Why Does the Government Regulate the Buying Price of Milk?
Milk prices in the United States are controlled by the federal government and have been since the early twentieth century in accordance with a program intended to protect the financial stability of dairy farmers.
Other People Are Reading
-
History
-
A federal program for dairy farms was created during the Great Depression. During the 1930's, a federal program was put in place to regulate the price of milk in order to guarantee that dairy farms would make a profit on their product. The Great Depression had created an environment in which a steady price for milk that farmers could count on was necessary to continue the business.
Current Rationale
-
To continue their business, most dairy farmers cooperate with the federal government. Since this federal program has not been repealed and continues to regulate the price of milk, it is difficult for a dairy farm to operate outside its limits and continue to make a profit. Because of this, almost all dairy farmers participate in the program to this day.
-
Repercussions
-
The law can affect consumers, such as school children. Because the federal government controls the price of milk with the intent of protecting dairy farmers from going out of business, milk prices are increased by region accordingly. The federal government might outlaw a free milk program in elementary schools, for example, if the production cost for the milk is too high to support it.
-
References
- Photo Credit Container of milk. Plastic milk bottle image by L. Shat from Fotolia.com baby cow image by green308 from Fotolia.com milk image by Ewe Degiampietro from Fotolia.com girl with milk-moustache holding glass of milk image by Nikolay Okhitin from Fotolia.com
