Antitrust Status of
The Story of the Capper-
The Capper-Volstead Act provides a limited exemption from
antitrust liability for agricultural producers who market the products they
produce on a cooperative basis. Without Capper-Volstead, farmers who
agree amon g them selves on the pric es they 'll accept for their prod ucts
and other terms of trade would risk being held in violation of antitrust law.
Even with the exemption, agricultural producers are not f ree to un duly
enhance the prices they charge, consolidate with or collaborate in
anticompetitive conduct with nonproducers, or engage in conduct with no
legitimate business purpose that is intended to reduce competition.
Keywords: cooperative, antitrust, Capper-Volstead Act, law
Antitrust Status of Farmer Cooperatives:
The Story of the Capper-Volstead Act
Donald A. Frederick
Law, Policy & Governance
Rural Business-Cooperative Service
U.S. Departme nt of Agriculture
Cooperative Information Report 59
RBS publica tions an d inform ation are availab le on the In ternet.
The R BS w eb site is: http://www.rurdev.usda.gov/rbs
Antitrust law poses a special challenge to agricultural marketing
associations. Certain conduct by independent busines s people--
agreeing on prices, terms of sale, and whom to sell to--violates the
Sherman Act and other an titrust statute s. And these are the very types
of collaborative activities that agricultural producers conduct through
their marketing cooperatives.
Since 1922, the Capper-Volstead Act has provided a limited
antitrust exemption for agricultural marketing associations. Producers,
through qualifying associations, can agree on prices and other terms of
sale, select the extent of their joint marketing activity, agree on common
marketing practices with other cooperatives, and achieve su