Justice Scrutinizing Capper-Volstead Act
Farmer cooperatives anti-trust exemption being reviewed.
Compiled by staff
Published: Nov 23, 2009
The Justice Department is reviewing the longstanding anti-trust exemption for farmer cooperatives. The "Capper-Volstead" anti-trust exemption has been around since 1922 allowing farmers to buy fuel and fertilizer more cheaply and market grain at a higher price through elevators. But some, including President Obama's top anti-trust official, now question the continued need for the exemption as co-ops have gotten bigger and include more agribusiness.
Former USDA Deputy Ag Secretary Chuck Conner, now National Council of Farmer Cooperatives president, says Assistant Attorney General Christine Varney spoke about the issue at a Senate Judiciary field hearing in Vermont.
"The assistant attorney general was quoted as saying that Congress might conclude that the Capper-Volstead might not be the right law for the state of the industry at this time," Conner said. "She was also quoted in that same hearing that co-ops may have grown beyond what was imagined when the statute was inacted."
Conner says this is something his group takes very strong exception to, arguing that farmers are still in control of their co-ops. But he says Varney has started the ball rolling. Ultimately it's up to Congress to change the law, but he says other farm groups he met with last week are in a state of shock.
"The reaction is one of a little bit of disbelief," Conner said. "The thought that somehow farmers having the ability to collectively come together to do things that they can't do as an individual just seems like motherhood and apple pie, and so to challenge that in someway, I think a lot of them are suspicious."
A USDA-University of Wisconsin study shows more than 29,000 U.S. cooperatives generate more than $654 million in revenues and employ more than two million workers.
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