The Sapiro School of Cooperative Thought
Phil Kenkel
Bill Fitzwater Cooperative Chair
Currently there are several legal challenges relating to Capper Volstead protection of
cooperatives. They involve milk, potato, mushroom and egg cooperatives. In addition to being
the ingredients for an omelet, the common point of these cases involve the cooperative’s efforts
to control or manage supply. As the legal system ponders those cases it is interesting to recall
the historical debates about the purpose and role of cooperatives. Two great cooperative
scholars who were leaders in that debate were Aaron Sapiro, a California attorney and Edwin
Nourse an economist and first president of the Brookings Institute.
Sapiro believed that individual farmers could be efficient at production but “marketing can be
done sanely only on a collective basis and through organized effort”. Sapiro helped establish
several successful fruit marketing cooperatives in California. He advocated long, tight contracts
with growers to lock in supply and thereby gain market power. Some of the fruit marketing
cooperatives he established had contracts between the grower and cooperatives for as long as 15
years. He also suggested that marketing cooperatives could use long-term contracts with buyers,
which would reduce price volatility. The goal for cooperatives under the Sapiro his model was
to control marketing of a particular commodity, which includes centralized sales by the
cooperative and no independent sales by individual members.
Sapiro's advocacy met wider success among crops grown within limited territory than it did in
those grown over broad geographical areas. Nevertheless, he created a broad awareness in the
United States and Canada of producers’ ability to influence terms of trade through cooperative
organizations. His efforts in organizing farmers and developing thrusts in multiple commodity
sectors was a major influence in passage of the Capper-Volstead Act of 1922 and the
Cooperative Marketing Act of 1926.
Next week I’ll discuss Nourse and his competitive yardstick.