Significance of the Cooperative Marketing Act's other key provisions
Randall E. Torgerson,
USDA Rural Business-Cooperative Service
It is natural that the
anniversary marking 75
years since passage of the
Cooperative Marketing
Act of 1926 should focus
on services that USDA provides to
associations of agricultural producers
authorized in the act. However, two
other provisions included in the Act
hold great importance for how cooperative
systems are structured to represent
the economic interests of farmers
and for how the agriculture secretary
can receive advice regarding cooperative
business activity.
Section 5 (7 U.S.C. § 455) of the Act says farmers, through their associations, “may acquire, exchange, interpret, and disseminate past, present, and prospective crop, market, statistical, economic and other similar information by direct exchange between such persons, and/or such associations or federations thereof, and/or by and through a common agent created or selected by them.”
This provides for more than farmers exchanging price information at a local cooperative meeting. It means farmers and their local, regional and national cooperatives can legally exchange a host of information within their marketing systems. This is a critically important strategic authorization that enables federated cooperative systems and marketing agencies-in-common to effectively function as coordinated entities.
It was recognized in the 1920s that to empower farmers to effectively represent farm interests, their local and regional cooperatives had to broaden their scope of activities through affiliation with other cooperatives. This helped farmers to develop critical mass and market presence in both purchasing and marketing activities. Only by this means could economies of size be realized to meet market demand and develop a degree of marketing power for farmers and ranchers.
This provision extends and expands cooperatives’ authority to act on behalf of members beyond the provisions of the Capper-Volstead Act of 1922. Capper- Volstead clearly permits use of federations and marketing agencies-incommon in its provisions which provide farmers a limited antitrust exemption when organized for jointmarketing purposes. To the extent that the 1926 act addressed the needs of farmers for exchanging information in coordinated marketing systems, it is viewed as their legal authorization for further exemption from the antitrust statutes. In short, it builds upon the landmark Capper-Volstead Act.
Section 4 (7 U.S.C. § 454) of the Act authorizes the secretary of agriculture to call advisors to counsel him or her on specific problems of cooperative marketing of farm products or any other cooperative activity. To carry out this advisory function, the Secretary may pay actual transportation expenses and a per diem to cover subsistence and other expenses associated with such travel. This provision enables the Secretary to draw on the full range of available expertise to solve producer problems through cooperative marketing activity.
