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Historical Significance of the Farm Cooperatives
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Farm Cooperative Legislation

At the conclusion of World War I America's farmers were under considerable financial distress facing a decreased demand for their products while simultaneously at a severe disadvantage negotiating with large corporations to purchase their products. In many cases only a single powerful agribusiness buyer was available and would dictate prices to the producers who had no recourse but to accept the terms offered. Exasperating this exploitation were Antitrust laws which made it illegal for farmers to collectively market their products.

Farm organizations began to lobby for reform and managed to establish a farm bloc in Congress. The Clayton Act of 1914 was the first Federal attempt to provide farmers with legal rights to engage in joint activities. However, it was not until the enactment of the landmark Capper-Volstead Act (Further Reading) which was adopted by the United States Congress on February 18, 1922, that agricultural producers had full legal protection from prosecution to form voluntary cooperative associations to collectively market their goods.

This provided a means of organizing to negate the unfair advantages exerted by the large buyers. The legislation did not immunize farmers from abusing these new rights with predatory practices. The Secretary of Agriculture was given the authority to prevent these associations from engaging in monopolistic business practices by conducting fact finding hearings and issuing orders subject to review by federal district courts.

From their inception the Agriculture Cooperatives rapidly spread from county to county crisscrossing the United States. The rapidity by which they were founded demonstrated their incalculable value to the farmers of the time. Many of these organizations thrive, to present day, having continued to operate successful businesses by significantly reducing member costs while achieving fairer pricing for their production efforts. Many have chosen to affiliate with other co-ops, merging into very large entities, while others have remained small and independent. Regardless of size, the farm cooperatives continue to provide quality products and dependable services to the benefit of their communities and their farmer members.

 

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