When Government Takes the Grapevine

Raisin growers have run afoul of one of those federal agencies you’ve never heard of.

Raisin growers Marvin and Laura Horne have run afoul of one of those federal agencies you’ve never heard of, but it could have far-ranging consequences. The Supreme Court will soon decide the reach of federal power over food growers.

Horne, a former tax auditor, retired to raise raisins in Kerman, California, a farming community just outside Fresno. He soon discovered that he’s required to hand over a large percentage of his raisins to the federal government — specifically, the Raisin Administrative Committee, a grandchild of the price stabilization programs adopted by FDR’s “brain trust.” The original intent was arguably noble — to stabilize farm prices for people struggling to keep their farms. But as with all socialist programs, noble beginnings lead to evil ends.

Thus in 1949 when the government stopped buying massive quantities of raisins for our overseas troops, raisin prices plummeted. To correct this imbalance in the economy, the Department of Agriculture promulgated Marketing Order 989 requiring serfs, er, farmers to fork over a significant portion of their crops to the Raisin Administrative Committee, the intent being to artificially raise raisin prices.

“An elected board of bureaucrats known as the Raisin Administrative Committee decide what the proper yield should be in any given year in order to meet a previously agreed-upon price,” writes Reason’s Zach Weissmueller. The committee then gives a percentage of each farmer’s crop to packers working for the committee. The raisins go into a holding vat and sit. They can’t be sold in the United States, but they can eventually be sold overseas or to school lunch programs.

Weissmueller says farmers theoretically “get a percentage of the money raised from the [confiscated] raisins, but as profit margins dwindled … so did the return to farmers. The tipping point [for Horne] came in 2003 when farmers received zero dollars in return for the 47 percent of the crop they had surrendered.”

Horne decided enough was enough. In 2002 he stopped giving up his grapes. The regulation specifies “raisin handlers,” and the Hornes consider themselves “raisin farmers” for whom the rule doesn’t apply. The government, however, sees otherwise. One of the most annoying aspects of this sorry story is that this law should have been sunsetted long ago. Instead it was actually renewed in 1989 with some legislators voting with greased hands.

Now the government is demanding the Hornes pay at least $650,000 (some sources say $1 million) in fines and surrender 1.2 million pounds of raisins, or about four years’ worth of harvest.

Outraged, Marvin decries the government’s thievery. “The hell with the whole mess,” he said, “It’s like being a serf.” Indeed it is. The Hornes and other growers tried to challenge the USDA’s seizure of their crops without payment as an unconstitutional taking in violation of the Fifth Amendment, but the USDA claimed the issue should be heard in the U.S. Court of Federal Claims.

Instead, the Hornes took the USDA to an administrative court, but they were shot down there. Next they took their case to a three-judge panel of the Ninth Circuit Court and lost again. Challenging that ruling, they asked for a hearing before the entire Ninth Circuit. After hearing the case, the court surprisingly declared it had no jurisdiction in the matter. But the Supreme Court disagreed and sent it back to the Ninth Circuit to decide on the merits.

This time the Ninth Circuit almost seemed to retaliate to being challenged. They found that, as The Wall Street Journal put it, “the Takings Clause was meant to address the seizure of land, not other personal private property. And even if the government did take raisin farmers’ property, the confiscation created raisin scarcity which raised raisin prices, so the Hornes were compensated for their property in that way.”

Even for the Ninth Circuit, this is a bizarre ruling. By its logic, any company could be ordered to hand over a percentage of its profits, or even its holdings. And there’s no end to this line of reasoning. No end, that is, except the crystal clear language of the Fifth Amendment: “No person shall … be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

In the case of the Raisin Administrative Committee, its actions are unconstitutional because Congress did not create it and endow it with the powers it wielded. Beyond that, government has no power to seize the raisins without due compensation.

The Court that wrongly decided Kelo v. New London could go some way toward correcting that blatantly improper eminent domain decision. Each day brings news of yet another attack on the Bill of Rights. Unfortunately, too few Americans understand what’s at stake in these cases. We’re thankful for Patriots like the Hornes who not only stood up to a bullying federal agency, but also had the strength of will and the stamina to get the case into the hands of the Supremes for the final decision. Let’s just hope the nine robed justices get it right.

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