The Produce Cartels

Gabriella Beaumont-SmithIn July 2021, President Biden signed anexecutive order (EO) directing multiple federal agencies to take action to inject more competition into the marketplace. The EO expands regulations across multiple sectors, includingagriculture. Yet it mostlyignores how thegovernment ’s current actionsimpede competition across numerous agricultural industries, to American consumers ’ detriment.One such barrier is themarketing order—a domestic regulation that allows fruit, nut, and vegetable farmers to control how their product is sold in the United States. The current marketing order on South Texas onions is now under review, and thus provides a good example of just how this anticompetitive regulation works in practice.Under theAgricultural Marketing Agreement Act of 1937, the United States Department of Agriculture (USDA) may establish a  marketing order for a specific commodity and empower its domestic farmers and handlers to administer the order via a committee that sets the commodity’s requirements for sale on the U.S. fresh market. Committees that implement marketing orders are essentially government‐​empowered cartels that can collude to restrict supplies and thereby enjoy higher prices. While many marketing orders no longer explicitlyrestrict quantities, the requirements set forth in most orders implicitly do so because farmers cannot sell a  certain produce item in the United States if it fails to pass inspection and meet the relevant orde...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs