June 14, 2013

Grocers allege U.S. farmers pumping up potato prices

A wholesale grocer says America's potato farmers are running an illegal price-fixing scheme akin to the petroleum-producing OPEC cartel.

The Associated Press

(Continued from page 1)

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A wholesaler charges that U.S. potato farmers boost prices.

2008 Press Herald File Photo / John Ewing

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Potatoes are harvested at farm west of Idaho Falls , Idaho, in this September 2010 file photo. A U.S. wholesale grocer says America's potato farmers are running an illegal price-fixing scheme, driving up spud prices while spying on farmers with satellites to enforce strict limits on how many tubers they can grow. (AP Photo/Post Register, Robert Bower)

Stueve didn't return phone calls, but his basic contention – that Capper-Volstead is being abused to illegally inflate potato prices – has emerged in numerous, commodity-related lawsuits in the last decade, said Peter Carstensen, a University of Wisconsin Law School professor in Madison who focuses on antitrust cases.

"It's because there's an increasing perception that Capper-Volstead is being abused," he said.
For instance, a similar lawsuit filed in 2010 targeting potato growers is now advancing through federal court in Idaho, a case that may eventually be combined with this one.

Meanwhile, other groups including the U.S. Department of Justice have lodged antitrust complaints against mushroom growers, dairy farmers, egg producers and cranberries. Carstensen said a common gulf separates rival protagonists.

Large agricultural producers argue they're using the power of the cooperative to create a more efficient market, he said, while "the other side is saying 'No ... what you're doing is outside the scope of authorized conduct.' "

Federal prosecutors aren't involved in this latest litigation, but the DOJ has pushed recently to re-examine how large, modern agricultural cooperatives are using the Capper-Volstead Act, including holding workshops with the U.S. Department of Agriculture to scrutinize competition in the farming business.
 

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