1 / 27

DOJ/USDA “Workshops”

DOJ/USDA Workshops on Competition in Agriculture Outcomes for Dairy Cooperatives Marlis Carson Senior Vice President and General Counsel National Council of Farmer Cooperatives. DOJ/USDA “Workshops”.

toni
Télécharger la présentation

DOJ/USDA “Workshops”

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. DOJ/USDA Workshops on Competition in AgricultureOutcomes for Dairy CooperativesMarlis CarsonSenior Vice President and General CounselNational Council of Farmer Cooperatives

  2. DOJ/USDA “Workshops” August 2009: DOJ/USDA announce workshops to explore competition issues in agriculture. March 12 Issues of Concern to Farmers - Ankeny, Iowa May 21 Poultry Industry - Normal, Alabama June 25 Dairy Industry - Madison, Wisconsin Aug. 27 Livestock Industry - Fort Collins, Colorado Dec. 8 Margins - Washington, D.C.

  3. Why Is the Administration Pursuing Competition/Antitrust Issues in Agriculture? • Consolidations in all sectors of agriculture. • Philosophy that all antitrust exemptions should be eliminated. Growing sentiment that big=bad. • Complaints that prior administration did not follow through on antitrust violations.

  4. Reasons for Concern • October 2008 • Then candidate Obama: • “We will have an Antitrust Division that is serious about pursuing cases.”

  5. Reasons for Concern • Assistant Attorney General Christine Varney (September 2009): Capper-Volstead “was intended to bring the small producers together in order to give them some ability to market their milk . . Some of these co-ops have grown extraordinarily beyond what anybody imagined when Capper-Volstead was enacted.”

  6. Reasons for Concern • Assistant AG Varney (September 2009): • Congress might conclude that the Capper-Volstead Act “is not the right law for the state of the industry at this time.” • Varney tells Senate Judiciary Committee Chairman Leahy she looks forward to working with Congress on the limits of Capper-Volstead.

  7. Reasons for Concern Assistant AG Varney: • DOJ is “reconsidering the validity of the current rationale” for antitrust exemptions. • Existing exemptions should be narrowly construed and DOJ is opposed to output restrictions. (DOJ has indicated it opposes any form of pre-harvest supply control. ) • At Senate Judiciary hearing Varney testifies DOJ “allergic” to exemptions.

  8. DOJ/USDA Workshops: NCFC Response • NCFC worked hard to educate Administration, Congress, Industry • Talks with DOJ officials • DOJ official attends NCFC 2010 annual conference • Briefings for House/Senate Agriculture Committee Staffs • Briefings for industry groups • Formal comments submitted to DOJ • NCFC members meeting with Congressional delegations and USDA officials • Public Relations Campaign

  9. Workshop #3: Dairy Industry • Cooperatives featured prominently • Secretary Vilsack: USDA “recognizes the important role of cooperatives in bringing fairness and balance to the marketplace.” • Assistant Attorney General Varney: “We understand co-ops are essential to the livelihood of producers.” Department of Justice “is supportive of the mission of cooperatives and the Capper-Volstead Act.” • Numerous producers spoke in support of cooperatives

  10. Our Work Is Not Finished • Negative DOJ comments prompted letter signed by 14 state attorneys general calling for review of the Capper-Volstead Act. • Many influential policymakers believe large co-ops can’t be farmer friendly. • Senator Schumer (D-NY) has noted a distinction between “smaller, farmerfriendly co-ops and larger ones that act like big private companies and don’t help our farmers.”

  11. Our Work Is Not Finished • Outcomes from DOJ/USDA? • No report to Congress • DOJ would rather bring cases than write a report. • Deputy Assistant Attorney General Pozen: Information learned from the workshops affects “everything we do every day.” • Cases will be “infused” with what was learned through the workshops • DOJ/USDA formed close working relationship.

  12. Our Work Is Not Finished • Stage is set for Farm Bill mischief. • “Small producer/small farmer” references could lead to misguided policies. • Future co-op consolidation and integration could quickly put us back in the DOJ crosshairs. • Let your members of Congress know that you support your dairy cooperative.

  13. Our Work Is Not Finished Senate Judiciary Committee Chairman Herb Kohl: The committee “will continue to examine competition in agricultural markets . . . Issues to be examined include consolidation in agricultural sector, dairy market concentration, and competition in the market for genetically modified seeds.”

  14. Dairy Policy & Directors’Leadership Conference

  15. Agricultural Antitrust Issues Peter S. Janzen Senior Vice President and General Counsel Land O’Lakes, Inc. April 5, 2011

  16. Agricultural Antitrust Issues • Increased DOJ focus • Increased Private Party Litigation • Mushrooms • Eggs • Potatoes • Litigation has targeted businesses that are using Capper-Volstead as an exemption from antitrust laws and that involve some form of supply management.

  17. Mushrooms Antitrust Litigation • DOJ investigation resulted in a consent decree prohibiting certain forms of “supply management”. • Private party litigation followed the government action and focused on the Capper-Volstead status of the cooperative. • Court determined that the existence of a single non-producer member of the cooperative eliminated the Capper-Volstead protection.

  18. Eggs Antitrust Litigation • Allegations that the cooperative formed by members of the egg industry does not meet the requirements of Capper-Volstead – so no antitrust exemption. • Allegations that the “supply management” programs engaged in by the egg industry are not exempt from antitrust liability even if Capper-Volstead protection is available.

  19. Potatoes Antitrust Litigation • Allegations that the “supply management” program engaged in by the cooperative formed by members of the potato industry is not exempt from antitrust liability even if Capper-Volstead protection is available.

  20. Questions that Arise from Litigation • What is a producer? • Is an integrated entity still a producer? • What steps should a cooperative take to ensure that its members are producers? • Can a cooperative lawfully limit its members’ output?

  21. What is a Producer? • Persons engaged in the production of agricultural products as farmers, planters, ranchmen, dairymen or nut or fruit growers. • Till the soil or raise the animal.

  22. Is an Integrated Producer a Producer? • If a person or entity engages only in processing activities, would not meet Capper-Volstead definition of a producer. • Producer, but vertically integrated as a producer. • Vertically integrated and purchase significant quantity of products from third parties.

  23. Steps a Cooperative Should Take • Annual certification from each member. • Including any entity utilizing Capper-Volstead protection (trade association, bargaining association, marketing agency. • Federated cooperative – certification of a members’ members. • Who actually owns agricultural production assets. • Bylaw – automatic termination without notice, of membership if not a producer. • Do not identify anyone as a member (associate member, member or the like) if not a producer.

  24. Supply Management • Producers and Capper-Volstead cooperatives may act together to collectively process, prepare for market, handle and market agricultural products of its members. • Act as a single entity • Pricing not expressly allowed as a collective activity.

  25. Questions?

More Related