Potato cartel caused Americans to pay nearly 50% more for potatoes

U.S. potato-grower cooperatives in the early 2000s deployed drones and scanned satellite images as they colluded to reduce the amount of potatoes grown across the country in an effort to increase their profits, according to a report by California State University, Northridge business law professor Melanie Stallings Williams.

The cooperatives’ plot meant Americans paid more for their french fries, while cooks of every stripe — from those at home to those in high-end restaurants and even manufacturers — paid up to 49 percent more for a staple of the American diet.

“If you had a potato in the last decade or so, then you paid significantly more because of widespread collusion in the potato industry,” Williams said. “Every time you went to McDonald’s, every time you had something that had potato starch added to it, you paid more.”

In a report, Williams and her colleagues concluded, the production caps “significantly increased the cost to buyers, with an average nationwide overcharge of 30 percent for fresh potatoes and 48.7 percent for Russet potatoes at the point of shipping, and 24.4 percent for fresh potatoes and 36.5 percent for Russet potatoes at the wholesale level. The social welfare costs are thus substantial.

“Potatoes are the leading vegetable crop in the United States,” Williams said, “and are a staple in every household in America. Even those who don’t eat potatoes on a regular basis may be surprised to learn how often potato starch is used in everyday items that we consume, as a supplement or a filler. That means every one of us was impacted.”

Read more at csunshinetoday.csun.edu