Harvesting Cooperatives and U.S. Antitrust Law Recent Developments and Implications

Political controversies associated with individual fishing quota (“IFQ”) programs have impaired IFQ implementation. As an alternative, U.S. fishermen have sought rationalization through private ordering. Their ability to do so is subject to U.S. antitrust law, under which agreements among competitors allocating resource outputs are typically considered “per se” violations. However, where (i) a discrete fishery quota is fully utilized, (ii) the participating producers can demonstrate that a joint harvesting arrangement will increase their production, and (iii) joint activity is limited to allocating harvesting rights among association members, private harvesting share arrangements have proven to be pro-competitive with respect to consumer interests. Consistent with this conclusion, associations of fishing companies allocating harvesting rights in the U.S. Pacific whiting and Bering Sea pollock fisheries among their members have received favorable antitrust law reviews from the U.S. Department of Justice. This paper summarizes the incentives and conditions for forming harvesting cooperatives, reviews relevant antitrust law developments, and briefly examines the fishery management and market implications of harvesting cooperatives as an alternative to IFQs.