Re-cap of Capper-Volstead

Appreciatig the Laws that Foster Growing Cooperatives

Published in the September 2011 Issue Published online: Sep 18, 2011 Randon W. Wilson, legal counsel to the UPGA
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Next time you eat an orange, a potato or a grape, think of grower cooperatives. For over 100 years, cooperatives have been the valued partner of growers in every corner of the country as a cornerstone of the rural economy and providing American consumers with a wide range of nutritious products. I have dedicated my 40-year career to providing legal counsel to grower cooperatives and assisting them and their grower members to understand and live by the laws that allow growers to form cooperatives and share marketing information including supply and demand data.

Before Congress enacted laws that allowed grower cooperatives immunity from antitrust laws, growers were at a disadvantage and often could not compete against large-scale corporations. The small family farm was being threatened financially by the market power of brokers, handlers and purchasers. Recognizing the importance of sustaining the people who grow our food supply, Congress rectified this situation by the passage of the Capper-Volstead Act of 1922, which was signed into law by President Warren G. Harding. This is a well-established law that has fostered the use of grower cooperatives throughout the country. Through the act, cooperative members can agree on prices and other terms without the risk of prosecution.

There are now over 3,000 grower cooperatives in the United States organized under the provision of the act. The act allows grower members to share market data and information.

Without the Capper-Volstead Act, growers would receive less money for their crops and consumers would ultimately pay more for the food they buy.

A companion statute to the Capper-Volstead act is the Cooperative Marketing Act of 1926, which established a federal data gathering and technical support organization for grower cooperatives and fosters stronger cooperatives in many data and marketing areas.

Through these two acts, growers, through their cooperatives, can obtain data on supply and demand that they would not be able to obtain alone. This enables them to produce what is needed for the market rather than to produce a surplus, which drives prices down, often below the cost of production. These acts enable them to vertically integrate so as to obtain income not only from farming but from processing or packing and from marketing. Members can obtain data and use it to market their own products or they can market their products through their cooperatives or through agencies in common that they organize or select.

Some of the most prominent food companies in America are agricultural cooperatives operating under these federal statutes and are preserving family farms and supplying us all with high-quality food at fair prices. Some examples are Sunkist (oranges), Ocean Spray (cranberries), Dairy Growers of America (milk), United Egg Producers (eggs), National Grape Cooperative (Welch's grape products), Michigan Sugar Company (sugar), Amalgamated Sugar Company (sugar), United Potato Growers of America (potatoes), Sun-Maid Growers (raisins), Blue Diamond Growers (almonds) and Tree Top, Inc. (apples).

To learn more about the Capper-Volstead Act, read the USDA's brochure found at www.rurdev.usda.gov/rbs/pub/cir35.pdf

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