—Lancaster Farming, Saturday, Fabruary 10,1979
126
* - r y? ~ ~
Anti-trust proposal may weaken family farms
WASHINGTON, D.C. - A crippling of the family farm
system and an ultimate ]uinp in food prices would result if
recommendations presented to the President last week by
a national antitrust review commission are adopted. -
So says Kenneth D. Naden, president of the National
Council of Farmer Cooperatives.
“The antitrust commission has dealt the family farm
system a low blow by attacking cooperatives, the
farmer’s main alternative to weak bargaining power,”
said Naden.
He added that the newly-released recommendation of
the National Commission for the Review of Antitrust
Laws and Procedures amount to “lawyers trying to tell
farmers howto market their products.”
“We have the most productive agricultural system in
theworld,” said Naden, “but instead of leaving success
alone, Hie Justice Department is threatening it by
weakening farmers’ ability to meet buyers with some
degree of market power.”
The antitrust review commission proposes that all
cooperative mergers and marketing federation activities
be subject to review and approval by the Justice Depart
ment and Federal Trade Commission. It also poses the
threat that responsibility for watchdogging the marketing
practices of farmer cooperatives could be shifted from
USDA to an agency such as Justice or the Federal Trade
Commission.
Naden accused the Justice Department of railroading
its recommendations through the review commission. “It
was loaded against agriculture from the start,” he said.
“The support staff was from the Justice Department,
commission members weren’t familiar with agricultural
production or marketing, and most of the witnesses called
to testify before the commision were from Justice. It
would seem we are witnessing a blatant power play that is
more self-serving to the Justice Department than to the
welfare of the nation.”
At the center of the dispute is the Capper-Volstead Act
of 1922, which exempts family fanners from antitrust law
provisions when forming a cooperative to market their
products. Although the intent of the antitrust laws was to
break monopolistic practices of railroads, steel com-
and other large basic industries, it soon became
evident that the language technically applied to small
farmers as well. As a result, farmers were left defenseless
- unable to bargain jointly for fair prices for their pro
ducts.
Recognizing the dilemma. Congress passed the Capper-
Volstead Act to specifically permit farmers to form
cooperative associations _and thereby achieve some
strength in marketing’their products. Once a cooperative
is formed, however, it is subject to the same antitrust laws
as any other business.
Chester County DHIA
(Continued from Page 124)
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*The antitrust
commission has
dealt the family
farm system a low
blow by attacking
cooperatives ••••
Because of the unique economics of farm marketing and
production, the Capper-Volstead Act placed responsibility
for watchdog jurisdiction over fanner cooperatives with
the Department of Agriculture rather than with the
Department of Justice which handles most other antitrust
matters.
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m
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“The Capper-Volstead Act correctly maintained that
1 the interests of the family fanner are different from that
of big business,'” said Naden. “But now, the Justice
Department wants tolreat the family farmer as though he
were an industrial conglomerate.”
For its part, the Justice Department maintains that
cooperatives and 'federations of cooperatives have
become too large and powerful, sfad now exert a
.potentiafly-disruptive influence in the marketplace.
Justice implies that cooperatives are lessening competi
tion.
Farmer cooperatives say this isn’t true./They point out
that the five largest non-cooperative food companies had
combined sales of $25 billion in 1977, more than three
times the $8 billion of the five largest cooperatives.
Great as this difference 's, farmer cooperatives say they
still have the vehicle with the finandaV ability and
marketing strength to challenge the" giants. Without the
competition'posed by the cooperatives, they argue, the
food giants would be free to adopt whatever food pricing
policies the market will bear.
Naden claims that if jurisdiction of farmer cooperatives
is moved from USDA officials, who are experts in food
production and marketing, to Justice Department
lawyers, who are experts in regulation, the resulting
„ economic impact will be substantial for both farmers and
consumers.
“Everyone knows that the cost of regulation and added
(Turn to Page 137)
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