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The Capper-Volstead Act, passed in 1922, is the magna carta of agricultural cooperatives. The act has two sections. The first section generally defines what a Capper-Volstead cooperative is and the second section prohibits under price enhancement. Congress clearly intended that farmers be able to organize cooperatives and capture a share of market sufficient to raise price. However, Congress did not want to allow cooperatives with large market shares to unduly enhance the prices in the market channel. The basic question is what impact on price does a particular agricultural cooperative have? If in face an agricultural cooperative can raise farmgate prices, as indeed Congress hoped, is the resulting price elevation undue price enhancement?


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