Current Weather
The Spy FM

Dirty Spuds? Alleged Potato Cartel Accused Of Price Fixing

Filed by KOSU News in Business.
June 17, 2013

High-tech spying with satellites. Intimidation. Price fixing.

Sound like the makings of a Hollywood thriller? These are actually among the allegations being thrown about in a federal court case against America’s alleged “Potato Cartel.” It’s enough to make Mr. Potato Head blush.

A civil lawsuit that shifted into U.S. district court in Idaho – America’s potato country — last week alleges that the United Potato Growers of America has become a veritable OPEC of Spuds. The group’s members, who produce about 75 percent of the potatoes grown in this country, are accused of illegally conspiring to inflate ‘tater prices.

The allegations – which the potato growers deny — are being lobbed by the Associated Wholesale Grocers, which represents more than 1,900 retailers, according to its website. The grocers group is based in Kansas, where the suit was originally filed this spring.

In its lawsuit, the grocers accuse Big Potato of enforcing its pricing schemes through a variety of strong-arm, high-tech means, including using GPS systems and satellite imagery of farmland to make sure farmers aren’t planting more spuds than they’re supposed to. They were “using Spudnik, if you will, from the sky,” AP reporter John Miller, who recently wrote about the case, joked with Robert Siegel on All Things Considered. Growers who violated the production limits, the suit alleges, were fined $100 per acre.

At issue is whether the potato growers were engaging in predatory conduct or merely running a smart cooperative that helped its members avoid the cycle of boom and bust in the potato biz. According to its website, United Potato Growers of America formed in 2005, following the creation a year earlier of an Idaho cooperative with a mission to “manage their potato supply, matching it to demand to help their growers receive a reasonable price for their product.”

Mission accomplished, it would seem: In 2004, AP’s Miller says, a 10-pound bag of potatoes sold for about $8 or $9; by 2006, that price had shot up to $15 or so.

Now, under a 1922 law known as the Capper-Volstead Act, agricultural producers are allowed to band together to more efficiently market their products. And the potato folks clearly think they’re on the right side of the law.

In a statement, UPGA told NPR: “United Potato Grower’s goal has been to help growers provide quality potatoes at reasonable prices to American consumers. We have always acted openly and within the bounds of the law. We are confident in our legal position and look forward to a favorable outcome in court.”

But in recent years, the Justice Department has been scrutinizing just how far such antitrust exemptions should apply to large modern agricultural operations.

And the current lawsuit is quite similar to another lawsuit filed against the potato co-op back in 2010. The judge in that case, Miller says, rejected a motion to throw the case out of court. Instead, the judge says it remains an open question just how far growers can stretch Capper-Volstead’s antitrust protections. [Copyright 2013 NPR]

Leave a Reply

5AM to 9AM Morning Edition

Morning Edition

For more than two decades, NPR's Morning Edition has prepared listeners for the day ahead with two hours of up-to-the-minute news, background analysis, commentary, and coverage of arts and sports.

Listen Live Now!

9AM to 10AM The Takeaway

The Takeaway

A fresh alternative in morning news, "The Takeaway" provides a breadth and depth of world, national and regional news coverage that is unprecedented in public media.

View the program guide!

10AM to 11PM On Point

On Point

On Point unites distinct and provocative voices with passionate discussion as it confronts the stories that are at the center of what is important in the world today. Leaving no perspective unchallenged, On Point digs past the surface and into the core of a subject, exposing each of its real world implications.

View the program guide!

Upcoming Events in your area (Submit your event today!)

Streaming audio and podcasts

Stream KOSU on your smartphone

Phone Streaming

SmartPhone listening options on this page are intended for many iPhones, Blackberries, etc. with low-cost software applications available to listen to our full-time web streams, both News on KOSU-1 and Classical on KOSU-2.

Learn more about our complete range of streaming services

We're perfecting the patient experience - Stillwater Medical Center