National Council of Farmer Cooperatives
Representing the Business Interests of Agriculture

Washington, DC – The recommendations made by the Antitrust Modernization Commission in its final report released today would destroy the ability of farmers to form cooperatively-owned businesses, leaving America's agricultural producers in a severely weakened position in the marketplace, the National Council of Farmer Cooperatives said today.

"Farmer cooperatives offer the best opportunity for America to realize the farmer-focused ideal of an enduring, competitive agricultural industry," said NCFC President Jean-Mari Peltier. "Instead of recognizing the positive impact that cooperatives have had on rural America, the Commission recommends gutting the ability of farmers and ranchers to form effective co-ops and instead leave them at the mercy of giant multinational corporations. If enacted, it would represent a step backwards for American agriculture," said NCFC President Jean- Mari Peltier.

Farmer cooperatives are agribusinesses owned and controlled by individual farmers and ranchers. The majority of America's 2 million farmers belong to one or more cooperatives, and the profits from the business are returned to farmer-members thereby enhancing their income.

Farmer-owned cooperatives enjoy limited antitrust immunity for marketing agricultural products under their founding Capper-Volstead Act, often termed the "Magna Carta of farmer cooperatives." This limited immunity is necessary to allow two or more farmers to simply talk about price or terms of sale. The AMC recommended to Congress that it sunset all immunities and exemptions, including Capper- Volstead.

The Commission's recommendations would apply to other statutory antitrust immunities utilized by farmer cooperatives, including the Agricultural Marketing Agreement Act, the Webb-Pomerene Act, the Export Trading Company Act, and others.

"The Capper-Volstead Act was originally enacted to give America's farmers and ranchers the ability to take their economic fate into their own hands and combat potential abuse and exploitation when marketing their products. Today, the Capper-Volstead Act is more important than ever as agricultural producers compete in an economy dominated by relatively few, large buyers," continued Peltier.

Peltier also objected to the fact that the Commission refused to let affected industries testify at its hearings, choosing instead to hear only from academics specializing in antitrust and government witnesses. "Apparently, the Commission didn't want to hear from a dairyman from Wisconsin or a peach grower in California, both of whom see the direct benefit of their cooperatives not only to producers, but to consumers as well," said Peltier.

In fact, effective limits to Capper-Volstead's antitrust immunity already exists in the Act itself: the Secretary of Agriculture has authority to prevent cooperatives from using their market power to unduly enhance the price of the products they market; the framework and operation of the Act places limits on cooperatives' growth; and cooperatives are also subject to inherent practical limitations relating to obtaining capital.

This past fall, the United States Senate expressed its strong support for farmer cooperatives, unanimously passing Senate Concurrent Resolution 119, recognizing the vital role that cooperatives play in boosting farm income, strengthening the balance of trade, and building vibrant rural communities.

"The U.S. and world economies have changed dramatically since the Capper-Volstead Act was enacted in 1922, and farmer cooperatives have changed with the world, so that they still fulfill the needs of their farmer-members," Peltier concluded. "The Commission's recommendations would destroy 85 years worth of hard work by America's farmers and ranchers to ensure a better life for their children and grandchildren."

NCFC is a national association representing America's farmer cooperatives. There are nearly 3,000 farmer cooperatives across the U.S. whose members include a majority of our nation's more than 2 million farmers, ranchers and growers. These farmer cooperative businesses handle, process, and market agricultural commodities and related products; furnish farm supplies; and provide credit and associated financial services. Earnings from these activities are returned to their members on a patronage basis. Farmer cooperatives also provide jobs for nearly 250,000 Americans, many in rural areas, with a combined payroll of over $8 billion.