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

CHAPTER 3. SHERMAN TO CAPPER-
VOLSTEAD, 1890-1922
The time between enactment of the Sherman Act and the Capper-
Volstead Act was one of great activity and change. The progressive
movement grew in importance with the rise of public resentment
toward large, abusive businesses. Farmer marketing cooperatives
became important participants on several lines of business. States
adopted their own antitrust laws and the first laws specifically
authorizing the formation of producer cooperatives. And the Federal
Government enacted additional legislation reining in the power of big
business and recognizing the special needs of producer associations
within the context of antitrust law.
COOPERATIVE GROWTH
Some persons who have attacked the special antitrust status of
farmer cooperatives under the Capper-Volstead Act, particularly
cooperatives with significant market power, have maintained that
"when the act was passed in 1922, cooperatives were small and had
limited market power, so Congress did not foresee the need to provide
in the act explicit limitations on the size of cooperatives. " 155
Reynolds points out that it was true that most cooperatives were
small, local organizations when the Sherman Act was passed in 1890.
However, beginning about 1895, larger centralized cooperatives and
federated regional associations began to emerge. By the time Congress
was considering legislation that became the Capper-Volstead Act,
cooperatives were a major national presence in several segments of the
food industry. For example:
! From 1913 through 1921, the share of California citrus shipped
by the California Fruit Growers Exchange (Sunkist) grew fairly
steadily from 61.5 percent to 72.5 percent.
155 Bruce Reynolds, Many Early Co-ops Had Clout, 46 Farmer
Cooperatives, Jan.-Feb. 1980, at 21.
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