Setting prices
It was disturbing to see Diane Green’s comment at the end of her letter stating that it is not appropriate to set prices between vendors and went on to insinuate that it was price fixing and illegal.
Why it’s not illegal to set prices: Agricultural products have a long history of low prices and poor return for the farmer. This is exactly why the United States Congress enacted the Capper-Volstead act in 1921. This act enables farmers to act together in marketing their products. That is why it could be legal to set prices or set minimum prices that products can be sold for at a farmers market. The act is written in a sort of vague way but the act is meant to help farmers get better prices for their products. There are a few guidelines that must be followed to keep it legal. Such as operating for the mutual benefit of members,not dealing in products of nonmembers in greater amounts than for members. Also each member gets only one vote and the association does not pay dividends on stock or membership greater than 8% per year.
To assure that antitrust laws aren’t broken the association is not allowed to engage in predatory practices, price discrimination, restrict members’ag output, coerce competitors or customers, collude with third parties to fix prices, conspire with third parties to fix prices, combine with other firms to substantially lesson competition, engage in boycotts or it may find itself subject to prosecution for being in violation of antitrust laws as would any other firm that engaged in such practices. The act also does not allow misuse of monopoly power.
More complete guidelines and the act itself can be found at www.rurdev.usda.gov; type in capper volstead in the search box.This act has been the basis for the formation of cooperatives though the word cooperative never appears in the act. Nor does it state that two producers must have any formal membership together. So you and your neighbor could set your prices together in a legal informal agreement.
When I attempted to raise prices of flower bouquets at our farmer market I went to each competitor and told them how much flowers sold for at our booth. I asked them to raise their prices $1.00. This was still cheaper than mine. It worked for a while, but in August when sales typically go down and inventory is high, things went back to the way they were. I figure my flowers are better, (conditioned, clean pails etc.), so they last longer. People get what they pay for and farmers will never agree on prices, Capper-Volstead or not.
Marcy Wentworth
Northern Lights Farm
Manawa, W