BRANNAN, SECRETARY OF AGRICULTURE, v. STARK ET AL.
NO. 6.
Supreme Court of the United States
Argued October 9, 1951. Decided March 3, 1952.
342 U.S. 451
Seward A. Miller, Frederic P. Lee and Maurice A. Gellis submitted on brief for the Dairymen‘s League Co-operative Association, Inc.
Edward B. Hanify argued the cause for respondents. With him on the brief were Harry Polikoff and Lipman Redman.
Reuben Hall and Waldo Noyes filed a brief for the New England Milk Producers’ Association et al., as amici curiae, urging reversal.
MR. JUSTICE CLARK delivered the opinion of the Court.
This action by dairy farmers, nonmembers of cooperative associations, concerns 1941 amendments to an order of the Secretary of Agriculture dealing with the marketing of milk in the Boston area. It was previously here as Stark v. Wickard, 321 U. S. 288 (1944), where it was held that the respondents had such an interest in the Order as to give them legal standing to object to those of its provisions here under attack. Upon remand the provisions were held invalid by the District Court, 82 F. Supp. 614, and that decision was affirmed in the Court of Appeals for the District of Columbia Circuit. 87 U. S. App. D. C. 388, 185 F. 2d 871. We granted certiorari. 341 U. S. 908.
The question now presented is whether those amendments to the Order which provide for certain payments to cooperative associations are within the authority granted the Secretary by the Agricultural Marketing Agreement Act of 1937.1 The respondents seek to enjoin the enforcement of the provisions in question.
The purpose of the Act and the nature of the Secretary‘s Order No. 4 thereunder2 are set out in some detail in Stark v. Wickard, supra, at 291-302. It is here sufficient to note the following aspects of Order No. 4, as amended: In the Order, issued pursuant to the Act, the Secretary divided all milk marketed in the Greater Boston area into Class I, which is sold as fluid milk, and Class II, which is used for other purposes such as the manufacture of butter and cheese. The Order provides for the fixing of minimum prices to be paid by handlers for each of these classes of milk. Each handler pays for milk in accordance with the amount of each class he has purchased. Producers, however, are paid the same price for milk delivered no matter what use is made of the particular milk by the handler. The Market Administrator computes, on the basis of prices paid by handlers, the value of all milk sold in the area each month. After making certain adjustments, he divides that value, as adjusted, by the total quantity of milk sold in the area during the month, to determine the “blended price,” which is the price actually paid the producer. One adjustment made in determining the blended price is
The disputed provisions were introduced into the Boston Order in 1941, after hearings called by the Secretary. Affidavits, filed by representatives of the Secretary in support of his motion for summary judgment in the District Court, show the following: A major issue at the hearings was the amount of a uniform allowance, previously 26¢ per hundredweight, which was reflected in the price paid by all handlers for Class II milk.5 This allowance resulted in a lower price to handlers for Class II milk than for Class I milk. It was intended to defray the cost of handling surplus milk. There was a considerable variance in milk plant costs which was thought to make continuance of a uniform rate undesirable. Cooperative plants showed higher costs than those of proprietary handlers. That difference was attributable not only to the cooperatives’ maintenance of a reserve supply to meet irregular demands of proprietary handlers for Class I milk, but also to overcapitalization and excess capacity which had existed prior to any federal regulation. To meet these higher costs cooperatives proposed a lower uniform allowance for Class II milk, coupled with
Section 8c (5) of the Act provides that orders relating to milk and its products shall contain one or more of certain enumerated terms and conditions, “and (except as provided in subsection (7)) no others” (emphasis added).6 It is paragraph (D) of subsection (7) upon which the
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.
“(D) Providing that, in the case of all milk purchased by handlers from any producer who did not regularly sell milk during a period of 30 days next preceding the effective date of such order for consumption in the area covered thereby, payments to such producer, for the period beginning with the first regular delivery by such producer and continuing until the end of two full calendar months following the first day of the next succeeding calendar month, shall be made at the price for the lowest use classification specified in such order, subject to the adjustments specified in paragraph (B) of this subsection (5).
“(E) Providing (i) except as to producers for whom such services are being rendered by a cooperative marketing association, qualified as provided in paragraph (F) of this subsection (5), for market information to producers and for the verification of weights, sam-
The payments to the cooperative associations are said to be justified as remuneration for services performed for the market by the associations. To qualify for the pay-
pling, and testing of milk purchased from producers, and for making appropriate deductions therefor from payments to producers, and (ii) for assurance of, and security for, the payment by handlers for milk purchased.
“(F) Nothing contained in this subsection (5) is intended or shall be construed to prevent a cooperative marketing association qualified under the provisions of the Act of Congress of February 18, 1922, as amended, known as the ‘Capper-Volstead Act‘, engaged in making collective sales or marketing of milk or its products for the producers thereof, from blending the net proceeds of all of its sales in all markets in all use classifications, and making distribution thereof to its producers in accordance with the contract between the association and its producers: Provided, That it shall not sell milk or its products to any handler for use or consumption in any market at prices less than the prices fixed pursuant to paragraph (A) of this subsection (5) for such milk.
“(G) No marketing agreement or order applicable to milk and its products in any marketing area shall prohibit or in any manner limit, in the case of the products of milk, the marketing in that area of any milk or product thereof produced in any production area in the United States.”
Indeed, those “services” which the Secretary principally urges as justifying the payments do not appear among the expressed prerequisites for the payments. Chief among the activities claimed to benefit all producers are those which tend to maintain an adequate supply of fluid milk at all times and to dispose of surplus supply. A principal source of the problems of milk marketing is the seasonal character of milk production. Herds sufficient to meet the demand for fluid milk during the winter months produce much more than enough to satisfy that demand during the summer months. It is contended that the cooperative associations handle a proportionately larger share of surplus milk than other handlers. It appears that they engage in the manufacture of milk products as a means of absorbing the surplus, and otherwise aid in obviating the “dumping” of surplus and discouraging the reduction of herds to a point below that necessary to supply the demand in the season of low production. It may be conceded that these activities are indirectly beneficial to the whole market, even though they are engaged in for the direct advantage of members only. However, proprietary handlers also carry on activities of this kind, and their plants handle two-thirds as much surplus
Other “services” of the cooperatives which are claimed to be beneficial to all producers are, as they affect the issue here, relatively insignificant. These activities are, like the others, primarily designed for the advantage of mem-
In these circumstances, we cannot say that the disputed provisions fall within the authority granted by the catchall phrases of § 8c (7) (D) of the Act. We note at the outset that § 8c (5) states in specific and lengthy detail the provisions which may be included in milk marketing orders. That subsection lays down comprehensive directions for classification, pricing, and the operation of the equalization pool mechanism, particularly as to adjustments and deductions employed in determining the blended price. But § 8c (5) does not authorize the provisions challenged here. Section 8c (7) authorizes a congeries of general terms which may be included in all marketing orders, including those dealing with commodities other than milk and milk products. The Secretary claims authority for the provisions in question is given by the last paragraph of this omnibus subsection, a paragraph authorizing the inclusion of auxiliary provisions “incidental to . . . the terms and conditions specified in subsections (5), (6), and (7).”13 Yet it is claimed that the
The payments to cooperatives are inconsistent with § 8c (5) (A), which provides that all handlers shall pay uniform prices for each class of milk, subject to certain adjustments of no concern here. The discriminatory effect of the payments becomes the more evident when they are considered in context with the reduction in the uniform allowance to all handlers on the price of Class II milk. That reduction was simultaneous with the establishment of the system of payments to be made to cooperatives only and to be funded by deductions from prices paid all producers. The result would have been substantially similar if the allowance to proprietary handlers had been reduced while the allowance to cooperatives had been permitted to remain at its previous higher level. Such a lack of uniformity in prices paid by handlers would clearly have contravened § 8c (5) (A).
The deduction for payments to cooperatives is inconsistent with § 8c (5) (B), which requires the payment of uniform prices to all producers for all milk delivered, subject to certain adjustments not here pertinent. It has been contended that the deduction does not affect the uniform price of milk, but represents only a reimburse-
Since the provisions for payments to cooperatives are not incidental to § 8c (5) and (7), but are inconsistent with the former subsection, we need not determine whether they are “necessary to effectuate the other provisions”14 of the Order, the third requirement of § 8c (7) (D).
When the directly relevant provisions of the Act thus demonstrate lack of authority for the payments to cooperatives, no power to require them can be implied from the general instruction of § 10 (b) (1) to the Secretary, directing him to accord “recognition and encouragement” to cooperative associations.15
We have no occasion to judge the equity or the wisdom of the payments to cooperatives involved in this case. We hold that they are not authorized by the Act.
Affirmed.
MR. JUSTICE JACKSON and MR. JUSTICE MINTON took no part in the consideration or decision of this case.
MR. JUSTICE BLACK, with whom MR. JUSTICE REED and MR. JUSTICE DOUGLAS concur, dissenting.
I dissent and would sustain the provisions of the Secretary of Agriculture‘s Boston milk order which the majority here invalidates. Those provisions require that cooperatives be reimbursed for a part of the cost they incur in performing services which the Secretary and the
In general the Secretary‘s order fixes prices and regulates distribution of milk in the Greater Boston area. Under this marketing system the purchase price of all milk sold by farmers in the area is paid into a collective fund or pool. After deduction of legally authorized amounts it is the duty of the Government‘s market administrator to distribute the fund so that all contributing farmers will receive so far as possible equal amounts for equal quantities of milk of the same quality. The difficulty of achieving this uniformity of price as between cooperative and non-cooperative farmers is complicated by many factors. Non-member farmers receive direct payment for their milk from this market pool fund. But highly material here is the fact that the pool funds are not distributed to farm cooperative association members but instead are paid directly to the associations of which they are members. These associations then deduct certain expenses before distributing the balance to their member farmers. Many of these expenses are incurred by the association in performing beneficial market-wide
The provisions here nullified prescribe a legal and peaceful method to require non-cooperative farmers to pay their fair share of market costs, thereby preventing the recurrence of the kind of violent strife with which this country became all too familiar before the present national farm policy was adopted. The provisions have been a part of the Boston order since 1941—eleven years. In accordance with them more than one and a half million dollars have been paid to cooperatives.1 If illegally received, I suppose the money is illegally held. Whether these farmer associations can survive the Pandora‘s box of lawsuits this case is likely to turn loose is anybody‘s guess. Perhaps most dairy farmers in New England would not of their own accord file suits against the cooperatives, for the record indicates an overwhelming farmer support for the market order including these challenged
It may be suggested that despite possible floods of litigation, the cooperatives can be saved from complete bankruptcy by statutes of limitations, judicially created defenses, finespun legal or verbal distinctions, or even by emergency congressional legislation. But if some might happen to befriend cooperatives in the future, the blow today inflicted is hardly calculated to make cooperatives very enthusiastic about performing the important functions in the market program that Congress wanted them to.3 Moreover, these particular New England associations are not the only ones placed in imminent jeopardy
Congress intended cooperatives to be what they actually have been—the backbone of the farm market system and the dynamo which makes the system function. Without them, many think that program would have been a flop; with their help comparative peace has now come to an industry that in the twenties and early thirties was divided into fighting factions engaging in bitter warfare and bloodshed on the nation‘s highways. Regardless of the consequences, however, the majority‘s body blow to cooperatives would be justified if required by congressional command. But Congress has expressed its desire precisely to the contrary. This is shown, I believe beyond all doubt, by the language, history, background and administration of the marketing laws.
I feel deeply that the Court‘s action in this case checkmates the congressional will, unjustifiably inflicts a grievous wrong on cooperatives, and plays havoc with a national farm policy that is working peacefully and well. The judiciary should not cavalierly throw a monkey wrench into its machinery.
An inherent problem of the milk industry is that cows produce more milk at some seasons of the year than at others. This means a seasonal excess of supply over demand which can result in disastrous price cutting in an uncontrolled market. In an attempt to avoid the harmful consequences of price cutting farmers combined in cooperative associations which agreed to find a market for all the milk their members produced. Through the channel of collective bargaining, they were able to obtain better prices and a wider market for fluid milk. With the surplusage that still remained, they turned to the manufacture of cheese, butter, and other by-products, even though their manufacturing plants were forced to remain idle during the seasons of no surplusage. Congress itself recognized the inherent value of these cooperative organizations, and with a view to helping farmers improve their market position, it passed the Capper-Volstead Act in 19225 and the Agricultural Marketing Act of 1929.6
These Acts treated cooperative associations as useful governmental instrumentalities to achieve congressional agricultural policies. With such help cooperatives made progress, although in every market area there were some producers who refused to join. These non-member producers, without paying anything for it, nevertheless received direct advantages from the work of the cooperatives in raising milk prices, diverting surplusage, and
Thus, an acute agricultural problem has long been one of devising means whereby each producer would pay his fair share of the cost of rendering needed market-wide services. Prior to passage of the Agricultural Adjustment Act of 1933, the cooperatives themselves used their bargaining power to meet the situation. A 1929 contract between the cooperative association and handlers (purchasers of milk from producers) in the Chicago marketing area illustrates the methods used.8 All handlers were required to agree not to purchase milk from non-member producers unless the latter agreed to a certain deduction. This deduction was equal to that the handlers were required to make in the case of milk purchased from member-producers. In both instances the deduction was paid by the handlers to the cooperative to defray its expense incurred for the services. This procedure insured that no producer of milk received benefits without paying something for them.
The Agricultural Adjustment Act of 1933 empowered the Secretary of Agriculture to regulate the milk industry by a system of licensing and marketing agreements. In the licenses issued under this Act, the Secretary included various provisions relating to payments to cooperatives for the rendition of marketing services. Some licenses contained provisions similar to those of the Chicago contract of 1929. Others contained provisions which required9
In 1935 Congress amended the Agricultural Adjustment Act to provide for market regulation by means of orders. The first Boston milk order was issued under § 8 (b) of that Act as amended. That order required the payment of a higher price per hundredweight for cooperative milk than for non-cooperative milk. This was based on the Secretary‘s finding that “the differential in prices to associations of producers, and producers, is justified as a reasonable allowance for services actually performed by associations of producers.” Green Valley Creamery v. United States, 108 F. 2d 342, 345. This differential which remained in the order from the date it was issued in 1936 until 1941 was held valid by the Court of Appeals for the First Circuit in Green Valley Creamery v. United States, supra. See also United States v. Rock Royal Co-op., 307 U. S. 533, 562, 565. From 1941 to the present the Secretary‘s Boston order has contained the kind of cooperative payment provisions now in issue, and treated by the majority as a gratuity.
In summary, before 1933 cooperative associations forced payments for their services by exertion of collective
The Court brushes aside the foregoing history and invalidates the cooperative payment provisions. Its asserted reason for doing so is that statutory authority for the payments is lacking. We are left in the dark as to whether the Secretary lacks all authority to make payments to any and all persons, or has authority to pay everybody else except cooperatives, or has authority to pay everybody else except New England cooperatives. The Court‘s opinion leads me to believe that its real basis for invalidation is a belief that:
- The payments are a mere gratuity, a subsidy to inefficiently operated cooperatives.15
- The Secretary‘s order properly construed does not require cooperatives to perform market-wide services; therefore they should be paid nothing, regardless of the fact that they actually performed such services for the past eleven years.
- It is evil and illegal to pay cooperatives for working to benefit a whole group of which they are a part.
First. If these payments were mere gratuities as the District Court held and as intimated by the majority, I too would hold them illegal. However, they cannot be considered gratuities because administrative findings of fact and the whole record show precisely the contrary. I cannot agree that it is for this Court to redetermine facts found by the Secretary after at least three exhaus-
“The present plan of payments to cooperatives, which became effective August 1, 1941, was based on the consideration that to achieve the benefits to all producers which the order is designed to provide two types of activity by producers’ cooperative marketing organizations are desirable: (1) presentation of evidence at hearings concerning the needs of producers with respect to prices for milk and differentials to reflect handling costs to furnish an adequate basis for constructive amendments to the order, and (2) assumption of responsibility for a reserve of milk to meet the irregular needs of distributors which is essential in a market which provides market-wide equalization among all producers of the total value of the milk. . . . From these considerations it was
concluded that provision for payments to cooperative associations is considered necessary to equitably apportion the total value of milk among producers. The testimony in support of the proposal to completely eliminate this feature of the order does not show that these considerations were substantially erroneous.” 9 Fed. Reg. 3057, 3059.
In 1947 still another unsuccessful attempt was made to eliminate these provisions. At this public hearing the Secretary expressly reaffirmed the prior crucial findings on which the order rests. 12 Fed. Reg. 4921, 4928. It is the provisions of this 1947 order now held invalid.
There was an abundance of evidence to support the Secretary‘s findings that the cooperatives in the Boston area were equipped to and did constantly provide substantial services to help sustain the market price of milk and to stabilize its distribution. Evidence showed that New England cooperatives maintained expensive manufacturing equipment to take care of surplus milk; that most of the surplus milk was concentrated in cooperative plants and that even proprietary handlers normally depended on cooperatives in time of short production. There was testimony that all these activities imposed huge financial burdens on cooperative associations and that unless non-members were made to bear part of these large costs, cooperating farmers, who saved the market from the chaos of a fluctuating milk supply, would actually get less net amounts for their milk than did the non-members who merely reaped the harvest sown by others.
The foregoing suggests but a very minor part of the evidence on which the Secretary found that the cooperative payment provisions were consistent with the Act‘s terms and necessary to effectuate the order‘s other provisions designed to maintain a smoothly functioning market. The Court of Appeals agreed with the Secretary as to the value of cooperative services. 87 U. S. App.
Second. The majority seems to imply that even if the cooperatives do render valuable market-wide services they ought not to be paid. This is because the Court, reading the order with punctilious nicety, finds that it lacks words expressly compelling cooperatives to render the precise services for which they are paid. I fail to see why cooperatives should not be paid for work they actually do, but in any event I read the order as requiring that those services be performed.
Section 904.10 (b) (1) specifies the amounts to be paid cooperatives for their work in bringing about better milk prices for all farmers. This is the second broad type of service which the Secretary found cooperatives should be paid for. In order to be entitled to receive any payment whatsoever for this service, a cooperative must not only comply with the provisions of the Capper-Volstead Act, but also must “collaborate(s) with similar associations in activities incident to the maintenance and strengthening of collective bargaining by producers and the operation of a plan of uniform pricing of milk to handlers.”19 If a cooperative does the things required by the Capper-Volstead Act and the last-mentioned section of the order, it is bound to be working to bring about better milk prices for all dairy farmers in the area.
Third. The majority states that there is somewhat of an “incongruity” in allowing cooperatives to be paid for “vigorously prosecuting their own interests,” leaving the inference that there is something inherently evil and illegal in such payments. I do not see why. It seems more incongruous and wrong to me to let non-members get something for nothing and at the sole expense of the cooperating farmers. There is certainly no conflict of interest among farmers in connection with the obtaining of a higher price for the milk of all. The payments were made to achieve this end. Furthermore, I doubt if the majority would want to hold that Congress is barred from taking advantage of the belief of many that government regulation can be most effective where the fullest possible use is made of the aid and helpful services of those who are being regulated. I find it impossible to believe that Congress intended to compel the Secretary to hire more regular, all-time government employees to perform, and in many instances to duplicate, work that could be best and perhaps least irritatingly performed by farmer-owned and farmer-controlled associations.20 To the contrary,
Finally, I do not agree with the majority that statutory authority for these payments is lacking. The Act first authorizes the Secretary to take certain specified actions designed to set up a well-functioning government-controlled milk-market system. To avoid the inevitable rigidity of its expressly defined authorizations Congress went further and authorized the Secretary to provide for additional market mechanisms “Incidental to, and not inconsistent with, the terms and conditions specified . . . and necessary to effectuate the other provisions of such order.” 49 Stat. 750, 757,
A. Necessary.—The Secretary concluded that cooperative payments were “necessary” to effectuate the other terms of his order. An overwhelming majority of the farmers affected by the payment provision voted in favor of them. The administrative history of the Act shows that the payments have made a substantial contribution to the smooth operation of the Government‘s program. Congress itself has ratified these very provisions now in issue. All of this is enough for me; I would hold that the provisions are “necessary” within the meaning of the Act.
B. Incidental.—The majority holds that these payments are not “incidental” to the other terms of the order. This holding seems to be based on the idea that the payment provisions are too important to be merely “incidental.”23 This idea is in marked contrast to the Court‘s previous statement that “the payments to cooperatives have in each year constituted no more than a fraction of one percent of the total value of milk marketed in the area.” I do not doubt that these payments are of considerable importance in carrying out the basic market control system set up by the Act. But I deny that they are such independent ends in themselves that they are
C. Inconsistent.—The Court‘s holding that the cooperative payments are “inconsistent” with the Act is based on the notion that the order destroys uniformity of prices received by cooperative members and non-members to the detriment of non-members. The Court‘s holding in this regard rests in part on its unsupported and unsupportable findings that “receipts of nonmembers resulting from delivery of a given quantity of milk are smaller than those of the associations and their members. This is true because nonmembers are paid only the blended price while members receive, through their associations, the disputed payments in addition to the blended price.” The crucial error of these assumptions or findings of fact, whichever they are, is the Court‘s assertion that cooperative service payments “redound to members individually.” There is not only an absence of evidence to support this assertion, but it is contrary to the known facts of the way cooperatives work. The only possible support for such an extraordinary inference is by a renewed adoption of the theory that these payments are gratuities, a theory the Court of Appeals emphatically rejected. But this record actually shows that it costs the cooperatives more to perform the services than they are paid. It also shows that cooperatives are compelled to deduct the complete cost of these services long before the member farmers are paid for their milk. The result is that but for these payments the cooperative members are bound to get less than the blended price for their milk while non-members get the
In striking down these provisions of the Secretary‘s order, the Court has departed from many principles it has previously announced in connection with its supervision over administrative agents. Under these principles, the Court would refrain from setting aside administrative findings of fact when supported by substantial evidence;24 we would give weight to the interpretation of a statute by its administrators;25 when administrators have interpreted broad statutory terms, such as here involved, we would recognize that it is our duty to accept this interpretation even though it was not “the only reasonable one” or the one “we would have reached had the question arisen in the first instance in judicial proceedings.” Unemployment Comm‘n v. Aragon, 329 U. S. 143, 153. Only a short while ago in a Labor Board case this Court said: “Not only are the findings of the Board conclusive with respect to questions of fact in this field when supported by substantial evidence on the record as a whole, but the Board‘s interpretation of the Act and the Board‘s application of it in doubtful situations are entitled to weight.” Labor Board v. Denver Bldg. Council, 341 U. S. 675, 691, 692. True, this was said with reference to a Labor Board case under the Taft-Hartley Act, but findings and interpretations of the Secretary of Agriculture should stand on no lower level.
I dissent.
Notes
In 1941 farmers in the Boston milk area were given an opportunity to express their approval or disapproval of the order. They voted as follows:
| For | Against | |
| Cooperating farmers | 11,587 | 0 |
| Non-member farmers | 694 | 61 |
| Total vote | 12,281 | 61 |
Section 904.8 (b) of the Order requires the Market Administrator, in computing the blended price, to deduct, among other items, the total amount of cooperative payments required by § 904.10 (b), which provides:
“(b) Cooperative payments. On or before the 25th day after the end of each month, each qualified association shall be entitled to receive a cooperative payment from the funds provided by handlers’ payments to the market administrator pursuant to § 904.9. The payment shall be made under the conditions and at the rates specified in this paragraph, and shall be subject to verification of the receipts and other items upon which such payment is based.
“(1) Each qualified association shall be entitled to payment at the rate of 1 cent per hundredweight on the milk which its producer members deliver to the plant of a handler other than a qualified association; except on milk delivered by a producer who is also a member of another qualified association, and on milk delivered to a handler who fails to make applicable payments pursuant to § 904.9 (b) (2) and § 904.11 within 10 days after the end of the month in which he is required to do so. If the handler is required by paragraph (e) of this section to make deductions from members of the association at a rate lower than 1 cent per hundredweight, the payment pursuant to this subparagraph shall be at such lower rate.
“(2) Each qualified association shall be entitled to payment at the rate of 2 cents per hundredweight on milk received from producers at a plant operated by that association.”
§ 8c (5), note 1, supra:
“(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, 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:
(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 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 three-fourths of the volume of such milk produced for market during such period;
46 Stat. 11,“(a) Application and qualification for cooperative payments. Any cooperative association of producers duly organized under the laws of any state may apply to the Secretary for a determination that it is qualified to receive cooperative payments in accordance with the provisions of this section. Upon notice of the filing of such an application, the market administrator shall set aside for each month, from the funds provided by handlers’ payments to the market administrator pursuant to § 904.9, such amount as he estimates is ample to make payment to the applicant, and hold it in reserve until the Secretary has ruled upon the application. The applicant association shall be considered to be a qualified association entitled to receive such payments from the date fixed by the Secretary, if he determines that it meets all of the following requirements.
“(1) It conforms to the requirements relating to character of organization, voting, dividend payments, and dealing in products of nonmembers, which are set forth in the Capper-Volstead Act and in the state laws under which the association is organized.
“(2) It operates as a responsible producer-controlled marketing association exercising full authority in the sale of the milk of its members.
“(3) It systematically checks the weights and tests of milk which its members deliver to plants not operated by the association.
“(4) It guarantees payment to its members for milk delivered to plants not operated by the association.
“(5) It maintains, either individually or together with other qualified associations, a competent staff for dealing with marketing problems and for providing information to its members.
“(6) It constantly maintains close working relationships with its members.
“(7) It collaborates with similar associations in activities incident to the maintenance and strengthening of collective bargaining by producers and the operation of a plan of uniform pricing of milk to handlers.
“(8) It is in compliance with all applicable provisions of this subpart.”
See, e. g., Twin City (St. Paul and Minneapolis) Area Milk License No. 5, Ex. A, Arts. II and III, issued August 29, 1933 and terminated February 16, 1934; and License No. 32, Ex. A, § II, issued February 12, 1934 and terminated April 18, 1944.