The National Council of Farmer Cooperatives' co-op members will lose thousands in income if the Obama Justice Department succeeds in getting Congress to end a key antitrust exemption for co-ops.
NCFC has submitted formal comments to the Justice Department to claim that farmer co-op members, on average, earn $5,500 more than non-members in the same region through buying inputs and selling goods on a volume basis. But without a 1922 antitrust exemption under the Capper-Volstead Act, NCFC President and former USDA Deputy Secretary Chuck Conner says it wouldn't happen.
"Without Capper-Volstead many, if not most farmer co-ops would have effectively ceased to exist," Conner said. "They could not function without the ability to as a group make purchasing and price determinations without fear of antitrust actions."
Conner says the Obama Justice Department's effort led by Assistant Attorney General Christine Varney has gotten very serious with joint USDA competition workshops scheduled to start in March.
"As we understand the format of the events, they are going to be all day events at each location," Conner said. "The mornings are being set aside for speeches and presentations to look at competition issues in agriculture in general."
Conner expects other major farm groups to join NCFC in testifying against disbanding the co-op antitrust exemption. He argues it's just not necessary.
"This has worked very, very well for a long time," Conner said. "The system has checks and balances in it to prevent any kind of bad practices going on out there. Ultimately the Secretary of Agriculture has very broad authority here and it has not been a problem."
But Obama Antitrust Chief Varney testified before the Senate Judiciary Committee last year that co-ops with more agribusiness now may have grown beyond what was imagined when Capper-Volstead was written. Conner says ultimately it's up to lawmakers to change the act and in the current economic climate with margins so thin he hopes key legislators won't be inclined to do so.