Full opinion text
I. INTRODUCTION On July 14, and August 9, 1977, the Secretary of Agriculture, Bob Bergland, published amendments to 7 C.F.R. §§ 1421 and 1425. 42 Fed.Reg. 36234, et seq., and 40175, et seq. (1977). The basic purpose of the amendments was to add barley, corn, grain sorghum, oats, rye, and wheat to the list of commodities for which approved cooperative marketing associations may obtain price support loans (referred to in this litigation as “Form G” loans) for their producer-members. The final publication of the amendments occurred on August 9,1977, 42 Fed.Reg. 40175-40188. (PX # 10). By this action, filed on August 9,1977, plaintiff Hiatt Grain & Feed, Inc., on behalf of itself and all others similarly situated, challenged the promulgation and implementation of the amended regulations. By order of September 1,1977, this litigation was certified as appropriate for class action treatment pursuant to F.R.Civ.P. 23, 28 U.S.C. The plaintiff class is composed of grain dealers (hereinafter referred to as “independents” or “privates”) which are not cooperative organizations. The scope of the class was described in the certification order as follows: The scope of the class should cover that group defined by plaintiff in its complaint, that is, all persons, firms, partnerships, corporations, and other business entities who own or operate facilities for the storage, purchase, sale, handling, processing, merchandising, or marketing of barley, corn, grain sorghum, oats, rye, and wheat, or any one or more of said commodities, but who do not and cannot meet the eligibility requirements to participate in the price support program under the regulations issued by the Secretary of Agriculture, and who are not cooperative marketing associations. The interest of the plaintiff class of independent or private grain dealers is counterpointed by the intervenors, who were allowed to intervene in this action by order of September 6, 1977. The intervenors represent the interests of the cooperative grain dealers of the United States. The intervenors are a regional cooperative (FAR-MARCO), a local cooperative (Farmer’s Cooperative Union of Sterling, Kansas), and several individual wheat growers. A motion for a temporary restraining order was filed along with the complaint. By agreement of the parties, a temporary restraining order was entered and remained effective until September 9,1977, when this Court, after two days of hearings, entered an order denying plaintiff’s motion for a preliminary injunction. The order expressed no opinion on the merits of the litigation, but denied preliminary relief upon the grounds that plaintiff had failed to prove that immediate irreparable injury would result to the class in the absence of such relief. Despite the Court’s dissolution of the temporary restraining order, it is our information that defendant has voluntarily refrained from fully implementing the challenged regulations pending the resolution of this case. (Robbins Depo., p. 11) A trial on the merits of this action was held November 7-14, 1977. All post-trial memoranda were submitted by the parties by January 6, 1978. A brief factual background concerning the case was contained in the order denying the motion for a preliminary injunction. We shall now restate that factual summary, with some alteration. A price support loan works generally like this: When a farmer delivers his grain to an elevator (private or cooperative), he may wish to sell it at that time. If he does not, he will store it with the elevator pending his decision to sell. If the farmer is not ready to sell, but needs money to carry on his farming operation, he may as one option take out a government price support loan. This involves paying advance storage charges to the elevator, receiving a receipt for the grain, and obtaining the price support loan from the county A.S.C.S. office. The loan is non-recourse and the present interest rate is 6%. If the price of the grain is significantly higher than the price support level (presently about $2.25/bushel for wheat), there is less reason to obtain such a loan than if the price of wheat is near or below the loan rate. If a loan is taken out while the price of wheat is near the loan rate, then the farmer may sell the wheat and use the proceeds to pay off the loan. However, if the price of wheat does not go up, the farmer may fare better by keeping the proceeds of the loan and allowing the government to “takeover” the grain. This is the farmer’s option and illustrates the non-recourse nature of the loan. Only if the farmer elects to sell the wheat and pay off the loan need he pay the interest charge. Price support loans to farmers are administered by the Commodity Credit Corporation (C.C.C.), and the Agricultural Stabilization and Conservation Service (A.S.C.S.). Both the C.C.C. and the A.S.C.S. are under the general supervision of defendant Berg-land in his capacity as Secretary of the United States Department of Agriculture (U.S.D.A.). As early as the 1930’s, price supports for cotton were administered through cooperative marketing associations to their producer-members. Over the years, the list of crops for which cooperatives could receive (and pass on to their producer-members) price support loans was expanded by various Secretaries of Agriculture to include such commodities as rice, honey, soybeans, tung oil, and dry edible beans. By the challenged regulations, defendant seeks to expand the list of crops for which approved cooperatives may receive (and pass on to their producer-members) price support loans to include barley, corn, grain sorghum, oats, rye, and wheat. Insofar as the interests of the parties before the Court are concerned, wheat is the crop which is of immediate and primary concern. Plaintiff’s concern is prompted largely by the formation of a marketing program by intervenor FAR-MAR-CO. In the 1976 crop year FAR-MAR-CO initiated a marketing program called Pro-Mark, which was designed to allow FAR-MAR-CO, a large regional cooperative, to effectively enter the field of exporting grain (traditionally dominated by non-cooperative multinational corporations) by utilization of large “pools” of grain which would be supplied by producer-members. The concept of pooling is defined in PX # 28, a treatise by the Department of Agriculture entitled Improving the Export Capability of Grain Cooperatives, p. 40 (1976): Another method by which producers commit grain to local elevators is through pooling. This method is unique to cooperatives. Under such an arrangement, each producer commits a specified volume or acreage to the cooperative. He receives a cash advance at harvest, progress payments as the grain is sold, and a final payment once the pool is liquidated. The total of all payments equals the average price received by the cooperative for grain sold out of the pool, less cost of pool operation. Adjustments are made for quality differences. This description fairly applies to FAR-MAR-CO’s Pro-Mark program, under which farmer-producers voluntarily commit large amounts of grain to the local cooperatives, and ultimately FAR-MAR-CO. The producer-members voluntarily surrender the marketing decision to the co-op. Armed with a large pool of grain, FAR-MAR-CO endeavors to enter the grain export market and receive optimum prices for the producers who had committed their grain. In 1976, FAR-MAR-CO, through the Pro-Mark program, obtained a pool of about 33 million bushels of wheat. By October 31,1976, producer-members of cooperatives had committed to the Pro-Mark program 1977 crops which, after harvest, approximated 38 million bushels. Until fairly recently, price support loans were pegged at about $1.25 a bushel, while wheat prices were significantly higher. Therefore, farmers who committed part or all of their wheat crop to Pro-Mark were not disadvantaged by the fact that such an action rendered them ineligible to receive price support loans. However, at the time defendant initiated the process of promulgating the challenged regulations, the support loan price had been raised to around $2.25 per bushel while the market price of wheat had plummetted to a level at or below "the support price. Therefore, a farmer who committed his crop to the Pro-Mark program could very well have been (in the absence of the challenged regulations) at a marketing disadvantage. Thus, under the former regulations a farmer who did not commit his crop to Pro-Mark, but retained the marketing decision while selling through either a private grain-dealer or a cooperative, could obtain a price support loan. However, a farmer who committed his crop to Pro-Mark could not obtain the benefits of such a loan. The defendant promulgated the new regulations purportedly as part of a series of steps designed to boost the farm sector of the economy, and for the specific reason of eliminating perceived discrimination existent in prior farm support regulations. (Tr. 768, 770) The plaintiff class, as explained above, is composed of independent grain marketing companies that compete with cooperatives for the right to buy or store the grain produced by farmers. Most of the plaintiff class members operate so-called “country elevators.” The plaintiff’s motivation in bringing this lawsuit stems from the fear that the promulgation and implementation of the regulations in question will grant a large competitive advantage to the cooperative marketing associations and will result in serious economic injury to the plaintiff class. Plaintiff has unleased a barrage of attacks upon the proposed amendments to 7 C.F.R. §§ 1421 and 1425. The pretrial order contains a summary of these attacks. Prior to trial, the Court formulated six major issues in order to properly focus the attention of the parties during the trial. Those six issues, condensed from the allegations of the parties, were: 1. DOES THE PLAINTIFF HAVE STANDING TO CHALLENGE THE PROMULGATION AND IMPLEMENTATION OF THESE REGULATIONS? 2. WERE THE CHALLENGED REGULATIONS ISSUED WITHOUT AUTHORITY OF LAW? 3. WAS THE PROMULGATION OF THE REGULATIONS “ARBITRARY AND CAPRICIOUS”? 4. ARE THE REGULATIONS INVALID BECAUSE OF DEFENDANT’S FAILURE TO FILE AN ENVIRONMENTAL IMPACT STATEMENT? 5. ARE THE REGULATIONS INVALID BECAUSE OF DEFENDANT’S FILING OF AN ALLEGEDLY INADEQUATE ECONOMIC IMPACT STATEMENT? 6. ARE THE REGULATIONS INVALID BECAUSE THEY PROMOTE VIOLATIONS OF a) the Commodity Exchange Act; b) the Sherman Act and the CapperVolstead Act; and c) 15 U.S.C. § 713a-13? To these six major issues, we now add a seventh: 7. ARE THE REGULATIONS UNCONSTITUTIONAL BECAUSE THEY DEPRIVE THE PLAINTIFF CLASS OF DUE PROCESS AND EQUAL PROTECTION? Before addressing these seven major issues, the Court must first turn its attention to a post-trial motion to strike filed by intervenors. II. MOTION TO STRIKE After the trial of this case, intervenors filed a “Motion to Strike”, requesting that the Court strike from the record some of the exhibits and all of the testimony presented by plaintiff at the trial of this action-. This motion is prompted by intervenors’ fears that the Court intends to try this action de novo, rather than utilizing appropriate standards of judicial review of an administrative action. At the time of its rulings, the Court was aware of the consternation caused to defendant and intervenors by the consistent admission of testimony outside the administrative record. While the Court did not intend to try the action de novo, a liberal policy as to admission of evidence was consciously followed. The Court admitted the evidence proffered by plaintiff (and by defendant and intervenors in response) in an abundance of caution in this very complicated case. The Court felt that the liberal admission of evidence would be helpful for three reasons in particular. First, the extensive testimony and numerous exhibits presented by the parties, while transcending the administrative record, aided the Court’s understanding of the complex and technical issues of this case. Because of the evidence presented which was outside the administrative record, the Court is now in a much better position to understand and evaluate the evidence which was contained in the administrative record. Second, the evidence admitted was deemed by the Court to be essential to effective resolution of the question of whether defendant should have filed an environmental impact statement. The issues surrounding plaintiff’s contention in this regard are not purely legal in nature. As shall be explained in our N.E.P.A. discussion, the testimony submitted was helpful to resolution of this most difficult question. Third, the Court felt that the evidence which was allowed into the record provided assistance in the determination of the adequacy of the administrative record. In some cases, it might be very easy for a court, in a vacuum, to determine the adequacy of an administrative record. That is not the situation in this complex case. The Court, in reviewing the action, must determine whether all relevant factors were considered. Independent Meat Packers Ass’n v. Butz, 526 F.2d 228, 238 (8th Cir. 1975), cert. denied, 424 U.S. 966, 96 S.Ct. 1461, 47 L.Ed.2d 733 (1976). How is the Court to determine whether all relevant factors were considered in the administrative record without knowing what factors outside the administrative record were not considered in the decisionmaking process? Without desiring to hold a de novo review, the Court wished to fully assure itself that the administrative record upon which defendant’s decision was based was adequate. For reasons which shall be explained infra, the Court deems the administrative record in this case to be adequate. Given this finding, de novo review of the issues is inappropriate; defendant’s action must be judged in light of the administrative record. Therefore, the intervenors’ motion to strike is granted, and all challenged evidence is stricken, except to the following extent: 1) all information admitted shall be allowed to remain in the record to the extent that it merely serves the purpose of assisting the Court to understand the complex issues presented; 2) all evidence relevant to the determination of the environmental impact statement issue shall remain in the record and be considered for that purpose; 3) all information admitted shall be allowed to remain in the record for the limited purpose of allowing the Court to determine the adequacy of the administrative record; and 4) testimony of U.S.D.A. officials which is merely explanatory of the administrative record shall be considered for that limited purpose. To repeat, we find the administrative record upon which this decision was based to be adequate. We have no intention of trying this action de novo. Admittedly, the Court treads a thin line when it endeavors to evaluate evidence outside the administrative record for purposes of determining the. adequacy of the administrative record, while at the same time attempting to exclude that evidence while reviewing the substantive decision based upon the administrative record. This Court has tried mightily to appreciate and follow the distinction. III. DISCUSSION OF MAJOR ISSUES 1. DOES THE PLAINTIFF HAVE STANDING TO CHALLENGE THE PROMULGATION AND IMPLEMENTATION OF THESE REGULATIONS? It is the position of the intervenors that the plaintiff does not have standing to challenge the promulgation and implementation of the questioned regulations. Intervenors introduce their argument by setting forth the two major standing requirements. First, plaintiff must allege “injury in fact”; second, plaintiff must allege injury to an interest “arguably within the zone of interests to be protected” by the statutory framework under which the claim .arises. Association of Data Processing Serv. Organizations, Inc. v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970); Barlow v. Collins, 397 U.S. 159, 90 S.Ct. 832, 25 L.Ed.2d 192 (1970). Intervenors offer a bifurcated argument to reflect the two elements of the standing test set forth in Data Processing, and we shall organize our discussion along the same lines. A) INJURY IN FACT Intervenors argue that plaintiff does not have standing to bring this action because it does not meet the “injury in fact” portion of the Data Processing test for standing. Intervenors first argue that plaintiff does not meet this test because its analysis of the merits of the dispute is inaccurate and when an accurate analysis is made it can be determined that plaintiff will not be injured by the implementation of the challenged regulations. What intervenors argue, in essence, is that plaintiff cannot prove the merits of its claim. While plaintiff may be required to do more than merely allege standing, plaintiff should not be required to prove the merits of its claim before standing is granted. Yoder Bros., Inc. v. California-Florida Plant Corp., 537 F.2d 1347, 1360 n. 6 (5th Cir. 1976), cert. denied 429 U.S. 1094, 97 S.Ct. 1108, 51 L.Ed.2d 540 (1977). In arguing the merits of plaintiffs’ claim that a statutory violation exists, defendant has exceeded the scope of the inquiry raised by a standing challenge. Standing “focuses on the party seeking to get his complaint before a federal court and not on the issues he wishes to have adjudicated.” Flast v. Cohen, 392 U.S. 83, 99, 88 S.Ct. 1942, 1952, 20 L.Ed.2d 947 (1968). The relevant inquiry is whether plaintiffs have alleged an actual or threatened injury to themselves that is likely to be redressed by a favorable decision. Simon v. Eastern Ky. Welfare Rights Organization, 426 U.S. 2637-39, 96 S.Ct. 1917, 1924, 48 L.Ed.2d 450 (1976). They need not show that the decision will be in their favor ... To require otherwise would force plaintiffs to establish the validity of their claim for relief as a prerequisite to invoking federal jurisdiction. [American Medical Ass’n v. Mathews, 429 F.Supp. 1179, 1189 (N.D.Ill. 1977)] Intervenors then argue that because the nature of the injury which plaintiff has alleged is economic, it is insufficient to confer standing. Intervenors rely upon a trilogy of cases which held that businesses which are injured by the government’s action in aiding a competitor do not have standing “unless the right invaded is a legal right”. Perkins v. Lukens Steel Co., 310 U. S. 113, 125, 60 S.Ct. 869, 84 L.Ed. 1108 (1940); Tennessee Electric Power Co. v. T. V. A., 306 U.S. 118, 140, 59 S.Ct. 366, 369, 83 L.Ed.. 543 (1939); Alabama Power Co. v. Ickes, 302 U.S. 464, 479, 58 S.Ct. 300, 82 L.Ed. 374 (1938). The essence of this “legal interest” test is summed up in syllabus # 3 of the Tennessee Electric opinion: 3. The validity of a statutory grant of power can not be challenged merely because its exercise results in harmful competition. The damage is damnum absque injuria. Intervenors conveniently overlook the fact that the “legal interest” requirement for standing was rejected in Data Processing, when Justice Douglas noted: The “legal interest” test goes to the merits. The question of standing is different. It concerns, apart from the “case” or “controversy” test, the question whether the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question. [397 U.S. at 153, 90 S.Ct. at 830] Thus, by alleging competitive economic injury, plaintiff has adequately satisfied the requirement of “injury in fact”. Rental Housing Ass’n of Greater Lynn v. Hills, 548 F.2d 388, 390 (1st Cir. 1977). When intervenors cite the opinions in Alabama Power, Tennessee Electric, and Lukens Steel, relating to “legal interest”, they misanalyze the “injury in fact” requirement. The Supreme Court has itself several times noted the liberalizing effect upon the standing requirement that Data Processing wrought: Recent decisions by this Court have greatly expanded the types of “personal stake[s]” which are capable of conferring standing on a potential plaintiff. Compare Tennessee Electric Power Co. v. TVA, 306 U.S. 118 [59 S.Ct. 366, 83 L.Ed. 543] (1939), and Alabama Power Co. v. Ickes, 302 U.S. 464 [58 S.Ct. 300, 82 L.Ed. 374] (1938), with Barlow v. Collins, 397 U.S. 159 [90 S.Ct. 832, 25 L.Ed.2d 192] (1970), and Association of Data Processing Service Organizations v. Camp, 397 U.S. 150 [90 S.Ct. 827, 25 L.Ed.2d 184] (1970). [Linda R. S. v. Richard D., 410 U.S. 614, 616-617, 93 S.Ct. 1146, 1148, 35 L.Ed.2d 536 (1973)] See also United States v. Richardson, 418 U.S. 166, 193-194, 94 S.Ct. 2940, 41 L.Ed.2d 678 (1974) (Powell, J., concurring); Sierra Club v. Morton, 405 U.S. 727, 733, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972); Investment Co. Institute v. Camp, 401 U.S. 617, 620-621, 91 S.Ct. 1091, 28 L.Ed.2d 367 (1974); Arnold Tours v. Camp, 400 U.S. 45, 46, 91 S.Ct. 158, 27 L.Ed.2d 179 (1970); Hardin v. Kentucky Utilities Co., 390 U.S. 1, 6, 88 S.Ct. 651, 19 L.Ed.2d 787 (1968); Wells Fargo Armored Serv. v. Ga. Public Service Com’n., 547 F.2d 938, 940 n. 2 (5th Cir. 1977); In re Harwald Company, 497 F.2d 443, 444 (7th Cir. 1974); Evans v. Lynn, 537 F.2d 571, 610 (2d Cir. 1975) (Kauffman, J., dissenting); duPont v. Woodlawn Trustees, Inc., 64 F.R.D. 16, 21 n. 4 (D.Del.1974). B) ZONE OF INTEREST The second facet of intervenors’ standing argument is their contention that plaintiff, does not allege an injury which falls within the “zone of interests” arguably protected by the statutory framework under which the claims are brought. We believe that the “zone of interest” test as it relates to the environmental impact statement and economic impact statement issues deserves special treatment, and we shall address standing separately as we address those two issues. As to plaintiff’s coming within the “zone of interests” protected by the various agricultural acts, the commodities acts, the antitrust acts, and the Administrative Procedure Act, we conclude that plaintiff has met this requirement. Without going into detail, we simply conclude that plaintiff has interests which, although perhaps not primary, are nonetheless protected under these enactments. Without abandoning the “zone of interests” requirement, we refrain from applying it stringently in light of Professor Davis’ observation that in its latest eighteen majority opinions addressing the standing issue the Supreme Court has failed to mention this factor. K. Davis, Standing, 1976, 72 N.W.U.L.Rev. 69, 81 (1976); see also Carey v. Population Services International, 431 U.S. 678, 97 S.Ct. 2010, 52 L.Ed.2d 675 (1977). We do not think that intervenors’ argument as to plaintiff’s alleged lack of standing under these statutes overcomes the presumption of standing. Peoples v. United States Department of Agriculture, 138 U.S.App.D.C. 291, 427 F.2d 561, 563 (1970). Nor may we ignore plaintiff’s constitutional claims which may not be defeated by resort to the standing doctrine. Chicano Police Officer’s Ass’n. v. Stover, 526 F.2d 431, 436 (10th Cir. 1975), vacated on other grounds, 426 U.S. 944, 96 S.Ct. 3161, 49 L.Ed.2d 1181 (1976). As noted, we shall discuss standing again as a separate matter when we address the environmental impact statement and economic impact statement issues. As to the other issues presented, we find standing and shall proceed to the merits presented. 2. WERE THE CHALLENGED REGULATIONS ISSUED WITHOUT AUTHORITY OF LAW? One of the most serious contentions raised by plaintiff is the argument that the challenged regulations were issued without authority of law. Plaintiff’s argument, in capsulized form, runs like this: The Secretary’s decision is unlawful. Only a “producer” may receive price support assistance. A cooperative marketing association can not qualify. Accordingly, the Secretary’s decision exceeds his statutory authority and abuses the administrative discretion committed to him. [Suggestions in Support of Plaintiff’s Motion For a Preliminary Injunction, p. 25] Remembering that a regulation is presumed to be valid unless it is shown by those attacking it to be contrary to law [Forest v. Consumer Product Safety Com’n., 559 F.2d 774, 783 (D.C. Cir. 1977); State of Florida v. Mathews, 526 F.2d 319, 323 (5th Cir. 1976)], and that the construction given an act by the agency in charge of its administration should be given persuasive effect [Ballard E. Spencer Trust, Inc. v. Morton, 544 F.2d 1067, 1070 (10th Cir. 1976); Clarkson Const. Co. v. Occupation Safety and Health Review Comm’n., 531 F.2d 451, 457 (10th Cir. 1976); Alexander v. Richardson, 451 F.2d 1185, 1187 (10th Cir. 1971), cert. denied, 407 U.S. 911, 92 S.Ct. 2437, 32 L.Ed.2d 685 (1972)], we begin our analysis of plaintiff’s argument. Plaintiff’s argument has essentially three steps. First, plaintiff points out that the Secretary’s authority to provide price support loans springs, at least in part, from 7 U.S.C. § 1441, which states that under certain conditions, The Secretary of Agriculture . is authorized and directed to make available through loans, purchases, or other operations, price support to cooperators for any crop of any basic agricultural commodity . . . (emphasis added) Second, plaintiff notes that the term “cooperator” is defined in 7 U.S.C. § 1428(b) as a “producer on whose farm the acreage planted to the commodity does not exceed the farm acreage allotment . . ” (emphasis added) After noting that price support assistance is to go to “cooperators” who are defined as “producers”, plaintiff points finally to various definitions of the term producer, such as that contained in 7 C.F.R. § 719.2(s): Person who as owner, landlord, tenant or sharecropper, is entitled to share in the crops available for marketing from the farm or in the proceeds thereof. From these three observations, plaintiff concludes that because cooperatives are not landlords, tenants, owners, or sharecroppers, they cannot be given price support loans. Therefore, plaintiff argues that the Secretary has exceeded his congressionallyauthorized authority. Extension of price support loans to cooperatives, plaintiff further argues, violates the congressional intent involved with the passage of the agricultural acts. Plaintiff argues that the legislative history behind the passage of the Agricultural Act of 1948, P.L.No. 897, 62 Stat. 1247 (1948) clearly “reveals that farmers, nor cooperatives, were the objects of congressional concern.” [Suggestions in Support of Plaintiff’s Motion for a Preliminary Injunction, p. 30] The keystone of plaintiff’s argument is the contention that cooperatives are not “producers”. Numerous definitions from cases and regulations are tirelessly cited throughout plaintiff’s briefs on this issue. Unfortunately, plaintiffs main focus misses the thrust of the defendant’s position. Defendant and intervenors do not contend that cooperatives are “producers”. Rather, they argue that the challenged regulations contemplate not loans to cooperatives for their own benefit, but loans to the producer-members of cooperatives through the cooperatives. In regard to defendant’s theory, the nature of the general eligibility regulations [7 C.F.R. § 1425 Fed.Reg., 7/14/77)] is important in at least two respects. First, the regulations assure that cooperatives are closely controlled by and identified with their producer-members. We reject plaintiff’s argument that cooperatives are merely a form of corporate organization with no special relationship between the members and the cooperative. It should not be assumed that the members or stockholders of a cooperative, except in a technical legal sense, are separate and apart from the association. The members are the association, and the officers and directors of the association are, from a practical point of view, simply their agents for the conduct of the joint enterprise. The officers and directors are placed in office and continue there only through the action or acquiescence of the stockholders or members. In other words, the stockholders or members are essentially the principal or the “employer,” and the officers and directors are simply their “employees” or agents to direct the business; the agents are subject to the control of their employers. [U.S.D.A., Legal Phases of Cooperatives 12 (1976)] (emphasis added) The eligibility regulations aim to assure this close relationship between a cooperative and its members. 7 C.F.R. § 1425.4, 42 (Fed.Reg. 36235 (7/14/77) states: The cooperative shall be owned and controlled by its active producer members and any bona fide cooperative members The regulations specify that members of the cooperative must own over 50% of its stock. More than 50% of the members of a cooperative must be active producers [7 C.F.R. § 1425.4, 42 Fed.Reg. 36325 (7/14/77)], and to be approved for Form G loans a cooperative must follow regulations as to annual meetings, nominations, secret ballots, proxies, financial statements and other requirements aimed at assuring that the cooperative is actually controlled by its producer-members. 7 C.F.R. § 1425.5, 42 Fed.Reg. 36236 (7/14/77). If price support is sought for a given crop, 80% of the crop that is acquired by the co-op for marketing must be produced by members. 7 C.F.R. § 1425.11, 42 Fed.Reg. 36237 (7/14/77). Similar provisions govern the control of regional co-ops by their member cooperatives. A second important aspect of the eligibility regulations is the “pass-through” requirement which assures that the financial benefit of the price support loan accrues to the producer-members, and not to the cooperative as an entity. § 1425.14 of the recently amended regulations governs distribution: (a) Loan advances. If price support is obtained from CCC on any part of the commodity in a pool, the loan proceeds shall be distributed to members participating in such pool on the basis of the quantity and quality of the commodity delivered by each member less any authorized charges for services performed by and/or paid for by the cooperative which are necessary to condition the commodity or otherwise make the commodity eligible for loan. [42 Fed.Reg. 36238 (7/14/77)] (emphasis added) The evidence before the Court indicated that such pass-through would probably occur within 10 days after the producer delivered the commodity to the cooperative. (P.I. Tr. 199-200) Regulations are presently under consideration which would mandate that such pass-through occur within 15 days. 49 Fed.Reg. 54566 (10/7/77) The distinction between loans “to” cooperatives and loans “through” cooperatives obliterates the basis of plaintiff’s argument, yet plaintiff’s briefs do little other than label the distinction “sophistic.” We disagree. 7 U.S.C. § 1441(a) authorizes and directs the Secretary of Agriculture to “make available” price supports in various forms to cooperators. The statute contains no limitations on the methods the Secretary is to use in carrying out this mandate. The use of co-ops as fiscal conduits channeling the loan from the government to the producer is just one of the methods used by the Secretary. 7 U.S.C. § 1421 also contains a grant of authority to defendant: (a) The Secretary shall provide the price support authorized or required herein through the Commodity Credit Corporation and other means available to him. (b) Except as otherwise provided in this Act, the amounts, terms, and conditions of price support operations and the extent to which such operations are carried out, shall be determined or approved by the Secretary, (emphasis added) The Secretary has traditionally used co-ops as one of the “other means” for providing price support. The Secretary has utilized the C.C.C. for supervision of price support. Its powers are contained in 15 U.S.C. § 714b, and are very broad in nature. That statute provides that the C.C.C.: (d) May adopt, amend, and repeal bylaws, rules, and regulations governing the manner in which its business may be conducted and the powers vested in it may be exercised. (j) Shall determine the character of and the necessity for its obligations and expenditures and the manner in which they shall be incurred, allowed, and paid. (1) May make such loans and advances of its funds as are necessary in the conduct of its business. Another statute which must be considered is 15 U.S.C. § 714j, which states: The Corporation [C.C.C.] may, in the conduct of its business, utilize on a contract or fee basis, committees or associations of producers, producer-owned and producer-controlled cooperative associations, and trade facilities. Now we frankly admit that we wish for a statute which would more explicitly have provided for the action the Secretary has taken here. However, we must recognize the broad nature of the powers which the Secretary has, and the reason for those broad powers — that the legislature must leave administrative flexibility to allow an agency to meet new contingencies. In American Trucking Assns. v. United States, 344 U.S. 298, 309-310, 73 S.Ct. 307, 314, 97 L.Ed. 337 (1953), the Supreme Court wrote: Here, appellants have framed their position as a broadside attack on the Commission’s asserted power. All urge upon us the fact that nowhere in the Act is there an express delegation of power to control, regulate or affect leasing practices, and it is further insisted that in each separate provision of the Act granting regulatory authority there is no direct implication of such power. Our function, however, does not stop with a section-by-section search for the phrase “regulation of leasing practices” among the literal words of the statutory provisions. As a matter of principle, we might agree with appellants’ contentions if we thought it a reasonable canon of interpretation that the draftsmen of acts delegating agency powers, as a practical and realistic matter, can or do include specific consideration of every evil sought to be corrected. But no great acquaintance with practical affairs is required to know that such prescience, either in fact or in the minds of Congress, does not exist. National Broadcasting Co. v. United States, 319 U.S. 190, 219-220, 63 S.Ct. 997, 87 L.Ed. 1344; Phelps Dodge Corp. v. Labor Board, 313 U.S. 177, 193-194, 61 S.Ct. 845. Its very absence, moreover, is precisely one of the reasons why regulatory agencies such as the Commission are created, for it is the fond hope of their authors that they bring to their work the expert’s familiarity with industry conditions which members of the delegating legislatures cannot be expected to possess. United States v. Pennsylvania R. Co., 323 U.S. 612, 65. S.Ct. 471, 89 L.Ed. 499. See also Mourning v. Family Publications Service, Inc., 411 U.S. 356, 372, 93 S.Ct. 1652, 36 L.Ed.2d 318 (1973); State of Florida v. Mathews, supra, 526 F.2d at 324. The statutes granting authority to the Secretary of Agriculture and the C.C.C. in this realm are not unambiguous. They must be, and have been, broadly interpreted. The history of farm support programs over the past 45 years substantiates the breadth of authority which defendant claims in this action. We shall refrain from presenting a complete history of the C.C.C. as intervenors have ably done in a 61-page brief. Nonetheless, a brief summary of the C.C.C. and its farm support programs is in order. The C.C.C. was created in 1933 by President Roosevelt’s Executive Order No. 6340 under authority granted by the National Industrial Recovery Act. The original powers of the C.C.C. were virtually unlimited, as it was authorized to do “any and all things which may be necessary to accomplish the purposes” of numerous acts passed by Congress, including the Agricultural Adjustment Act of 1933, the National Industrial Recovery Act of 1933, the Federal Emergency Relief Act of 1933, the Reconstruction Finance Corporation Act of 1932, the Federal Farm Loan Act of 1916, and the Farm Credit Act of 1933. 79 Cong.Rec. 1552 (1935). Almost from the beginning the C.C.C. utilized cooperatives in the administration of various types of farm support programs. By 1948, the Secretary had extended support to 140 commodities, and was utilizing cooperatives to a significant extent. See 2 Fed.Reg. 2495 (1937) (cotton); 3 Fed.Reg. 123 (1938) (corn); 11 Fed. Reg. 9005 (1946) (peanuts); and 12 Fed.Reg. 157 (1947) (soybeans). A significant example of the use of cooperatives was in the support for tobacco. At 11 Fed.Reg. 12781 (1946), the regulations specified that field execution of tobacco support operations was to be “carried out by organizations (producer cooperatives wherever possible and private concerns if found to be necessary).” The cooperatives were to contract with the C.C.C. to provide various administrative services. The regulations noted “loans are to be made to contracting organizations which in turn make advances at such rate to growers.” The similarity to the challenged regulations is unmistakable. There was even an element of pooling, for the regulations further noted: Net gains accruing from the final marketing of the tobacco acquired by the contracting organizations will be distributed to the growers of the tobacco. In 1948, Congress passed the Commodity Credit Corporation Charter Act in order to comply with the Government Corporation Control Act of 1945, which required that all federal corporations receive a federal charter. The legislative history of that action can only be read as approving and continuing both the broad powers of the C.C.C. and the past methods utilized by the C.C.C. to carry out its powers. We have already referred to 15 U.S.C. § 714b, in which the broad powers of the C.C.C. were set out. The intent to grant broad powers clearly appears in a report of the Senate Committee on Agriculture and Forestry: The complexity of the demands on the Commodity Credit Corporation is apparent. Its obligations under the price-support programs cannot be readily ascertained. Emergency purchase programs cannot be foreseen at a given time during the year. It is the opinion of the subcommittee that flexibility of operation must be provided in order to carry out these responsibilities. [S'..Rep. No. 1022, 80th Cong., 2d Sess. 3 (1948), U.S.Code Cong.Serv. 1948, pp. 2138, 2140.] Limitations upon C.C.C. authority are set forth in 15 U.S.C. § 714c, but relate primarily to goals and purposes of the C.C.C., not the methods by which it carried out its mandate. The only limitation as to method is the admonition that the Corporation shall, to the maximum extent practicable consistent with the fulfillment of the Corporation’s purposes and the effective and efficient conduct of its business, utilize the usual and customary channels, facilities, and arrangements of trade and commerce. This appears to the Court to be merely an admonition to refrain from utilization of Government facilities when cooperative or independent grain dealers’ facilities are available. This issue shall be discussed again infra in relation to 15 U.S.C. § 713a-13. We have already noted above that in passing the C.C.C. Charter Act of 1948, the Congress sanctioned the utilization of cooperatives in 15 U.S.C. § 714j. In activity leading to passage of the bill, the House Banking and Currency Committee recognized the C.C.C. practice of utilizing cooperatives: The loans made by the Corporation for price-support purposes are non-resource loans to farmers or to cooperative associations and are secured by the pledge of agricultural commodities, (emphasis added) [H.Rep. No. 1790, 80th Cong., 2d Sess. 6 (1948)] We find no indication that the 1948 Charter Act was intended in any way to curtail the practices of the C.C.C. and Secretary of Agriculture up to that time of utilizing cooperatives as an aid to administration of farm programs. After passage of the C.C.C. Charter Act, the Agricultural Act of 1949 was enacted. This major agricultural legislation clearly was intended to continue the past practices of the C.C.C. A House Committee report concerned with what is now 7 U.S.C. § 1421(a) noted: This subsection contains a general authorization to the Secretary to carry out price support operations for agricultural commodities through the Commodity Credit Corporation and other means available to him, by means of loans, purchases, and other operations. This provision is similar to that in present legislation and authorizes support programs similar to those conducted in the past. . (emphasis added) [H.Rep. No. 998, 81st Cong., 1st Sess. 22 (1949)]. Since the major actions of 1948 and 1949, the Secretaries of Agriculture and the C.C.C. have continued to utilize cooperatives in various roles in the administration of commodity support programs. Utilization of cooperatives in a wide range of capacities in the farm support programs is a well established practice. The pooling concept has also been utilized frequently by the C.C.C. (See regulations cited in Table I, attachment to Doc. # 107.) Plaintiff attempts to distinguish all past uses of cooperatives by asserting that former programs never involved loans to cooperatives. However, an examination of various regulations clearly indicates that past programs have involved exactly what is proposed here — loans to cooperatives which then passed the funds through to producers. For example, 1948 regulations concerning rice, 6 C.F.R. § 655.20 (1949) stated that cooperatives would be eligible for loans if (a) the grower members were bound by contract to market through the association [compare with 7 C.F.R. § 1425.9]; (b) the major part of the rice marketed by the association was produced by members who were eligible producers [compare with 80% requirement at 7 C.F.R. § 1425.11]; (c) the members shared proportionately in the proceeds from marketings [compare with 7 C.F.R. § 1425.14(b)]; (d) the rice purchased from non-members was segregated sufficiently to assure that the rice placed under loan accurately reflected the quantity and quality of rice grown by members [compare with 7 C.F.R. § 1425.13]; and (e) the co-op had the legal right to pledge the rice as security for the loan [compare with 7 C.F.R. § 1425.12], See also 13 Fed.Reg. 4996 (1948) (dry peas); 13 Fed.Reg. 5256 (1948) (dry edible beans); 14 Fed.Reg. 7193 (1949) (cotton); 6 C.F.R. § 434.1202e (1962) (honey). Plaintiff attempts to distinguish all prior loan programs with seven arguments. First, plaintiff argues that the extension by the Secretary of loans to cooperatives for cotton, naval stores, rice, dry edible beans, soybeans, and honey occurred without any announcement of proposed rule-making or opportunity for public comment. This is, of course, true because the extensions occurred before there were any procedural requirements such as are presently applicable through the Administrative Procedure Act. However, we fail to see that this has any bearing whatsoever upon the authority of the Secretary to promulgate such substantive regulations. Second, plaintiff argues that the regulations with respect to particular commodities are internally inconsistent. We understand plaintiffs argument to be that prior regulations, such as were recited above, extended loans to cooperatives under the conditions listed, while defining “producers” as farmers. That is, it appears that prior regulations used the same definitions of “producer” as are present in today’s regulations. Yet, those regulations also allowed loans to cooperatives apparently under the same theories that defendant advances today. In short, plaintiff contends that because its argument on the definition of “producers” and the distinction between loans to and loans through cooperatives has been continually rejected in practice, the prior regulations were inconsistent. We disagree. Rather, this indicates that the history of farm support programs rejects plaintiff’s argument that loans to co-ops are illegal because co-ops are not “producers.” Third, plaintiff argues that the administrative history of the regulations reveals substantial differences between them and the recently promulgated regulations for wheat and feed grains. This is certainly true as to some of the regulations, for, as we have noted, throughout the years cooperatives have been utilized by the C.C.C. in a number of different capacities. However, the challenged regulations are indistinguishable in any major detail from many of the past programs (already referred to supra). Fourth, plaintiff argues that pertinent provisions of past programs, including definitions in the regulations, are inconsistent with the position now asserted by the Secretary. By this contention, plaintiff returns to its argument based upon the definition of “producers”. Since the argument in support of the Secretary’s authority does not depend upon a definition of cooperatives as “producers”, this distinction is irrelevant. Fifth, plaintiff argues that the administrative history of the regulations demonstrates alternatives less anticompetitive than the recently promulgated regulations. While this may be an argument relevant to the issue of whether the decision to use this particular alternative was arbitrary and capricious, it is no argument against the Secretary’s authority to follow this course of action. Sixth, plaintiff points out that under the new regulations title to the grain, when it is placed in the pool, goes over to the cooperative and the farmer-producer retains only a beneficial interest in the grain. While plaintiff argues that this has not been the case during previous regulations, it appears to us that this assertion is inaccurate in light of the significant pooling activity encouraged by the C.C.C.’s past practices discussed above. Further, the beneficial interest retained by the farmer is clearly sufficient to entitle him to receive the benefit of the farm loan through his cooperative. A case cited by plaintiff, United States v. Cooperative Grain and Supply Co., 476 F.2d 47, 52 (8th Cir. 1973), clearly stands for the proposition that a “beneficial” interest is sufficient to entitle one to the benefits of a farm support loan. Seventh, plaintiff argues that prior utilization of cooperatives in this capacity has been insubstantial in light of the size of the commodities involved. Plaintiff argues that wheat and feed grains are major crops — so much bigger than other commodities that the experience in other commodities is not even relevant. We first reject the legal argument that utilization of loans through cooperatives for other commodities cannot be precedent for utilization of loans through cooperatives for wheat and feed grains. Even if there were a difference in the size of the crops, the principle would be the same. Second, as a factual matter, plaintiff’s attempt to characterize rice, cotton, and soybeans, among others, as “minor” crops fails. The annual soybean crop in the United States has a larger market value than the annual wheat crop. (Tr. 144) Thus, all seven of plaintiff’s attempts to distinguish past programs fail. It is our conclusion that the history of administrative practice strongly supports the action which the Secretary has attempted to take in this case. We face a long-standing and consistent administrative interpretation by the relevant agency which is entitled to strong judicial deference. N.L.R.B. v. Bell Aerospace Co., 416 U.S. 267, 274-275, 94 S.Ct. 1757, 40 L.Ed.2d 134 (1974); Red Lion Broadcasting Co. v. F.C.C., 395 U.S. 367, 381-382, 89 S.Ct. 1794, 23 L.Ed.2d 371 (1968); Udall v. Tallman, 380 U.S. 1, 16-17, 85 S.Ct. 792, 13 L.Ed.2d 616 (1964); Universal Battery Co. v. United States, 281 U.S. 580, 583, 50 S.Ct. 422, 74 L.Ed. 1051 (1930); Committee for Open Media v. F.C.C., 174 U.S.App.D.C. 333, 533 F.2d 1, 3-4 (1976). The Supreme Court in United States v. Midwest Oil Co., 236 U.S. 459, 472-473, 35 S.Ct. 309, 313, 59 L.Ed. 673 (1914), a case involving a challenge to the Executive’s practice of withdrawing public lands from private acquisition without special authorization of Congress after Congress had opened the lands up to occupation, noted the following: It may be argued that while these facts and rulings prove a usage, they do not establish its validity. But government is a practical affair, intended for practical men. Both officers, law-makers and citizens naturally adjust themselves to any long-continued action of the Executive Department, on the presumption that unauthorized acts would not have been allowed to be so often repeated as to crystallize into a regular practice. That presumption is not reasoning in a circle, but the basis of a wise and quieting rule that, in determining the meaning of a statute or the existence of a power, weight shall be given to the usage itself, — even when the validity of the practice is the subject of investigation. The history of farm support programs indicates that Congress has long been aware of the C.C.C.’s practice of using cooperatives in a wide range of supporting activities. Every piece of legislation dealing with the C.C.C. since it was set up by Executive Order in 1933 has been passed after the C.C.C. began utilizing cooperatives as an administrative tool. Despite these numerous opportunities, Congress has never rejected the practice of utilizing cooperatives, but has, in fact, acted to extend past practices (which included utilization of coops) and has continually appropriated the funds to make such programs possible. Thus, tacit congressional approval is strongly indicated. Lykes v. United States, 343 U.S. 118, 127, 72 S.Ct. 585, 96 L.Ed. 791 (1952); United States v. Jackson, 280 U.S. 183, 196-197, 50 S.Ct. 143, 74 L.Ed. 361 (1930); National Lead Co. v. United States, 252 U.S. 140, 146-147, 40 S.Ct. 237, 64 L.Ed. 496 (1920). In United States v. Jackson, supra, the Supreme Court, after noting the rule that great weight is properly accorded to the construction consistently given to a statute by the Executive Department charged with its administration, stated: If there were any doubt on the question, the silence of Congress in the face of the long continued practice of the Department of the Interior in construing statutes [in a particular manner] must be considered as “equivalent to consent to continue the practice until the power was revoked by some subsequent action by Congress.” United States v. Midwest Oil Co., 236 U.S. 459, 481, 35 S.Ct. 309, 59 L.Ed. 673. [280 U.S. at 196-197, 50 S.Ct. at 147] In this case we may note, as the court did in Rath Packing Co. v. Becker, 530 F.2d 1295, 1312 (9th Cir. 1975), aff’d 430 U.S. 519, 97 S.Ct. 1305, 51 L.Ed.2d 604 (1977): Forty-two years of Congressional silence is strong evidence that Congress has acquiesced in the Secretary’s interpretation of his powers. See Flood v. Kuhn, 407 U.S. 258, 283, 92 S.Ct. 2099, 32 L.Ed.2d 728 (1972); Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 381, 89 S.Ct. 1794, 23 L.Ed.2d 371 (1969). Finally, we return to plaintiff’s argument that the challenged regulations violate the purpose of the various agricultural acts which is to aid the farmer and insure an adequate farm income. We reject this argument, for it appears to us that the purpose of the regulations is, primarily if not solely, to benefit the farmer. The pass-through provision of the regulations allows the farmer who presently cannot obtain the price support loan if he places his grain in a cooperative’s “pooling” arrangement, to obtain such a loan. In addition, the new regulations promote “pooling” which, it is hoped, will allow farmers to band together in cooperative marketing associations to become a real power in the exporting of grain with the ultimate purpose of increasing the proceeds from the sale of grain. See 15 U.S.C. § 714c(f). Thus, the farmer clearly is aided by these regulations and nothing contained therein is inconsistent with the purpose of the various agricultural acts. Thus, we think it clear that both the statutory language and the appropriate legislative and administrative history give the defendant broad discretion in the administration of price support loans. The Secretary has the authority, which he has traditionally exercised, to work through cooperatives in the administration of these loans. The present regulations are merely an extension of past practices. They are consistent with the purposes of the various farm bills, for the cooperatives act only as a fiscal conduit for the loans. The cooperatives hold the wheat, but the farmers retain the beneficial interest therein, and are thus able to enjoy the benefits of the price support loan. Thus, the challenged regulations allow the farmer to obtain the benefits of the price support loan while adding another marketing mechanism — utilization of a cooperative pool — to his small arsenal. We do not think the Secretary can be faulted for either his goal or his method of achieving that goal; the authority for this practice is clearly sufficient. 3. WAS PROMULGATION OF THE REGULATIONS “ARBITRARY AND CAPRICIOUS”? Plaintiff requests that we “hold unlawful and set aside [this] agency action” on the grounds that it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”. 5 U.S.C. § 706(2)(A). Before we examine the specifics of the Secretary’s actions to determine whether they are “arbitrary and capricious”, we should discuss the legal standard by which the actions must be judged and the record upon which our judgment in that regard must be based. In promulgating the challenged regulations, defendant followed the informal rule-making procedure explicated in 5 U.S.C. § 553. Plaintiff does not deny that the procedure set forth in 5 U.S.C. § 553 is the proper procedure for the rule-making that occurred in this instance. The parties agree that the standard by which a Court may review informal rule-making is the “arbitrary and capricious” standard of 5 U.S.C. § 706(2)(A). Camp v. Pitts, 411 U.S. 138, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973); Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971); American Medical Ass’n v. Mathews, 429 F.Supp. 1179, 1204 (N.D.Ill.1977). Complete review of informal rule-making requires a Court to examine three questions. First, the Court must consider whether the action was within the scope of the agency’s authority. (This has already been considered.) Second, the Court must consider whether the proper procedural requisites were met. Third, the Court must decide whether the action taken by the agency was “arbitrary and capricious”. Citizens to Preserve Overton Park v. Volpe, supra, 401 U.S. at 415-417, 91 S.Ct. 814. Turning to the issue of whether defendant followed the proper procedural requisites in promulgating the challenged regulations, it appears that defendant followed the prescribed steps for informal rule-making set forth in 5 U.S.C. § 553(b). On April 12, 1977, the defendant published in the Federal Register a notice of proposed rule-making. The comment period began on that day and ran until May 27, 1977. Following evaluation of the comments, it was announced that the Department would proceed toward final publication of the rule. On August 9, 1977, the regulation was published in final form in the Federal Register. Plaintiff’s arguments as to procedure are essentially two in number: (1) the defendant did not follow the procedures set forth in the National Environmental Policy Act (N.E.P.A.), and (2) the defendant did not submit the regulations for formal approval by either the C.C.C. Advisory Board, or the C.C.C. Board of Directors. The Court does believe that defendant adequately evaluated the comments before him which pertained to environmental issues, and properly rejected them. However, because we have some reservations about whether proper N.E.P.A. procedure was followed in this case, we have examined this issue in detail in a later section of this opinion. No further discussion need occur here. Defendant candidly admits that the regulations were not submitted for the formal approval of the C.C.C. Advisory Board. The reason for non-submission is that no C.C.C. Advisory Board was in existence at the time the regulations were promulgated. Created in 1949 by 15 U.S.C. § 714g(b), the Advisory Board has been eliminated pursuant to the Federal Advisory Committee Act of 1972, § 14, which provided: (a)(1) Each advisory committee which is in existence on the effective date of this Act shall terminate not later than the expiration of the two-year period following such effective date unless— (B) in the case of an advisory committee established by an Act of Congress, its duration is otherwise provided for by law. [5 U.S.C.App. I] In the Federal Advisory Committee Act of 1972, Congress evinced a clear intent to eliminate and prevent the formation of unnecessary advisory committees. Sec. 2(b)(2). The Secretary of Agriculture presently has under advisement the decision as to whether the C.C.C. Advisory Board should be re-established. That is a discretionary decision unreviewable here. The plaintiffs challenge in this regard is, therefore, meritless, especially in light of the fact that the Advisory Board’s capacity has always been purely advisory and not in any sense binding upon the Secretary. A C.C.C. Board of Directors does exist. While the regulations were not formally submitted to the C.C.C. Board of Directors for its approval, four of the members of the Board took part in the decision to promulgate the regulations. Such formal approval was not required of the Secretary, who has the authority to set the terms and conditions for price supports pursuant to 7 U.S.C. §§ 1421, 1441, and 1429. Both the C.C.C. and its Board of Directors are “subject to the general supervision and direction of the Secretary”, 15 U.S.C. §§ 714, 714g(a). The legislative history of the 1949 amendment to the C.C.C.'Charter Act which placed the C.C.C. and its Board under the direction of the Secretary of Agriculture clearly indicates that while the C.C.C. was to be the operational arm of the Secretary, the Secretary was to make the decision as to the manner in which farm supports were to be extended. [95 Cong.Rec. 4927-4928, 4936 (1949). There seems little doubt that the Secretary had full authority to issue the challenged regulations without the formal approval of the C.C.C. Advisory Board or the C.C.C. Board of Directors. To some extent plaintiff admits that formal approval of these two entities was not procedurally required, but argues the failure to obtain that approval demonstrates arbitrary and capricious conduct. In light of the extensive consultation with other officials of the U.S.D.A. and the C.C.C. made before the promulgation of these regulations, we find this argument invalid. (Bergland Depo., p. 10, Tr. 762) We therefore turn to the third facet of judicial review of informal rule-making — a determination of whether the action was “arbitrary and capricious”. Two factors enter into this determination: (a) whether the decision was based on a consideration of the relevant factors, and (b) whether there has been a clear error of judgment. Citizens to Preserve Overton Park v. Volpe, supra, 401 U.S. at 416, 91 S.Ct. 814; Sabin v. Butz, 515 F.2d 1061, 1067 (10th Cir. 1975). The Court’s inquiry in this regard is to be “searching”. Citizens to Preserve Overton Park v. Volpe, supra, 401 U.S. at 416, 91 S.Ct. 814; Miller v. United States, 438 F.Supp. 514, 522-523, n. 4 (E.D.Pa.1977). That is, the Court must make a “substantial inquiry” into the “reasonableness” of the agency’s action. Ethyl Corp. v. Environmental Protection Agency, 176 U.S.App. D. C. 373, 541 F.2d 1, 35, cert. denied, 426 U.S. 941, 96 S.Ct. 2660, 49 L.Ed.2d 394 (1976); American Petroleum Institute v. E.P.A., 540 F.2d 1023, 1028 (10th Cir. 1976), cert. denied, 430 U.S. 953, 97 S.Ct. 1597, 51 L.Ed.2d 802 (1977); Hill v. Morton, 525 F.2d 327, 328 (10th Cir. 1975). On the other hand, the Court must remember that the burden of proving that an agency action is arbitrary and caprici