Antitrust Status of Farmer Cooperatives: - USDA Rural Development ...

ANTITRUST STATUS OF
FARMER COOPERATIVES:
The Story of the Capper-Volstead Act
This report is essentially the story of the Capper-Volstead Act. 1
Enacted in 1922, Capper-Volstead authorizes agricultural producers to
act together in associations that process, prepare for market, handle,
and market the agricultural products they produce. Without this
protection, farmers, who agree on the price they will accept for their
production and other terms of trade, would risk challenge and
prosecution for restraining trade and attempted monopolization under
our antitrust laws. Cooperative scholars consider Capper-Volstead so
crucial to the development of effective producer owned and controlled
marketing firms that it "is frequently referred to as the 'Magna Carta'
of farmers' cooperatives." 2
Capper-Volstead is somewhat unique for a major Federal law; it
has remained as written for 80 years. In fact, there has been no
serious attempt to amend it. While Capper-Volstead has been on the
books for many years, it is a living statute subject to continuous
application and interpr etation by cooper ative leaders and advisers,
competitors and their counsel, antitrust enforcement officials, and
judges asked to resolve conflicts about its meaning.
This paper begins with a detailed account of the historical
background that led to enactment of landmark antitrust legislation,
notably sections 1 and 2 of the Sherman Act. 3 Next it focuses on
judicial application the Sherman Act and other factors that led to
enactment of Capper-Volstead. Then, it turns to various decisions
interpreting the scope of the exemption and the extent of joint conduct
by agricultural producers that it sanctions.
1 42 Stat. 388 (1922), 7 U .S. C. §§ 291-292.
2 Ewell P. Roy, Cooperatives: Today and Tomorrow (Danville, IL:
Interstate Printers & Publishers, 1964) 215-216.
3 26 Stat. 209 (1890), 15 U .S. C. §§ 1-2.