of the person from whom it was received or acquired and that it may be submitted to the Secretary.

(E) Providing that handlers subject to the order shall keep such adequate books and records as will enable the filing and verification of reports as required by such order. (F) The provisions required by Section 10 (b) (2).

[Sec. 5] [D] (G) Incidental to, and not inconsistent with, the terms and conditions specified in subsections (5), (6), and (7) and necessary to effectuate the other provisions of such order.

Section 5 of the amending bill merely provides for the relettering of paragraph (D) made necessary by the insertion of three additional paragraphs in section 8c (7) of the Act.

Section 6 (a) of the amending bill amends section 8 c (7) (C) of the act by adding another subparagraph which will permit closer coordination in the operation of marketing agreements and orders with surplus-removal or diversion programs authorized by other Federal statutes. This provision does not imply that marketing agreement and order programs will necessarily be supplemented by other surplusremoval programs or that such agencies will always assist in the operation of surplus-removal programs. It merely permits such coordination when the Secretary determines it to be desirable. Particular types of surplus-removal programs frequently necessitate the use of some agency closely associated with the industry. Where marketing agreement and order programs are in effect the agencies established thereunder may be the most logical ones to use.

Section 6 (b) of the amending bill adds three paragraphs to subsection (7) of section 8c of the act describing additional provisions which may be included in any order issued under section 8c. The first paragraph (par. (D)) authorizes the inclusion of a provision requiring handlers to submit to the agency established under the order reports containing information essential for its proper administration and providing for the confidential treatment of such information in harmony with well-established governmental practices and similar to that already provided with respect to information which the Secretary may secure pursuant to section 8d of the act.

The second paragraph (paragraph (E)) is a companion to paragraph (D) and specifically authorizes the inclusion of provisions in an order that would prevent handlers from thwarting its manifest purpose by disposing of records before adequate opportunity was had for checking reports based thereon, or by keeping or revealing records that are

wholly inadequate for the filing and verification of reports required by an order.

The third paragraph (paragraph (F)) is to reconcile what appears to be a contradiction in the present wording of the act where, in subsections (5) and (6) of section 8c, it states that orders shall contain one or more of the terms and conditions set forth in these subsections and, except as provided in subsection (7), no others; and section 10 (b) (2), which declares that orders shall provide that each handler subject thereto shall pay his pro rata share of expenses of administration. The effect of this paragraph is to remove this apparent inconsistency by the incorporation of section 10 (b) (2) into subsection (7) of section 8c. The text of section 10 (b) (2) appears in full preceding the explanation of section 14 of this bill.

SEC. 8c (8). Except as provided in subsection (9) of this section, no order issued pursuant to this section shall become effective until the handlers (excluding cooperative associations of producers who are not engaged in processing, distributing, or shipping the commodity or product thereof covered by such order) of not less than 50 per centum of the volume of the commodity or product thereof covered by such order which is produced or marketed within the production or marketing area defined in such order have signed a marketing agreement, entered into pursuant to section 8b of this title, which regulates the handling of such commodity or product in the same manner as such order [Sec. 15 (1)] [, except that as to citrus fruits produced in any area producing what is known as California citrus fruits no order issued pursuant to this subsection (8) shall become effective until the handlers of not less than 80 per centum of the volume of such commodity or product thereof covered by such order have signed such a marketing agreement]: Provided, That no order issued pursuant to this subsection shall be effective unless the Secretary of Agriculture determines that the issuance of such order is approved or favored:

(A) By at least two-thirds of the producers who [Sec. 15 (3)] [(except that as to citrus fruits produced in any area producing what is known as California citrus fruits said order must be approved or favored by three-fourths of the producers),] during a representative period determined by the Secretary, have been engaged, within the production area specified in such marketing agreement or order, in the production for market of the commodity specified therein, or who, during such representative period, have been engaged in the production of such commodity for sale in the marketing area specified in such marketing agreement, or order, or

(B) By producers who, during such representative period, have produced for market at least two-thirds of the volume of such commodity produced for market within the production area specified in such marketing agreement or order, or who, during such representative period, have produced at least two-thirds of the volume of such commodity [Sec. 7] [sold] produced for sale within the marketing area specified in such marketing agreement or order.

SEC. Sc (9). Any order issued pursuant to this section shall become effective in the event that, notwithstanding the refusal or failure of handlers (excluding cooperative associations of producers who are not engaged in processing, distributing, or shipping the commodity or product thereof covered by such order) of more than 50 per centum of the volume of the commodity or product thereof [Sec. 15 (2)] [(except that as to citrus fruits produced in any area producing what is known as California citrus fruits said per centum shall be 80 per centum)] covered by such order which is produced or marketed within the production or marketing area defined in such order to sign a marketing agreement relating to such commodity or product thereof, on which a hearing has been held, the Secretary of Agriculture, with the approval of the President, determines:

(A) That the refusal or failure to sign a marketing agreement (upon which a hearing has been held) by the handlers (excluding cooperative associations of producers who are not engaged in processing, distributing, or shipping the commodity or product thereof covered by such order) of more than 50 per centum of the volume of the commodity or product thereof [Sec. 15 (2)] [(except that as to citrus fruits produced in any area producing what is known as California citrus fruits said per centum shall be 80 per centum)] specified therein which is produced or marketed within the production or marketing area specified therein tends to