Co-ops not focus of anti-trust probe

Jerry Hagstrom

WASHINGTON (DTN) – The Obama administration’s initiative to examine antitrust issues in agriculture will not focus on the Capper-Volstead Act, Agriculture Secretary Tom Vilsack said last Wednesday.

The 1922 law allows farmers to organize in cooperatives without violating antitrust laws. Vilsack made his comments before the National Council of Farmer Cooperatives, saying concern about the act had been “unfortunately generated” by statements by other administration officials.

Earlier this year, USDA and the Justice Department began a series of workshops to address small-farm group concerns that mergers of farm suppliers and commodity buyers have reduced competition at both ends of the food supply chain, resulting in higher input costs and lower sale prices. USDA and Justice have scheduled a workshop in Madison, WI, on June 25 to examine concentration in dairy, an industry in which co-ops are big players.

Farm leaders who consider co-ops vital in marketing their products and dealing with larger agribusinesses had expressed concern because the Capper-Volstead Act gives the agriculture secretary the power to regulate co-ops to prevent them from achieving and maintaining monopolies and, if necessary, hold hearings, determine facts, and issue orders ultimately subject to review by federal district courts

Although the Obama administration’s concern about agribusiness concentration seems to be focused mostly on the relationship between farmers and corporations, some dairy farmers have questioned whether big dairy cooperatives have been paying them a fair price for milk.

As lobbyist Randy Russell noted in a presentation to the farm co-op leaders Wednesday, Assistant Attorney General for Antitrust Christine Varney, who has been participating in the workshops, agreed in an exchange with Senate Judiciary Chairman Leahy last year that if Congress were to determine co-ops had violated the intent of the Capper-Volstead Act, Congress can change that law. But Russell also noted that, at a June 9 Senate Agriculture Antitrust Subcommittee hearing, Varney had agreed with Sen. Russell Feingold, D-WI, that co-ops can have “a positive, balancing effect on agriculture.”

Vilsack told the farm co-op leaders, who were headed for a day of lobbying on Capitol Hill, that he wishes Congress would take “quicker action” on the tax extenders bill so that the biodiesel tax credit would go back into effect.

Vilsack also said the administration is determined to break down barriers to exports of U.S. agricultural products and singled out Cuba as a county in which the barriers should be reduced.

Asked after the event if the administration would support a bill sponsored by House Agriculture Chairman Collin Peterson and Rep. Jerry Moran, R-KS, and others to end the ban on American travel to Cuba and to ease agricultural exports, Vilsack said he would not comment on specific legislation. Vilsack also declined to comment on a letter sent by Cuban dissidents endorsing the Peterson-Moran bill, but noted that President Obama has made overtures to Cuba “and we hope they are reciprocated.”

Many of the farm co-op leaders, particularly in the fruit and vegetable and dairy industries, support immigration reform, and Vilsack told them they cannot expect members of Congress to bring up the issue in an election year unless they have a more compelling argument.

Vilsack said there is “stagnation” on immigration reform and suggested they tell members of Congress that if farm workers are deported, domestic food prices will increase, or if more food needed to be imported, there would be additional concerns about food safety. Vilsack said the co-op leaders should ask members of Congress, “If you like getting a barrel of oil from Hugo Chavez, how would you like getting a bushel of avocados from him?”