Seven years
ago, potato growers across the United States tried voluntary supply management,
calling for a 10 per cent cut in planting in an effort to boost prices to at
least the cost of production.
Now a
federal judge has signed off on a $25 million settlement in a lawsuit between
wholesale grocers and potato farming associations accused of forming a
price-fixing cartel.
What a travesty!
Canada’s
marketing boards, which do not have supply-management powers, applauded the U.S.
acreage cuts and urged their members to join in.
Associated
Wholesale Grocers filed the class-action lawsuit in 2010, claiming farmers
managed to raise the cost of a 10-pound bag of potatoes fro m about $9 in 2007
to roughly $15 in 2008.
The
defendants — including United Potato Growers of America, whose members produce
about 75 per cent of the potatoes grown in the U.S. — denied the claims.
They said
they were simply running an effective co-operative, focused on helping their
members navigate the fluctuating potato market, and that their actions were
allowed under the 1922 federal Capper-Volstead Act. The law gives a limited
exemption from antitrust rules for agricultural co-operatives.
The
Kansas-based Associated Wholesale Growers, a co-operative of more than 2,600
retail stores in 30 states, contended the potato growing groups strictly
enforced their limitations using GPS, satellite imaging and even farmland
fly-overs.
