Opinion ID: 106423
Heading Depth: 1
Heading Rank: 2

Heading: the compensatory payment provision.

Text: It will thus be seen that this system of regulation contemplates economic controls only over pool-handler plants since only such handlers are required to pay the blend price to their producers and to account to the Producer Settlement Fund. If limited to the provisions recounted above, the regulatory scheme would not affect milk brought into the New York-New Jersey marketing area by handlers who are primarily engaged in supplying some other market and whose producers are not located within the New York-New Jersey area. Some of the regional orders now in effect do not undertake any economic regulation of outside or other source milk. [6] But it is quite obvious that under certain circumstances some regulation of such milk may be necessary. Accordingly, § 8c (7) (D) of the Act, 7 U. S. C. § 608c (7) (D), authorizes the Secretary to include in his regulating orders conditions that are incidental to terms expressly authorized by the statute, and that are necessary to effectuate the other provisions of such order. A handler who brings outside milk into a marketing area may disrupt the regulatory scheme in at least two respects: (1) Pool handlers in the marketing area who are required to pay the minimum class prices for their milk may find their selling prices undercut by those of nonpool handlers dealing in outside milk purchased at an unregulated price. (2) Producers in the marketing area, whose blend price depends on how much of the relatively constant fluid-milk demand they supply in a given month, may find the outside milk occupying a portion of the premium market, thus displacing the pool milk and forcing it into the less rewarding surplus uses, with the ultimate effect of diminishing the blend price payable to producers. In an effort to cope with these disruptive economic forces, the Secretary devised his compensatory payment plan. In essence the plan imposes special monetary exactions on handlers introducing outside milk for fluid consumption into a marketing area in months when there is a substantial surplus of milk on the market. [7] Of the 68 regional milk orders which establish marketwide pools, [8] 64 contain compensatory payment provisions of one kind or another. The Order now before us is typical of 23 of these orders. [9] The Order provides that a handler who brings outside milk into the New York-New Jersey area and sells it for fluid use must pay to the pool's producers, through the Producer Settlement Fund, an amount equal to the difference between the minimum prices for the highest and for the lowest use classifications prevailing in that area. In other words, for each hundredweight of nonpool milk sold for Class I use in the New York-New Jersey area, a payment equal to the difference between Class I and Class III prices must be made by the seller to the Producer Settlement Fund.