Book Review

American agriculture presents some intriguing legal and economic historical puzzles. Afflicted with overproduction, dysfunctional marketing systems, naivete about the law as well as the economics of the business, and a Jeffersonian faith in the righteousness of their demands, America's farmers and their political leaders have struggled to find workable responses to the economic dilemmas of farming. Cooperation and producer cooperatives were repeatedly advanced as such solutions. The rhetoric of cooperation sometimes focused on the cooperative as a means of achieving more efficient market processes, but at other times the argument was for the right of farmers to monopolize through a "cooperative" cartel their control over a crop and so raise prices to consumers. The tension between market facilitation and monopoly exploitation emerged periodically as farmers sought special protections from antitrust law as well as statutory authorization for forms of cooperatives that would address the actual needs of improving market processes.	1
No cooperative better epitomizes this complex story than the Sun Maid Raisin organization in California. Blessed with a geographically confined area of production and a clear focus on the bottom line, the raisin growers of California nonetheless demonstrated many of the basic teachings of economic theory: higher prices produce new entry, expanded supply, and large-scale cheating by those who had agreed to withhold the product from the market. To achieve control, the organizers engaged in race baiting, night riding, economic coercion, and destruction of the fields of nonparticipants—all in the name of protecting and enhancing the interests of the farmers. Yet despite brief success in signing up the great majority of producers and raising prices, the results, as economic theory predicts, were expanded production by members and nonmembers, resulting in deep price decline and market chaos. Only when the state of California with the active support of the United States Department of Agriculture put its authority behind output control did the situation change. Government-created monopoly alone provided the essential barriers to entry necessary to overcome the forces of the market.	2
To chronicle this complex history, a scholar must be sophisticated in economics, law, and agricultural politics. Fortunately, Woeste brings a very good level of understanding of these diverse but essential topics to her history. For those more interested in either law or economics, her work provides the clear basic information about the complex interaction among perceptions and realities concerning both legal and economic questions. The book also repositions our understanding of the development of California's commercial agriculture and the major problems it confronted.	3
The book is divided into four parts. The first surveys the development of California's highly commercial agricultural markets based on the transformation of the land of the central valley from vast cattle and dryland operations to small, irrigated farms producing a wide range of fruits, nuts, and vegetables. The second part provides a review of the changing legal forms of cooperative organization with an emphasis on the differences, actual or perceived, between cooperatives and corporations as well as the recurrent problems of relating these efforts to state and federal law—both corporate and competitive. The third section focuses on the rise and fall of the raisin trust from 1912 to 1928. A classic story of improved market efficiency, including the creative use of brand promotion to expand and diversify the market for raisins, combined with the failure to control the market price because of the multiple defections resulting from the opportunity to cheat on the cartel price. The final section examines the broader context of agricultural product marketing strategies highlighting the tension between efficient market oriented structures and the pursuit of monopoly power over agricultural products. This section makes clear that only when government directly reinforces and empowers producer groups to control markets is this feasible in contexts where many producers can supply demand.	4
The complex interaction of legal and popular conceptions of institutional form provides a continuing backdrop to the efforts by raisin producers to resolve the problems of inefficient marketing and the lack of market power. While the legal concepts and their economic implications might have been more rigorously developed, Woeste's account nevertheless highlights the problem of finding a workable legal conception for cooperatives that had to make substantial investments in processing and marketing. The Rochdale model of buyer's cooperatives explicitly rejected the idea of capital investment and payment for capital. This model and the state statutes implementing it was maladapted to the problems of producer cooperatives. What is least clear is the extent to which contemporaries did not understand the need for capital investment together with compensation to those who invested. Certainly some of the quoted declarations have a remarkably ignorant quality, given modern economic understanding of the issues.	5
The producer cooperative movement advanced on two fronts. The first sought to address the inefficiency that resulted from poor integration and organization of the processing and distribution elements of marketing agricultural crops. Here Sun Maid made a major contribution by creating a differentiated product and selling the raisin as a food for use year round rather than just at Christmas. The differentiation ensured that a significant payback for the expanded pattern of use reverted to the producers supplying the differentiated brand.	6
Improved efficiency in the marketing process was only part of the story. Producers wanted higher prices. This required controlling production to reduce supplies. Here economic naivety is even more pronounced. The producers and their leaders never seem to have grasped the simple point that higher prices would call forth new production and defection from the cartel. Night riders representing not only producers but also bankers and other suppliers destroyed vines and threatened violence to nonsigners. The law, otherwise passive even with respect to physical harms, forced the voiding of some of these contracts. As a result, when Sun Maid withheld raisins, members and nonmembers alike sold to other processors to reap the bounty of higher prices. After struggling for several years to recover its market power, Sun Maid finally retreated into being a producer cooperative with about 35 percent of the market, leaving the rest to others. The marketing process was made efficient, but cooperative monopoly was impossible.	7
This is the old Whig view, Stubbs with a dash of Dickens, but updated through modern scholarship and interpretations and reinforced by arguments about the "deep structure" and "deep culture" of the common law, which (concludes Cantor) still functions well in the globalizing world at millennium's end. Perhaps. But (thinking of the readership of this journal) how much of this is penumbral, how much the opining and imagining of an author devoted more, these days, to popularization than to scholarship?	8
In sum, this book provides a comprehensive, historical case study of the complex problems—legal, economic, and social—that confronted and still confront American commercial agriculture.	9
Peter Carstensen University of Wisconsin, Madison

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