Antitrust Policy

The agricultural sector in the United States is in a state of transition. During this period, thousand of small-scale farmers the family farmers and many more marginal operators find themselves in critical situations with respect to the ability to thrive or survive in American agriculture.

There does exist one type of organizational device, however, which affords some advantages to the smaller, independent family farmers over the corporate farms and the associations of larger farmers. This organizational device is the agricultural cooperative, which, through a combination of antitrust exemptions and federal income tax benefits, permits members farmers to compete on a more equal footing with larger agricultural organizations. This study examines the ways in which the antitrust exemptions may be used for the benefit of members of agricultural cooperatives.

Philosophical and Constitutional Issues

A trust, in its most simple form and in the context of economic control, is a combination of industrial or commercial enterprises in which control is exercised by a central authority. When this centralized authority has sufficient influence within an industry or a market to either control prices or to restrain trade (restrict competition), the trust concerned may be subject to antitrust action by the federal government in the United States.

In the United States, business combinations which have the effect of monopoly creation or restraint of tra

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on to buyers, when such buyers "knowingly induce or receive a discrimination in price which is prohibited" (Moore, 1976, p. 100). Specific exemptions have been granted to antitrust laws in the United States. These exemptions have been granted both through legislation and through rulings of the United States Supreme Court. The Clayton Act in 1936 exempted labor, agricultural, or horticultural organizations lawfully carrying out the legitimate objects thereof. Supreme Court rulings in the 1940s exempted labor unions from antitrust laws when engaged in strikes and boycotts, if they are not conspiring with employers. Legislation in the 1940s granted antitrust exemptions to publicly supervised rate setting agencies in insurance and transportation. These exemptions apply to the property-casualty insurance industry, which is also included in this study in its relationship to the agricultural cooperatives. Economic Issues The essential economic concepts involved in antitrust are monopoly, barriers to market entry, market concentration, and the exercise of monopoly power within a market (Armentano, 1982, pp. 5-13). Monopoly, of course, refers to single-firm control within an industry or market. Few, if any, true monopolies ex

Category: Government - A