When was it enacted? Who are Capper and Volstead?
The act was enacted in 1922. It was sponsored by Senator Arthur Capper and Representative Andrew Volstead. Senator Capper was a former two-term governor of Kansas, former President of the Kansas State Agricultural College Board of Regents, and media mogul. Representative Volstead spent twenty years in the U.S. House. He was a schoolteacher and lawyer and has been dubbed “the father of prohibition” for his role in advancing the temperance movement.
What is it?
The Capper-Volstead Act, 7 U.S.C. 291, provides limited antitrust immunity to qualified farmer cooperatives, allows for agricultural producers to join with other cooperatives to form a common market agency, and enables agricultural producers to join together to agree on prices for their products. Without the Capper-Volstead Act, such activities would violate the Sherman Act by eliminating competition. The Secretary of Agriculture has oversight authority over the implementation of the Capper-Volstead Act.
To qualify under the Capper-Volstead Act:
- Cooperative’s voting members must all be producers.
- Cooperative must choose to either operate under one member/one vote, or must limit distributions on dividends to eight percent.
- Cooperative must conduct more than half of its business with members.
Are there any restrictions?
- Agreements between cooperatives and non-cooperatives are subject to the antitrust laws.
- Antitrust protection does not apply if cooperatives combine or conspire with non-producers to monopolize or restrain trade.
- Monopolistic practices, engaged in outside the legitimate purposes of a cooperative, are not protected
What type of agricultural co-op producers rely on it?
- Feed Grains
- Oil Seeds
This article was written by attorney Kim Lowe.