While public attention has focused on the congressional efforts to gut the Federal Trade Commission's controversial "kidvid" investigation, another amendment to the Federal Trade Commission authorization bill passed by the House could wipe out three commission probes of giant agricultural cooperatives.
The measure was adopted without public hearings and ultimately could raise consumer prices of such basic commodities as milk, critics of the large cooperative argue.
But few outside the industry fully understand the workings of these giant cooperatives. Thus, Reps. Mark Andrews (R-N.D.) and Charles Pashayan (R-Calif.), the leading proponents of the amendment, had little trouble convincing their House colleagues to gut, in effect, the pending cases when their amendment easily passed last November. The Senate never considered the amendment.
Although the cooperatives were granted partial antitrust immunity under the Capper-Volstead Act of 1922, the FTC, backed by many leading antitrust experts, believes that its limited authority over these co-ops extends to the enforcement of monopolistic practices.
"A few of these cooperatives have grown far beyond anything ever contemplated by Congress when it granted them limited antitrust imminity," 14 House members, including Rep. Peter Rodino (D-N.J.), chairman of the Judiciary Committee, wrote last year.
"Their memberships include large multinational agribusiness corporations, not just the small family farmers for whom this legislation was intended. A few of these large corporate co-ops have come to dominate the production and marketing of certain agricultural products," their letter continued.
Among those giant cooperatives are Sunkist Growers Inc., which according to an FTC suit controls as much as 75 percent of the production and marketing of western citrus fruit.A second is Ocean Spray Cranberries, Inc., which is under investigation by the FTC and is believed to have controlled as much as 90 percent of all cranberry production since 1962.
And the final target of potential FTC action is Dairymen Inc., a mammoth Louisville, Ky., dairy co-op which purchased Farmbest Foods Inc. in 1978 for $19.4 million. The two dairy concerns would have combined sales approaching $1 billion.
The staff of the FTC's Bureau of Competition has recommended that the commission sue Dairymen, the nation's third largest dairy cooperative, in an effort to gain divestiture of Farmbest, sourcesaid last week. Although the case has not yet gone to the commission itself for approval, investigators say the Dairymen acquisition could raise consumer milk prices and is particularly significant because Dairymen provides nearly half of the Southeast's raw milk.
The issue before the conference committee when it meets this week is whether the FTC should be stripped of the authority to chalenge these cooperatives. Some co-ops such as Sunkist have led the fight, arguing that Congress never specifically delegated responsibility to the FTC to regulate either the co-ops' practices or their marketing orders, but instead left the responsibility to the Agriculture Department.
"The attempted FTC usurption of authority in these two areas not only results in the harassment of farmers and cooperatives, but also is a waste of public funds," Sunkist Vice President William K. Quarles wrote in a letter to selected members of Congress last fall.
But on the other hand, the National Commission for the Review of Antitrust Laws and Procedures last year concluded that government trust-busters should monitor the growth of co-ops carefully.
"The antitrust treatment of cooperatives once formed, however, should be similar to that of or- dinary business corporations," the commission said in its final report. "Specifically, mergers, marketing agencies in common and similar agreements among competitors should be allowed only if no substantial lessening of competition results."