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Are you afraid of the potato cartel?

A giant grocery wholesaler is accusing a giant potato growers association of fixing prices.

Associated Wholesale Grocers is suing the United Potato Growers of America and other defendants for an alleged price-fixing scheme. It says the co-op models itself after OPEC and conspires to limit U.S. spud production in order to inflate prices. The grocers group alleges that the co-op monitors farmer fields with satellites and GPS to make sure they're not overplanting.

Growers' attorney Randon Wilson won't comment on the methods.

"I know of no grower who has complained about the mechanisms used," he says. "You have to get accurate data so that they can match supply to demand."

The 1922 Capper–Volstead law exempts farmers from certain anti-trust rules, but University of Wisconsin law professor Peter Carstensen says there are concerns that growers nationally are abusing the exemption.

"There are cases going on involving eggs, mushrooms and dairy cattle, all involving the scope of the right of farmers to restrict output," says Carstensen.

If spud growers lose this case, they will owe three times what they allegedly overcharged customers. Attorneys say the lawsuit has been consolidated into similar litigation already in U.S. district court in Idaho.

About the author

Sarah Gardner is a reporter on the Marketplace sustainability desk.

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