Co-ops have used lax antitrust enforcement to go from democratic to exploitative

WASHINGTON – Today, Open Markets Institute released a new report revealing how many farmer co-ops have subverted anti-monopoly measures and grown into monopolies that prey upon their members. The report, called “Redeeming the Democratic Promise of Agricultural Cooperatives,” proposes a set of reforms and increased antitrust enforcement that could rebalance agricultural markets to serve the public interest again.

“The current pandemic has proven how pro-corporate policies have turned our food supply chain into a fragile system, unprotected against monopolistic corporations,” said Claire Kelloway, reporter and senior researcher with the Open Markets Institute. “These trends strained the food system long before the pandemic. As we grapple with how to reshape our agriculture system so that it works for all people, our elected officials must ensure that co-ops become democratic again.”

In an op-ed about the report in the Washington Monthly, Kelloway details the importance of cooperatives, in their authentic form, to counterbalance monopoly power. Growing numbers of independent producers, contract workers, independent business owners, Uber drivers, and third-party vendors on Amazon, need the ability to cooperate with one another, as the markets they buy from and sell to become increasingly monopolized.

If combined with public support, the following reforms would restore cooperatives to the healthy, democratic entities they were intended to be:


• Requiring greater transparency and reporting in cooperative management;

• Mandating one-member, one-vote systems in cooperatives’ elections;

• Revoke the antitrust protections and tax benefits of cooperatives that do not benefit their members;

• Promoting federated cooperative structures;

• Ensuring cooperative decision-making processes have no biases against smaller members;

• Increasing public investment in research, technical support, and financing for cooperatives;

• Limiting horizontal mergers between cooperatives, if the mergers would create harmful levels of power among either buyers or sellers;

• Limiting vertical integration in large cooperatives that have monopsony pricing power over farmers; and

• Ensuring that mergers, joint ventures, and partnerships between cooperatives and investor-owned corporations are demonstrably in the interest of co-op members.


“Without a comprehensive combination of stronger antitrust enforcement and vital reforms, farmer co-ops will be free to continue this charade as tools for democratization,” continued Kelloway. “Instead, co-ops are dominating regional markets and squeezing out the very farmers that make up their memberships.”

While the report focuses on agricultural marketing cooperatives, the analysis is applicable to any monopolized industry.

Read the full report here.

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