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An Economic Analysis of Policies Protecting Small Business in the Milk Industry*

Published online by Cambridge University Press:  28 April 2015

H. M. Harris Jr. ,
R. D. Knutson  and
C. E. French
H. M. Harris Jr.
Affiliation:
Virginia Polytechnic Instituteand State University
R. D. Knutson
Affiliation:
Department of Agricultural Economics at Purdue University
C. E. French
Affiliation:
Department of Agricultural Economics at Purdue University
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Extract

Regulatory activity to maintain the status of the independent milk company as a viable competitive force in the milk industry has been a central focus of regulatory policy since the 1930's. Some authorities question the degree of emphasis on preservation under the law, but most feel that there is an important element of protection embodied in regulatory activity affecting the industry. We feel that this aspect of the law is important and is the focus of this article.

Legal protection of the independent dairy is afforded from three sources. The Robinson-Patman Act, which prohibits firms from discriminating in price where the effect may be to substantially lessen competition, has been enforced extensively by the Federal Trade Commission (FTC) on behalf of independent milk companies. For example, of 53 complaints filed by the FTC from June 1950 to June 1964, nine were against dairy companies. Independent firms have protected their own position under the law in treble damage private litigation. As a group, the national and regional dairy concerns have been involved in almost continuous treble damage litigation on charges of discriminatory pricing in recent years.

Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 5 , Issue 2 , December 1973 , pp. 23 - 30
Copyright
Copyright © Southern Agricultural Economics Association 1973

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Footnotes

*

Purdue Agricultural Experiment Station Journal Article Number 5228

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