Why Are They Attacking Capper Volstead?
Phil Kenkel
Bill Fitzwater Cooperative Chair
Last fall cooperativeswere in the news as health insurance cooperatives were proposed as a component of health care reform. Most news analysts seemed to be vaguely in favor of the cooperative concept but concluded that health insurance cooperatives would be too small to provide any meaningful competition with huge health insurance corporations. In light of that recent debate it is somewhat ironic that the Capper Volstead Act is under attack from the Department of Justice and the Obama administration. A common theme in the“re-examining Capper Volstead” argument is that cooperatives have grown beyond what was imagined when the Act was established.
Despite the fact that most cooperatives are much smaller than their suppliers or buyers, the “bigger is bad” theme is currently popular. Big banks are often viewed as triggering the financial crisis. Attacking large firms and proposing anti-trust action is always politically popular. Cooperative’s, like other firms, seek efficient structures which often involve growth or the formation of alliances. Unfortunately, the efficiency gains are somewhat invisible to members and the general public while any reduction in firms appears to be a loss of competition. Dairy cooperatives in the Northeast have been very effective in merging milk hauling operations and reducingmilk hauling costs. Unfortunately, some farmers (who ultimately pay the freight)bemoan the loss of multiple milk trucks and perceive a less competitive price.
The general public’s view on cooperatives and agriculture in general seems to be stuck in the 1930’s. The average American would support a group of small farmers but is suspicious of any organization described as an agribusiness. Regardless of the perceptions behind the attack on Capper Volstead the threat is real. Without Capper Volstead, farmer co-ops could not exist, and any two farmers coming together to talk about improved marketing would face harsh civil and criminal antitrust penalties. While NCFC and regional cooperatives can play a role, the most effective response is likely to come from grass-roots input.Local cooperatives need to share their stories on how they benefit farmer owners and their rural communities. Examples of the disparity between cooperatives and their suppliers and/or buyers and examples of scale efficiencies are likely to be particularly effective. The first of the Department of Justice workshops is scheduled for March 12 in Ankeny Iowa. It is described to consider “issues facing crop farmers including seed technology, vertical integration, market transparency and buyer power”. Cooperatives are in the best interest of farmers and consumers. We need to share that story with our elected officials and the public.
2-10-2010